On its 40th anniversary last Friday the listed options industry and the Options Clearing Corporation marked the occasion at the Options Industry Conference in Las Vegas by highlighting the first day volume on April 26, 1973 totaled 911 contracts. Compare that to last Friday’s volume of 15,181,128 contacts, forty years later.
Trade selection using volatility as the primary criteria. Different trades for different volatility opportunities.
Trade selection using volatility as the primary criteria. Different trades for different volatility opportunities.
Like the Aesop’s fable, those who have been calling for a correction these last few weeks have lost credibility as the market continued marching higher although most everybody knows a correction will come eventually.
Volatility Kings? is our list of companies having a tendency to experience increasing options implied volatility as their quarterly reporting dates approach. The increasing implied volatility reflects uncertainty or the width of the possible stock price distribution on the report date.
Trade selection using volatility as the primary criteria. Different trades for different volatility opportunities.
We begin by updating our indicators while checking on the progress of the equity uptrend.
Trade selection using volatility as the primary criteria. Different trades for different volatility opportunities.
Since the current S&P 500 Index (SPX), uptrend appears stalled or perhaps in the process of forming another symmetrical triangle continuation pattern, the options implied volatility has started increasing although from a low level. If the uptrend resumes we can expect to see lower implied volatility once again, in the meanwhile perhaps we should consider some ideas in the event implied volatility continues increasing.
Trade selection using volatility as the primary criteria. Different trades for different volatility opportunities.
As the equity markets opened last week, the direction outlook was uncertain as they were poised to go in either direction.
Last weeks’ media chatter about sequestration and the anticipated effects of reduced spending seemed to be overlooking the dollar as it increased against the currencies that make up the US Dollar Index, especially Friday, the first day of implementation. If exchange rates move primarily in response to news that alters expectations about the future economic environment, as theory proposes, then less government spending is good for the economy.