Part one in a series looking at two of the fundamental Greeks in options trading.
Delta and Gamma: How Options Move with Stock
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Put Condor, With A Twist
An extensive analysis of a big trade in Goldman Sachs puts across several strikes in July expiration.
Ponzi, Usury, Put-Call Parity & The Black Swan
Ponzi and usury could be the names for twin poster boys of this era of Wall Street expansion and collapse….
Voodoo Averages In FX
I've often heard some investor-traders refer to technical analysis as "voodoo." Granted, there's a lot of so-called "indicators" out there that are more than a little mysterious and subjective, from Gann lines to planetary alignments. And some of their proponents are in their own galaxies as well. Now, even many of my option trader buddies who do volatility arbitrage are TA cynics. But, what I have to remind them of is that looking at volatility charts is a form of "technical analysis" just like looking at moving averages of price. They are both based on historical statistics, plotted on a graph in a given time frame. They hate when I tell them that, because they think that statistical vol arb is somehow more pure than "voodoo" statistical price analysis.
FED "All-In" Bomb Blows Up Dollar
The FED lowering it's effective Fed Funds target rate to between 25 bp and zero, and it's sweeping new debt purchase program, sent the euro up by 3-cents in 90 minutes, from roughly $1.38 to over $1.41. In this article we'll look at the EUR/USD pair as well as how to convert forex volatility for your trading range…
VIX Questions
I've had two great questions about the VIX from our viewers recently. What is the "Rule of 16" and how does a small increase in price impact the implied volatility of a far OTM option?
The Growing Controversy Over The VIX
Exploring the growing controversy over possible manipulation in the CBOE VIX.
vix controversy part two
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Is The VIX For Real?
There's been lots of talk about the CBOE Volatility Index (VIX) recently, and not just because it's stuck in the stratosphere. Some traders have raised controversy about whether it is an accurate reflection of volatility in the market place, especially after the October VIX futures expiration. They were upset about the disconnect between the VIX futures, which closed around 53, and the VIX calculation itself the next day. The futures were subject to a final settlement with that calculation and it came in at around 64. "Ouch!" if you were short. But, it's highly likely that those traders don't understand the VIX.
Killed By The Huntsman (NYSE: HUN)? Not These Options Traders!
Shares of Huntsman Corp. (HUN) fell over 40% on Wednesday as markets digested the news that buyout firm Apollo Management (and one of its businesses, Hexion Specialty Chemicals Inc.) announced that they were suing to back out of an agreement to acquire the chemical maker for $6.5 billion. Well, some astute options traders were all over this play even before the news hit the wires. Significant options activity was seen in several at-the-money and near-the-money strikes…