The Risk of Not Taking Risk

Spending a great portion of my life as an independent options trader and firm risk manager, I was always focusing on how to avoid getting hit with a "stray bullet" or some unforeseen world event that was going to take my portfolio down quicker that than a concrete sailboat. For years I spent countless hours creating hedging scenarios that no matter what happened I couldn't lose money. Sadly, these complicated strategies often prevented me from making money as well. So the key is to take smart risk. Risk you understand…

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It's Time to Put the Offensive Team Back on the Field

Our stock market indicators have turned positive this week, signally us to the fact that there are more buyers than sellers in this market place. How long our defensive team (buy stocks and ETFs) will stay on the field is anybody's guess. But until the defensive coach (move to cash via money market) tells us to protect our portfolios, we are going to try and gain a few yards; (make money). Until we lose possession of the ball ( stock indicators turn negative) we can safely initiate covered calls in our portfolios…

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Looking Back At Quadruple Witching

Quadruple Witching occurs when stock options, index options, index futures, and single stock futures all expire on the same day. These weeks can often bring with it a lot of volatility — not that we haven't already seen a lot of volatility in the markets recently! For 2008 and so far in 2009, volatility has come to be seen as a four letter word to many, and this, I presume, is a word that many investors just don't want to hear anymore…

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