Markets often exhibit tendencies that, for the astute trader, may translate into profits. One such tendency is what I refer to as the ?rubber band effect.?
How Far Is Too Far?
read more
More Greeks
Each one of the Greeks tells us how much an option price should change when a specific thing happens.
Pick a Number, Any Number
The opportunities which we look for to buy and sell currencies and other assets are simply highlighted by price and price alone. Any other tool which a trader uses to identify a speculative opportunity, such as a technical indicator or a traditional price pattern, is nothing more than an ?after the event? signal.
Pre and Post
For those of you who may not be aware, there is trading that occurs before the 9:30am official market open and also well after the 4:00pm close. I want to caution you, this is not an invitation for you to trade during this time.
Time Decay and Weeklys
One of the effects of the seasonality of options (that I talk a lot about with my options coaching students) is that premium sellers see the most dramatic erosion of the time value of options they have sold during the last week of the options cycle
Volatility Trading Digest – Strategy Selection
Trade selection using volatility as the primary criteria. Different trades for different volatility opportunities.
Volatility Trading Digest – Now More Bullish
Despite all the “fiscal cliff” chatter the equity advance continued last week as other select “risk on” assets began participating. Although the probability remains high there will be a successful retest of the S&P 500 Index (SPX) low of 1343.35 made on November16 at some point, we know better than to fight the tape.
Option Block 202: VIX: How Low Can It Go?
Can VIX really go to 10? Can we stop saying “fiscal cliff”? Can we all play MSFT CEO for a day?
Rising correlation and stock volatility
In 2011 and early 2012, one of the big themes was the elevated correlation among individual stocks. In the ?risk on, risk off? environment, investor appetites for stocks were indifferent to the fundamentals of particular companies: trades were all about the macroeconomic risks.
The Road Goes on Forever
One of the effects of the seasonality of options is that premium sellers see the most dramatic erosion of the time value of options they have sold during the last week of the options cycle.
Is Long Term Risk Coming In?
This morning we had another continuation of the Cliff Dwellers saga. This is where the market participants watch and see what the Executive Branch and Congress are going to say and then hit the sell button.
It?s All In the Charts, If You Know What You?re Looking For
What I always find fascinating are all of the different ways people look at charts and all of the different pieces of information people try to attain from a price chart. With so many different schools of thought on money, markets, charts, and so on, what should we really be looking for in a price chart?