How do investors and traders cope with a market that has fallen more than 40% in just one year and survive until greener pastures return? Many traders have lived to tell the tale by trading both the long and short sides, or by taking a longer-term inverse (contra) Exchange-Traded Funds (ETFs) as a portfolio hedge. And it's the contras that have insulated them against the big slides…
When we decide to pursue trading as a career, the first thing we do is seek out as much market information as possible. We search the wellspring of the web, we read books, and attend seminars. Then, we read some more books and attend more seminars until we acquire so much market information that our problem now becomes information overload.
As much as I'm tired of using and hearing the word, it's true that the market volatility in the past couple of months has been, well, unprecedented. If there was ever a time to be cautious with your trading strategies, I believe this is it. While there are certainly opportunities in the marketplace that haven't been available in years, the risks are commensurately higher as well…
As much as I'm tired of using and hearing the word, it's true that the market volatility in the past couple of months has been, well, unprecedented. If there was ever a time to be cautious with your trading strategies, I believe this is it. While there are certainly opportunities in the marketplace that haven't been available in years, the risks are commensurately higher as well…
Exploring the relationship between the CBOE Volatility Index (VIX), CBOE Russell 2000 Volatility Index (RVX) and CBOE Nasdaq Volatility index (VXN).
It's important to be mindful when it comes to how much leverage you can wield by implementing a single options trade, because a small investment can go a long way…
While it's true that there are a lot of special clauses when it comes to trading options, the profits outweigh any of the provocations. High among traders' complaints, though, are the ticker changes for Long-Term Equity Anticipation Securities, or LEAPS…
The fundamentals tell me the banks are going to take a big hit, but when? Let's go back to the put and call premiums. Many in the market are betting that the banks will have horrific earnings — the big ones report in mid-January — and their stocks will fall. Many also think this is already built in…
I've probably mentioned the term volatility in every article I've written about options trading. Everyone probably has an intuitive feel as to what volatility means. But how do we define volatility and how do we measure it?
Are you keeping tabs on the S&P 500 ? who isn't nowadays? ? or wondering how you could trade the elevated levels of the Volatility Index (VIX), the so-called "fear index"? If so, you may want to look into binary or fixed return options (FROs) based on either of these two indices…
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?
Although much has been written about the CDS market there are some very simple ways investors can use price information from that market, but it's important to note that CDS levels and equity prices move in opposite directions (what's known as ceteris paribus)…