Just as options are derivatives of their underlying stocks, credit-default swaps also fall under the "derivatives" umbrella. Just like you can use put options to "insure" your portfolio, investors use the CDS market to spend a small amount of money for the possibility of making a large amount of cash if a company performed poorly.
Diversification, important in all investments, is critical when it comes to trading options. Especially for novice option traders, because some of your positions will be losers, the more positions you have means increased odds of hitting a home run. But with only a few positions, you could easily wipe out your portfolio very quickly…
Options have been, and should soon be again, excellent predictors of intermediate-term trends. On a stock-by-stock level, they track many of the most sophisticated, leveraged market participants. On a broader market level, they capture current market sentiment in real-time. With the intermediate market trend identified, we take the extra step of finding the most lucrative, low-risk option plays available…
Today we're going to examine some characteristics of a very popular option trading strategy known as a straddle. We're also going to determine the perfect time to reach into your bag of tricks and pull out this killer strategy…
You've probably been advised to "buy low and sell high" so many times that your eyes automatically roll when you hear the phrase. Let's face it, who doesn't want to buy stocks or options "on the cheap" and close the positions for double or triple their original value? But what a lot of folks outside the options world don't realize are the, well, "options" behind "selling high." And there, friends, is where you have a unique advantage over thousands, if not millions, of investors who are neither talking the talk, nor walking the walk…
In this episode of Trader Interviews, host Tim Bourquin profiles www.TheOptionsInsider.com founder Mark Longo. Tim and Mark discuss the VIX, the election's impact on the financial market, options strategies for a volatile environment, floor trading vs. screen trading, options products for retail investors and much more…
Answers to frequently asked options questions including: how do you trade options profitably in this high volatility environment, why are Iron Condors failing in this market, how does the VIX correlate to the broad market and why does volatility skew reduce profits in upside call positions?
Exploring the growing controversy over possible manipulation in the CBOE VIX.
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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.
The Options News Network's Options Cocktail program recently featured Options Insider founder Mark Longo as a special guest…
Everyone seems to think that this level of VIX is the highest ever. But that's simply not the case…