Using open interest put/call ratios to track options volatility…

Analyzing the factors that determine put/call ratios along with the three major drawbacks of relying on put/call ratios to track options volatility.

Many option traders believe that the CBOE Volatility Index (VIX) can help predict bullish or bearish market sentiment. However, in recent years the VIX has arguably become less effective. Put/call ratios, another market-sentiment statistic, may be a potential alternative. We'll discuss the pros and cons of each of these ways to track volatility.

With the current ban on short selling in financial stocks, many options traders may want to consider hedging with single stock futures instead of traditional equities.

There have been calls for a volatility ETF based on the popular CBOE VIX. However, there are serious questions about how such a product would work and whether it is even a good idea in the first place…

While VIX options are an exciting new product, it is important to realize just how different VIX options are from other options. What we are talking about is an option on implied volatility, and not on a stock, ETF or index. Unless you are a brilliant mathematician, it kind of gives you a headache just thinking about it…

Strategies for trading options on expiration day….

Expiration is the time of the month when market makers make some "bonus" money. This bonus comes from public traders who do not know how to properly exit their positions and leave nickels, dimes or more for the market makers. I'm going to tell you how to avoid this little trap…

How to use covered puts to manage your option risk along with a few notes of warning about options & risk…

Risk management is key to a trader's survival. It has often been said that those who survive are not the ones who make the most, but the ones who lose the least. Even the best traders make bad trades, and minimizing losses is one of the most important things you can do to help ensure that you'll survive to trade another day. In volatile markets, this is more important than ever. That's why I'd like to focus on a couple of ways you may be able to use options to reduce or limit your risk…

Analyzing the breakeven points of backspreads…

Options Alert for the CBOE Crude Oil Volatility Index (OVX)