The Options Insider - Your Inside Source for Options Information

Welcome, Guest (Sign in here)

Education

  • The US Dollar Index

    Posted on 7/1/2009 in Education by Steve Misic
    When I write my articles, I give my opinion about what I believe is happening to the currencies of the world based on the news I hear, the experts I follow, and my personal experiences of the economic cycles I have seen in the past. This fundamental information helps me understand what reports and indicators the economists of the world believe will shape future events. The charts provide me with the clues as to where the buyers and sellers are waiting to act in the future based on their actions in the past. The US Dollar Index (USDX) is the main currency chart I watch for clues as to the sentiment of the currency traders of the world, and for the places where battles have taken place in the past that may once again shape the future...
  • Understanding Trending and Range Bound Markets

    Posted on 6/17/2009 in Education by Steve Misic
    The only way to keep yourself out of trouble in the Forex market, and also profit from various market periods, is to know what trend the market is in and, most importantly, know what the next trend is going to be...
  • Currency Cycles — Balancing Risk and Reward

    Posted on 6/16/2009 in Education by Steve Meizinger
    As we move through 2009, what can investors expect? How much uncertainty? When will the markets finally "shift" direction? Only time will tell. No market guru can predict with 100% certainty how the markets are going to perform over the next year. FX Options are available each trading day for retail investors, institutions and market makers. As an investor, it’s important to carefully monitor the risk and reward relationship on a daily basis to ind the appropriate trades for your portfolios.
  • Currency Cycles — Balancing Risk and Reward

    Posted on 6/15/2009 in Education by Steve Meizinger
    The financial markets are constantly looking ahead for information to price themselves. With the recent dramatic upheavals in the fnancial markets, hope has been replaced by despair. The markets generally experience four price stages in their own "life cycle": consolidation, breakout, equilibrium, and the reversal of the previous breakout. The challenge for investors is not only qualifying which stage the market is in, but also the various sub-stages it encounters...
  • Spreads with Directional Bias

    Posted on 6/12/2009 in Education by Josip Causic
    In this article I argue that naked put selling, when the volatility is at extreme levels, would provide the seller with a "juicy" premium. At the same time the exposure would be technically unlimited (though the price could only go down to zero) while the reward would be limited to the premium received. Nonetheless, the safer way of trading would be by using spread trading or the simultaneous selling and buying of option premium.
  • R.I.P. Forex Hedging

    Posted on 5/8/2009 in Education by Edward Ponsi
    New rules are about to go into effect in the Forex market. How will these changes affect you?
  • Bull Put, Wright Or Wrong? - Part Two

    Posted on 5/6/2009 in Education by Josip Causic
    Continuing our analysis of a reader's Bull Put trade. What went right and what went wrong? Read on to find out...
  • Bull Put, Wright Or Wrong? - Part One

    Posted on 5/5/2009 in Education by Josip Causic
    Examining what went wright, and what went wrong, in a reader's bull put trade.
  • Plan Your Exit(s) Beforehand

    Posted on 4/29/2009 in Education by Josip Causic
    This article is named Plan the Exit(s) Beforehand for the simple reason that there should always be more than one possible exit strategy for every single option trade that we make. Since the stock market on any given day could move in three possible directions (up, down, or sideways), we must have multiple exit strategies for our option trades...
  • Did Someone Say Carry Trade?

    Posted on 4/28/2009 in Education by Edward Ponsi
    We haven't discussed carry trades in quite a while, but this strategy may be coming back into vogue. Many assume that carry trades must include a short position in the Japanese Yen, but this is not the case; any currency that possesses low interest rates becomes a viable shorting candidate for this trading strategy...
  • Exploring The Benefits of Listed FX Options - Part Three

    Posted on 4/23/2009 in Education by Steve Meizinger
    Options vertical spread strategies can help to mitigate any volatility risk. In this current high implied volatility environment, vertical spread strategies are great for entering new FX options positions...
  • Exploring The Benefits of Listed FX Options - Part Two

    Posted on 4/22/2009 in Education by Steve Meizinger
    FX Options, just like other exchange-traded options, gives investors financial control of an asset, but with limited risk. Investors can purchase calls (the right to buy the US dollar exchange rate), or puts (the right to sell the US dollar exchange rate) based on their views of the markets, creating a limited risk profile. Sellers can earn premiums, but with substantial (theoretically even unlimited) risk. If investors expected large potential moves in the FX marketplace, buying calls or puts might make sense.
  • Exploring The Benefits of Listed FX Options - Part One

    Posted on 4/21/2009 in Education by Steve Meizinger
    With the ever-quickening pace of globalization, the popularity of exchange-listed foreign exchange options has only increased as investors seek more transparency and flexibility in their trading. FX Options provide investors with more choices. How can you decide which FX options strategy is appropriate for you?
  • Reversed Dividends, Maximum Loss and Option Commissions

    Posted on 4/20/2009 in Education by Josip Causic
    The goal of this article is to point out that it is of utmost importance to be familiar with the product on which we are trading options. At any given time we should be aware of many factors which come into play when trading options, such as earning releases, dividends, implied volatility, and also technical analysis which determines the proper timing for both entries and exits.
  • Forex Basics

    Posted on 4/17/2009 in Education by Edward Ponsi
    Exploring Forex commissions, the different types of Forex accounts and the actual dollar value of a "pip."
  • The Three Most Beautiful Words To A Call Writer...

    Posted on 4/13/2009 in Education by Old School Options
    Three Most Beautiful Words to a call writer are "You've Been Assigned"...
  • Options Insider Radio Episode 29 Now Available

    Posted on 4/9/2009 in Education by The Options Insider
    In this episode, Mark sits down with Craig Weil, Director of Trading at Online Trading Academy Chicago and the host of Traders Talk Live. Mark and Craig discuss the difficulties many traders encounter when switching to a new product class. They also discuss Craig's 35 years of pit trading experience and the perils of trading everything from equity options to cattle futures. Finally, they explain how to avoid the numerous hucksters and con artists lurking in the world of financial education.
  • Prolonging the Pain of a Bad Options Trade - Part Two

    Posted on 3/31/2009 in Education by Josip Causic
    After my article, Bear Call Gone Bad, I have received several emails requesting the trade fix. The aim of this article is to examine at least one of these possibilities. Again, I am not recommending anything but only explaining the mathematical side of this "fix," and it involves a two step procedure. ..
  • Prolonging the Pain of a Bad Options Trade

    Posted on 3/30/2009 in Education by Josip Causic
    After my article, Bear Call Gone Bad, I have received several emails requesting the trade fix. The aim of this article is to examine at least one of these possibilities. Again, I am not recommending anything but only explaining the mathematical side of this "fix," and it involves a two step procedure.
  • Quantitative Easing & The British Pound

    Posted on 3/25/2009 in Education by Edward Ponsi
    Quantitative easing may sound complicated, but it's really very simple. Also, why does the British Pound continue to slide?
  • Bear Call Spreads Gone Bad

    Posted on 3/24/2009 in Education by Josip Causic
    In this article, I will go over three possible outcomes for a Bear Call spread at expiry. Those scenarios involve the price of the underlying closing within the spread, above the sold call, and below the sold call....
  • Long-Term Forex Pair Trading (EUR/GBP/USD/CAD/CHF/AUD/NZD)

    Posted on 3/20/2009 in Education by Edward Ponsi
    What is the recommended stop-loss size for trading long-term currency pairs?
  • Iron Condors Re-examined: Part Two

    Posted on 3/17/2009 in Education by Josip Causic
    Continuing our examination of Iron Condor strategies in Potash Corp. (POT)...
  • Iron Condors Re-examined: Part One

    Posted on 3/16/2009 in Education by Josip Causic
    Analyzing an Iron Condor trade in Potash Corp. (POT)...
  • Six Mistakes To Avoid When Trading Options - Part Two

    Posted on 3/5/2009 in Education by Bryan Perry
    Time for a reality check on your options trading...
  • Six Mistakes To Avoid When Trading Options - Part One

    Posted on 3/4/2009 in Education by Bryan Perry
    Your goal as an options trader is to move the odds in your favor wherever possible to ensure the success of your trades. Everyone likes to talk about their successes, but it's really the mistakes that teach us the most...
  • Using Inter-Market Analysis to Trade Forex

    Posted on 3/2/2009 in Education by Edward Ponsi
    Exploring the correlation between the GBP/JPY & EUR/JPY currency pairs and the S&P 500.
  • Why Does My Call Decline When the Stock Rallies?

    Posted on 2/27/2009 in Education by Chris Johnson
    Option pricing can be downright maddening. You may own a call on a stock that goes up one day, but your call loses value. Honestly, it's not that uncommon....

  • Know Your Options Secondary Leaderboard