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A brief overview of the Forex market along with an overview of the advantages of Forex trading...
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I've often heard some investor-traders refer to technical analysis as "voodoo." Granted, there's a lot of so-called "indicators" out there that are more than a little mysterious and subjective, from Gann lines to planetary alignments. And some of their proponents are in their own galaxies as well. Now, even many of my option trader buddies who do volatility arbitrage are TA cynics. But, what I have to remind them of is that looking at volatility charts is a form of "technical analysis" just like looking at moving averages of price. They are both based on historical statistics, plotted on a graph in a given time frame. They hate when I tell them that, because they think that statistical vol arb is somehow more pure than "voodoo" statistical price analysis.
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Writing credit call spreads can be the key to victory in the battle for market domination...
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Writing credit call spreads can be the key to victory in the battle for market domination...
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In light of the insane volatility in the markets recently, I thought this week it might be helpful to cover a potential strategy on very volatile stocks: Upside-Down Split-Strikes
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In this article, we'll examine the similarities and differences between the spot forex and forex futures markets...
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In this article, we'll examine the similarities and differences between the spot forex and forex futures markets...
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The FED lowering it's effective Fed Funds target rate to between 25 bp and zero, and it's sweeping new debt purchase program, sent the euro up by 3-cents in 90 minutes, from roughly $1.38 to over $1.41. In this article we'll look at the EUR/USD pair as well as how to convert forex volatility for your trading range...
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In this article, we'll explore a strategy where we not only expect options prices to drop to zero, but we strive for it and position ourselves to take advantage of it with option credit spreads. Why? Because someone else's loss becomes our gain!
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Stock splits can happen for a variety of reasons, but even if you're only trading the options, you're still impacted by any changes that happen in the underlying shares. There's no reason to panic, and there's nothing you need to do. But when companies attract big-money investors and share prices start soaring, it's good to know what could be on the horizon for some of your investments.
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Fib strategies have become very popular in forex trading. But today there are so many permutations and variations on this basic theme that sometimes the useful aspects of this technique get lost in the shuffle. This question opened the door for what we might call the "Great Fibonacci Debate". Read on...
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A typical calendar spread is the sale of a shorter-term option and the purchase of a longer-term one. These spreads often offer the average investor the chance to sell overpriced short-term premium with relatively little risk. We'll kick things off by looking at a simple long at-the-money calendar spread...
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A typical calendar spread is the sale of a shorter-term option and the purchase of a longer-term one. These spreads often offer the average investor the chance to sell overpriced short-term premium with relatively little risk. We'll kick things off by looking at a simple long at-the-money calendar spread...
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This week I want to talk about the early exercise of options. In order for it to make sense to early exercise an option, there must be some positive cash flow that results from the exercise. We'll look at calls and puts separately to determine when the early exercise is the right way to go.
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Since we are in the midst of a credit crisis, our chosen indicator for gauging fear in the current environment is the Ted Spread. Another famous "fear gauge", the CBOE's Volatility Index (VIX), is currently reflecting a slightly more relaxed environment. In this article, we chart the surprising similarities between the VIX and the Ted Spread.
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As an options trader, would you like to be able to determine both your profit potential and exactly how much money you're risking? If so, credit spread trading may be for you. When a trader establishes a bearish position using a credit call spread, the premium he pays for the option purchased is lower than the premium he receives from the option sold. As a result, he still brings in money when the position is established, but less than he would with an uncovered position.
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As an options trader, would you like to be able to determine both your profit potential and exactly how much money you're risking? If so, credit spread trading may be for you. We'll start by discussing how to use a credit put spread in place of an outright sale of uncovered put options...
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Because Forex is relatively new to the retail trading public, scammers who make unrealistic promises are becoming a constant nuisance. Here's a good rule of thumb, and it doesn't matter if you're trading stocks, futures, options, or Forex – If anyone promises outlandish returns, don't believe it; it's probably a scam.
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Examining spread margin and the impact of portfolio margin on your trading account...
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Breaking down the margin calculations for short option positions allows you to determine how many options you can sell.
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With the "diagonal backspread," you buy longer-term options and sell a lesser number of nearer-term options that are more in-the-money. Diagonal backspread opportunities often exist in volatile, relatively high premium markets, such as we have been experiencing. With the call diagonal backspread, you can take advantage of the fact that in nervous markets, the nearer-term lower-strike options become steeply overpriced, while the longer-term higher-strike options tend to remain fairly priced.
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Exploring the difference between equity and index multipliers, settlement values, exercise and more...
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Exploring when and how to use cash-secured equity puts (CSEPs)...
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Exploring when and how to use collars to manage the risk of your equity portfolio.
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Okay, so things are rough out there. But just because the world is facing financial Armageddon, and long-term investments are falling apart faster than the New York Mets in September, that doesn't mean your trading account has to suffer. In fact, some traders thrive in this rock 'em, sock 'em environment. Just take a look at the volatility in the Great Britain Pound – U.S. Dollar currency pair (symbol GBP/USD)...
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What Is The TED Spread & Why Is It At The Highest Level Since 1987?
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Currency volatility is at its highest point since the year 2000, as the markets swing wildly while absorbing bad news of historic proportions. The head spinning moves we've seen recently have driven the Average True Range, also known as ATR, of the major currency pairs to levels that are rarely reached. In this article, we will explore the basic mechanics of ATR and explain why it is so important to forex traders.
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Traders Talk Live Radio (which airs on AM 560 WIND in Chicago) recently featured www.TheOptionsInsider.com founder Mark S. Longo as a special guest. Mark discussed the impact of the short selling ban on the options market as well as a few protective options strategies for these troubled times. Options Insider Radio listeners can find the complete broadcast here...
