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After the publication of my previous article, I have received some emails from our readers asking for a specific example. Some even said that the article was incomplete without the example, for I have provided the readers only with a template for an I.C. At any rate, I will oblige the readers' request, as I usually do, and present a current I.C. trade that I am in...
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Tips, tricks and strats for choosing the right put option...
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Warning Will Robinson! There are no acceptable covered call opportunities this week. So stay clear!
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Sooner or later, the financial sector will come back. Calling a bottom (or a top) in anything is downright impossible. Anyone who does it once is lucky. So how do you play the longer term, realizing that you don't know when the eventual reversal will happen? The better way to play this is with an exchange-traded fund (ETF) that covers the sector, such as the Financial Select Sector SPDR (XLF). Or, better yet, you could commit even less cash and play LEAPS...
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A rundown of high-yield covered call opportunities.
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In this episode, Mark is joined by Peter Hauser, President of Sungard's Microhedge Business Unit. Mark and Peter explore the reasons behind Microhedge's continued popularity with options traders. They also examine new upgrades to the software and the rumors of an impending retail version of this long-running analytical platform.
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Exclusive OIC 2009 Panel Audio: Exchange Leaders Panel
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Exclusive OIC 2009 Panel Audio: Technology Leaders' Forum (Challenges in Today's Environment)
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A rundown of high-yield covered call opportunities.
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A rundown of high-yield covered call opportunities.
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In my previous article, I alluded to the importance of trading psychology by discussing two types of trading errors: Decision Making Error and Data Error. Some readers have indicated their desire to learn more about it. In this article, I will dive deeper into the topic of option trading and trading psychology.
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Sell stops, averaging down and "the secret to surviving" when trading options...
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Knowing when to exit an options trade is the most-difficult part of trading options, according to a recent survey. But after several years of managing my shorting service and 25 years of trading options, I have some rules...
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I hate to be the bearer of good news, but there are some phenomenal covered writes to do across the diverse universe of S&P broad market sectors...
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Leveraging earnings plays with options is a great trading strategy because earnings are more predictable than most of the market. If a company disappoints, the stock usually declines, while a surprise typically spurs a stock gain. And those moves often come regardless of what the market is doing...
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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 volatility on the options market. In addition, Mark & the hosts devoted an entire segment to the vagaries of volatility skew. Options Insider Radio listeners can find the complete broadcast here...
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Profit Big on Someone Else's Dime - Write Calls on GILD & Buy Puts On SPDR
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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...
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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.
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Exploring the relationship between the CBOE Volatility Index (VIX), CBOE Russell 2000 Volatility Index (RVX) and CBOE Nasdaq Volatility index (VXN).
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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...
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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...
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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?
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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?
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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)...
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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.
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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...
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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...
