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Expiration Surprises to Avoid

Unless buying or selling options with a distant expiration date (LEAPS), each trader understands that the value of an option portfolio becomes increasingly volatile as the time to expiration decreases. It is important to be aware of specific situations that may crush (or expand) the value of your positions. 

Betting on AAPL Earnings?

Apple is a company that tends to surprise Wall Street every time it reports its quarterly earnings, usually on the upside, occasionally on the down. As a result, the stock often makes big moves the next day - sometimes as much as 7-8%. How can you leverage those moves?

Options: The Zero Sum Game Myth

Zero-sum is a situation in game theory in which one person’s gain is equivalent to another’s loss, so the net change in wealth or benefit is zero. A zero-sum game may have as few as two players, or millions of participants. Options trading is considered by many a zero sum game. But is it really a zero sum game?

Brexit Still Affects The Stock Market

The end of 2016 may well have seen high consumer spending and a low unemployment rate, but there are concerns for 2017.The people of the UK voted for their nation to exit the European Union - a move known as Brexit, and the world awaits with different views to see the impact.

Options Expiration: 6 Things to Know

When you sell options, expiration is an anticipated event. When you own options, it's something to dread. There's much more to an options expiration, and if you are a newcomer to the options world, there are things you must know to avoid unpleasant surprises. Many investors come to the options world with little investing background.

Few Facts About Implied Volatility

The following infographic describes the facts about implied volatility, where does it come from and how to calculate implied volatility. Implied volatility is an estimated volatility of a security’s price. It is very helpful in calculating the probability and is used to adjust the risk control and trigger trades.

Early Exercise: Call Options

How would a trader like you decide to do early exercise? Say you bought calls when they were trading in the 1.0 -> 2.5 range, now underlying has risen so that calls trade bid-ask at 4.0 / 4.8 and there is strong possibility of it going higher. Also assume in another case that they trade in the 6.0 to 7.0 range.

How To Trade Risk Reversals

A risk reversal is a strategy that involves selling a put and buying a call with the same expiry month. This is also known as a bullish risk reversal. A bearish risk reversal would involve selling a call and buying a put. Today we’re going to examine the bullish risk reversal.

What Is The Best Options Strategy?

I'm often asked by novice options traders what is the best options strategy. The answer is that there is no such thing "the best options strategy". Each strategy has its pros and cons. Each strategy will work the best under certain market conditions, and no strategy will work under all market conditions.

Using Options To Hedge Investments

Options inherently have been met with much speculation, and anyone who trades them knows this. Many bankers and financial advisors steer clear of options because of their potential risk. Are they correct in doing so? I don't believe they are. Options when used correctly can provide better annual returns than a traditional buy and hold method.

Best Trading Articles 11/19/16

Reading as much as we can about trading always helps us to improve and become better traders. I'm pleased to share some of the best trading articles, podcasts and videos from some of my favorite traders, bloggers and educators. If you came across an interesting article please share it in the comments section.

Buy the Winners: the Power of Momentum

Momentum is a phenomenom that tends to leave academics scratching their heads as it shouldn't really exist in a world of perfectly efficient markets.  Yet for 100 years a simple rules based, quantitative approach would have provided the opportunity to earn increased returns with reduced volatility and drawdowns vs. a buy and hold approach.

Best Trading Articles 11/12/16

Reading as much as we can about trading always helps us to improve and become better traders. I'm pleased to share some of the best trading articles, podcasts and videos from some of my favorite traders, bloggers and educators. If you came across an interesting article please share it in the comments section.