When a daily session moves in the direction opposite the prevailing trend, it is called a “divergent bar.” As a reversal day, it signals a likely change from bullish to bearish, or from bearish to bullish.
Just about every place I turn someone is spouting the use of covered calls or naked calls. The basic premise is one can pick up "easy money". Unfortunately, I'm aware that there is only so much one person can do to stop this insanity and I've tried in previous articles.
One of the interesting features about options is that there is a relationship between calls, puts, and the underlying stock. And because of that relationship, some option positions are synthetic to others. The prices of put and call optionshave an identity relationship through the concept of put-call parity.
The graphically named “gut strangle” is a seldom-used strategy, but it might work in some circumstances. This involves trading in-the-money calls and puts. A long gut strangle is set up by buying both options; and a short gut strangle calls for selling both sides.
In the second week of October 2018, the Dow Industrial Average tumbled 1,300 points within a two-day period just ahead of earnings season. How did it happen? There were several explanations for why stock prices sold off, but the most obvious was that investor fear had changed market sentiment.
When deciding to build a diversified investment portfolio, there are many different considerations. Which asset classes do you buy? Large cap or small cap? US only, or International too? Mutual funds or ETFs? How much in bonds? Passive or active management? Growth or value?
Hardly a day goes by that I don't read an article or hear some pundit extol the merits of selling puts (put-write).This article will discuss various variations of put-write strategies. What accounts for put-write strategies under-performance? How to fix put-write underperformance? Why "easy money" isn't so easy.
Have you been taken by surprise by movement of your stock? Options traders who find themselves on the wrong side of a trade have experienced this dilemma, but as often as not, it occurs as part of a move and retracement.
Here are 14 actionable ideas that will help you improve your trading from home. Implementing these ideas will help aspiring traders move toward the consistent profitability they seek.
Technicians tend to focus on single indicators, such as Bollinger Bands or the t-line. These are used to attempt to perfect a timing system. Individually, each signal has merit. Combined, the reversal signal is exceptionally strong.
“In fact, the crowd sees hardly anything out there that might end this market party.” Michael Santoli made the above statement during CNBC’s closing market wrap on January 26th, 2018. He had reason to throw caution to the wind as the S&P 500 closed the day up by more than 1%, setting another record high.
Last month we posted some updates to the Anchor strategy that were obtained using an in-depth back testing of the strategy and variations of it using the ORATS Wheel software.We adopted three conclusions last month: