SteadyOptions Trading Blog

Ever seen those ads about making 5% per month with Iron Condors? It’s certainly possible, but you would have to be a bit naïve to think making a 60% per year return is simple. Most professional money managers cannot achieve those returns, so why would a retail trader be able to achieve it?

Stock Options Exercise and Assignment are among the most basic aspects of options trading that every options trader should understand. In this post I painstakingly explain one of the most basic option basics to a reader who is having trouble understanding that concept.

I would like to share with you another aspect of trading- my fascination with the different levels of trading experience. Starting in one of the latest discussions in the comments section, I shared with one of you that experience in trading comes in stages. I call those the 4 Levels of Trading.

Investors of LJM Preservation and Growth Fund, a $772 million alternative mutual fund, got an email on Tuesday February 6, 2018: "LJM strategies have suffered significant losses." The fund (ticker: LJMAX) didn’t report the loss until late the following day, so shareholders were in the dark as to what happened.

There are many more ways to trade volatility today than there was prior to the financial crisis. Numerous ETF’s and ETN’s have been created as a way for traders to hedge volatility risk or gain exposure to it. Some of these are leveraged 2 and 3 times. To say they can be risky would be an understatement.

While trading quotes can be taken out of context, and it is crucial to have a full understanding of what the trader meant at the time, they can also give traders important insights.  I asked some of my followers for their favorite trading quotes. There were a lot of great suggestions, but here are the top 50 inspirational trading quotes that I’d like to share.

Shorting volatility via different products like SVXY or XIV has been a very popular and profitable strategy in the last few years. We know what happened on February 5. VIX spiked over 100%, causing a complete collapse of SVXY and XIV, wiping billions of dollars.

The naked put is a low-risk strategy, despite commonly held beliefs to the contrary - guest post by Michael C. Thomsett. The market risk of the naked (uncovered) put is identical to the market risk of a covered call. However, the two strategies also have important differences:

The popular short volatility product XIV will liquidate after the harrowing after-hours decline. Credit Suisse has officially announced that the XIV has reached an acceleration event. This is a very bad outcome for anyone who owned one of these products such as XIV, SVXY, VMIN, EXIV, IVOP, XXV, and ZIV.

During the market's closing hour on Monday, February 5th, some sort of "flash crash," likely triggered by margin calls, attacked the CBOE Volatility Index (INDEXCBOE:VIX), also known as the "fear index." What was a bad day, turned into a never before seen move. Here is it: 

In trading, as in life, sometimes the best solutions come after a problem has occurred. For this reason, I have decided to provide you with a slightly different blog post, or slightly different perspective. Instead of writing on a certain topic, I have decided to take the time and compile one based on a recent e-mail from one of my followers.

This is a guest post from Bill Luby. It was published in his VIX and More blog in December 2012, but still remains very much relevant today. With VIX spending most of the last year around 10-11, today's 30% spike is a good reminder that volatility is not dead yet.