SteadyOptions Trading Blog

Delta (positive or negative) tells us which way we want the underlying to go to make money. Delta applies to single positions but also to the whole portfolio. When Managing our portfolio from a macro perspective, Delta is probably our main risk exposure. It is important to manage the portfolio delta to limit directional risk.

Is time in trading important? If it matters, then why nobody talks about it? What are the most important elements of trading? Capital, Trading System, Money Management, Black Swans, Luck? If you imagine trading on an XY axes, what would be your “X” and what would be your “Y”?

Time to address the hardest questions face to face. After years of frustration actively trading stocks, Mark started to suffer from erectile dysfunction. Frustration and stress were the size of Mount Everest, and as we all know, hot girls don't stick around for consistently losing traders.

Stock replacement is an investment strategy that attempts to replicate the returns of a certain asset or group of assets by using a combination of different derivatives rather than buying the individual shares in the market.

As of right now, with all the focus on Apple Inc (NASDAQ:AAPL) earnings, due out on 2-1-2018 after the market closes, and its new set of iPhones, in particular the iPhone X, you can find quite convincing research pieces for a bullish thesis (an earnings beat) and equally convincing pieces on a bearish thesis (an earnings miss). 

How much capital do you need to start trading options? This is a question I get asked a lot (along with “are 5%-10% per month returns realistic…). When starting out in options trading, it is definitely advisable to keep risk small and not start trading a large account straight away.

2017 shattered many records, but not the ones most folks think of. The records left shattered in many pieces in 2017 were all risk-related. Specifically, 2017 was the year that risk forgot.   Metaphorically, this was the year in which a drunk driver wearing a blindfold could drive across town...and not hit anyone or anything along the way.

“The right trading behaviors start as rules and evolve into habits.” – Brett Steenbarger Across sports, business, and entertainers the top performers are not the ones that have to think through their every action. The top performers have trained themselves to react at the right time and do the right thing in each situation.

To become an engineer you have to study 4 years, and probably another 4 years (at least) to become a good one. Why people expect it to be different in trading? What does it really take to become proficient in trading? Can you expect to double your account every 6 months after being an active trader for few months?

2017 marks our sixth year as a public service. It was an excellent and exciting year. We closed 113 winners out of 138 trades. Our model portfolio produced 169.1% compounded gain on the whole account based on 10% allocation. The winning ratio was 81.9%. 2017 was our first year ever without a single monthly decline. 

 The Delta, Gamma, Theta, Vega, and Rho options trading Greeks don’t make up an option’s price. Options Greeks estimate how an option’s price might change with a change in the underlying stock price (Delta, Gamma), time (Theta), volatility (Vega) and interest rates (rho).  The following infographic describes some of the options pricing Greeks myths.

In a year of uncertainty that included a recalcitrant North Korea, Britain’s continued exit from the European Union, multiple terrorist attacks, and global populist uprisings, to say 2017 was a turbulent year is a bit of an understatement—except, that is, in stock markets.