I dare you to Google “options trading” and then spend the next five hours combing through the results. When it comes to options trading, the signal-to-noise ratio online is so low it can be difficult to find new or useful information. That’s one of the reasons we started Expiring Monthly: The Option Traders Journal – to provide a venue for traders to find smart, fresh ideas. The first issue will be published on Monday, March 22nd. If you hurry, you can still…
Monday, February 1, 2010
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We’re announcing the publication of a new online-only monthly magazine called Expiring Monthly: The Option Traders Journal. It’ll be published on the Monday following each options expiration (clever, right?) and the first issue is scheduled for Monday, March 22. The contributing editors are among the top options bloggers around, and I’m very happy to be among them. The editors are: Bill Luby (VIX and More) Adam Warner (Daily Options Report) Mark Sebastian (Option 911) Mark D Wolfinger (Options for Rookies) Jared Woodard (Condor Options) Each issue offers…
Wednesday, January 20, 2010
An unexpected margin call the other day prompted me to dial up folks I know at a couple of brokerages and ask what the heck was going on. It appears that the political backlash against the financial industry is hitting us little guys: regulators are pressuring brokers to tighten margin requirements, and some of the restrictions they're pushing are truly absurd....
Thursday, December 31, 2009
For an options trader, one of the most remarkable aspects of the 2008 financial crisis was that it featured months in which many options closed in or near the money when, even weeks before, they were deep out-of-the-money (DOTM) and “worthless.” The lesson is that ostensibly overpriced options are totally devoid of value, until they aren’t. This is not a new lesson: academics have spent decades creating and testing different models (Hull and White, Heston, Dupire, etc.) to better accommodate…
Friday, December 11, 2009
The Powershares Nasdaq 100 Trust (QQQQ) is a highly liquid, very popular ETF with actively traded options. But for traders who want to implement an options strategy on the Nasdaq 100 with any precision, QQQQ may not be the optimal product. Assume you are trading a strategy that includes the following rule: When the 14-day Relative Strength Index (RSI) closes below 30, sell a put with a delta of -20 in the nearest cycle with at least 14 days until expiration. We regularly…
Saturday, February 27, 2010
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