As pictured below, equity indexes have been highly range-bound since the end of April. That trading range has been between about 470 and 510 in the Russell 2000, and 865 and 930 in the S&P 500. I doubt that this range is likely to persist for much longer. Fans of technical analysis will note that SPX and RUT are caught in the narrow space between their respective 50- and 200-day moving averages: a break above or below either average…
Thursday, May 28, 2009
In Part I, our Performance Comparison for May showed an average return per trade of 6.40%, with a model portfolio* return of 5.13%—compared to the S&P 500's gain of 1.53%. Here are the trades that got us there:
Thursday, May 28, 2009
We’re a bit behind on Calendar Options reviews, so we’re making this one a double-header— quite apropos, as it turns out, because the story is much the same for April and May: A strong market uptrend and steadily falling implied volatility continued to work against us, but we still came through each cycle with a profit. That makes three straight months in which we’ve shown that a market-neutral income strategy using calendar spreads can work in trending markets, even when…
Thursday, April 2, 2009
The Rookie’s Guide to Options: The Beginner’s Handbook of Trading Equity Options Mark D. Wolfinger (W&A, 2008) One of the ideas central to Mark’s work in his blog, his magazine articles, and in this book is that options are an excellent tool for just about any investor who wants to manage risk more effectively. What’s especially admirable about this book is that it takes a reader with no prior knowledge about options from the most basic concepts all the…
Friday, May 29, 2009
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