Commissions are a cost of doing business, and as such shouldn’t be ignored. It’s worth the trouble to spend a few minutes checking that your commission structure matches with your trading style, and that you’re getting the best rates available.
But paying too much attention to commissions can be a double-edged sword: there’s a certain type of trader we hear from pretty regularly, the sort who obsesses about commissions, 60/40 tax treatment, exchange fees, etc., such that they seem to…
We mentioned yesterday evening in a note to subscribers that in the past, high volatility environments have been the best times to sell option spreads. Rising volatility alone isn’t a sufficient signal – as anyone who was short volatility during the past few weeks can attest. But once high-flying implied volatility readings turn the corner or flatten out, that’s often a good time to sell premium at those elevated levels.
From a directional perspective, there are signs that, two…
Nassim Nicholas Taleb, author of the widely discussed The Black Swan and Fooled By Randomness, is out with a new paper. “The Fourth Quadrant: A Map of the Limits of Statistics” pursues a thesis very familiar to his readers, namely that economists and finance professionals put society at risk by offering false comfort in the form of statistical models.
Risk Does Not Equal Volatility
The novel effort here is Taleb’s attempt to map out which kinds of risks and…
On a day like this, you really need to start off any post with some good news. Apparently, one of the greatest television shows of our time might be made into a movie: we’re talking about Arrested Development. So you see, there is hope for this country after all. (Nevermind that we’re all so scared of the boogeyman that the government will be warrantlessly watching the movie over our shoulders; that’s a matter for another day.)
Okay, now…
Thursday, December 4, 2008
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