Discussing Volatility “The VIX”
In an earlier post, we looked at how vega can either have a positive or negative affect on any given position since it is a measure of volatility. So what is volatility? Volatility is loosely defined as the “range” a particular stock or index may trade within. For example, a highly...
Recent Posts
Posted by
A Mahendra on
Mar 3rd, 2010
Posted by
A Mahendra on
Mar 3rd, 2010
Butterfly Spread Explained...
Posted by A Mahendra on Apr 27th, 2010
The first and most basic of the neutral option strategies is the butterfly spread, which is a combination of two vertical spreads. Therefore, it’s important to review vertical spreads before attempting to understand the butterfly strategy. A butterfly spread is...
Trading Strategies for Neutral...
Posted by A Mahendra on Apr 13th, 2010
In earlier posts, we covered directional trading strategies that consist of option vertical spreads. A vertical spread can be a bullish (long call spread) or bearish trade (long put spread), but our trading toolbox still lacks strategies for trading neutral...
Bear (Long) Put Spread...
A bear put spread is a fundamental bearish spread in options trading, composed of two put options with different strike prices that expire in the same month, where a “HIGHER” put strike is purchased and a “LOWER” put strike is sold,...
Bull (Short) Put Spread...
A bull put spread functions in the same manner as a bull call spread, except that put options are used rather than calls options to initiate the trade. In a bull put spread, a “LOWER” put strike is purchased and a “HIGHER” put strike is sold,...
Options 101
Discussing Volatility “The VIX”
In an earlier post, we looked at how vega can either have a positive or negative affect on any given position since it is a measure of volatility. So what is volatility?
Volatility is loosely defined as the “range” a particular stock or index may trade within. For example, a highly...
In an earlier post, we looked at how vega can either have a positive or negative affect on any given position since it is a measure of volatility. So what is volatility?
Volatility is loosely defined as the “range” a particular stock or index may trade within. For example, a highly...
Basic Strategies
Top Reasons Why Beginners Lose Money
Trading options is not easy…… It takes time to learn the various techniques and get a feel for how options work, but its not any different than trading stocks and to be successful you have to put in the time. I am going to cover the TOP 5 Reasons why beginners fail to make money or lose money...
Trading options is not easy…… It takes time to learn the various techniques and get a feel for how options work, but its not any different than trading stocks and to be successful you have to put in the time. I am going to cover the TOP 5 Reasons why beginners fail to make money or lose money...
Advanced Strategies
Butterfly Spread Explained
The first and most basic of the neutral option strategies is the butterfly spread, which is a combination of two vertical spreads. Therefore, it’s important to review vertical spreads before attempting to understand the butterfly strategy. A butterfly spread is primarily used to trade neutral or...
Market Thoughts
Jan 2010 Pullback
Last week (Jan 19th to 22th) we saw a pullback in all three major indexes associated with the uncertainty surrounding regulation for the banking industry and whether Fed Chairman would be confirmed for a second term. Over a period of 4 days, the DOW dropped almost 500 points since it peaked on 19th Jan,...