Implied volatility yields a theoretical value for the option equal to the current market price. Simple, yes? Well actually, not really. Implied volatility is just that implied. Its not factual, not real, not “right on the money” or correct beyond reasonable doubt.
Its really just a calculation based on what should be. A lot of “ifs”, […]
When you look at purchasing your options beware of the price difference between the buy and sell prices. Often is this is a wide spread, it is indicating that there is very little interest on either side of the market. As the gap widens between rthe two, your profits will decrease.
Look for narrow spreads, and […]
When vertical spreads are mentioned, they quite often come with monikers such as bull” and “bear”. This lends most to think of vertical spreads as directional plays which is true. However, vertical spreads can be used to take advantage of two other potential trading opportunities – time decay and volatility movement.
If you are looking for […]
Be aware of the following when looking at stocks to place options over
A market professional may want to accumulate a large position in a stock that is trending strongly; either for his own account or for a major client. How does he/she do this? If he starts placing buy orders in the pool, he will […]
Recent events have inspired me to post to this blog. as we saw, the market took a big hit recently and I have heard a lot of sad stories come from individuals who were holding a large number of investment stock in there portfolio. Many had been on a hold and buy strategy, and now […]
By Dr. Gary Dayton
1. People are born traders.
While it is true that certain personal characteristics make it easier to trade, no one is born a trader. One of the main themes of the Market Wizards books written by Jack Schwager is that almost none of the market wizards were successful from the start. They all […]
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