Trading Volatility with VIX Butterflies – Broken Wing Advanced Options Strategy Taking Advantage of Recent Lows in the Volatility Index One of the newer option products to appear in our universe as an options trader is the option series designed to trade the CBOE Volatility Index (VIX) (VXX). The VIX is a measurement of the implied volatility of the S&P...
5 New Year's Resolutions for Traders It's probably pretty safe to say that there is no such thing as the perfect trader. Whether you have been option trading for a month or a decade, there likely are areas of your trading that you feel don't measure up to the competition. But that doesn't mean you should just give up. "Strong traders often...
Trading Option Butterflies on Fibonacci Butterfly Patterns Using a Put Butterfly to Trade Cummins Inc. (CMI) Entomologists tell us that a group of butterflies can, at the choice of the writer, be termed a lek, a rabble, or a swarm. I was struck by the bearish Fibonacci based technical chart pattern initially described by Larry Pesavento, termed a 'bearish butterfly',...
10 Lessons I Have Learned in Working With Traders, From A PhD Psychologist When I sat down to write this article, I thought it would be challenging-but useful-to distill over 20 years of trading experience-and 25 years of specializing in brief therapy-into ten lessons that I have learned while working with traders (including myself!). In that time, I've written two...
Five Guiding Principles of Trading Psychology Here are five important principles that pertain specifically to achieving a successful trading psychology: Principle #1: Trading is a performance activity Like the playing of a concert instrument or the playing of a sport, trading entails the application of knowledge and skills to real time performances and this is a core idea. Success at trading,...
10 Tips From the Trenches My buddy asked me to write a couple of option trading tips for a project he's working on. I started reminiscing about all the stupid mistakes I made along the way. I finally managed to whittle it down to 10. Every one of these points has a story behind it and each story contains a lesson...
Trading Option Strangles On Volatile Stocks Implied Volatility Crush in AAPL Can Lead to Profits The recent massive sell off in Apple (AAPL) stock has presented some interesting opportunities for low risk trades. AAPL is a useful vehicle for an option trading portfolio to use. Why? I cannot overemphasize the importance of trading liquid instruments, and in the current world, very few...
Alpha and Beta: Explained Inside Alpha and Beta Statistical Measurements Alpha and beta are important tools for many investors when it comes to figuring out if their investments are doing well and to improve your trading. So what are they exactly and how do they work? What are alpha and beta? Technically speaking, they are both risk ratios used as statistical...
How To Invest: Learn From Wise Market Sayings Wisdom from Investing & Business Quotes Rules, rules, rules, rules, rules. A disciplined investor has the potential to beat the pros. But following rules is hard. Emotions can rule the mind. So can the urge to blaze one's own path, trying to come up with a system that's even slightly better than one that...
Inside Calendar Spread Option Trading ATM Calendar Spreads, Aware of the Gotchas? Over the years of being both an options trader and trainer, I have seen different option strategies that come into and out of vogue. It seems almost cyclical, like fashion. For me, every option strategy has its time and place to be traded. I look at each option...
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