Most option traders understand the concept of delta and theta. Delta is, of course, how responsive an option’s price is to changes in the price of the underlying instrument, while theta is the rate of deterioration of an option’s value due to the passage of time. That makes sense… the greater the time left before an expiration, the more speculative value an option offers. Many option traders don’t concern themselves with gamma, however. It’s not the end of the world if you don’t. It is what it is, and it’s certainly possible to suffer ‘analysis paralysis,’ where one fails to trade at all because they never stop searching for that perfect profile of the so-called Greeks. [Spoiler alert: That perfection doesn’t exist.] The application of theta and delta is good enough to get the job done. Nevertheless, gamma is an idea everyone might want to add to their repertoire, even… more
Vega. Not even veteran option traders are readily able to explain it, let alone utilize it in their trading. And, it's certainly not necessary to make good use of all that options have to offer. Still, knowing what vega is and how it works can't hurt. To that end, here's a rundown of both, using a real-life example. It's a... more
Stocks are on the mend on Tuesday, largely led by most of the all-important names that make of the group known as FANG stocks. But, the FANG stocks as a group and individually are far from showing us the convincing strength needed to pull the whole market out of trouble. Indeed, one name in particular is proving persistently weak. The... more
– The white metal is far more volatile and that can be used as an advantage by savvy investors. – By Simon Constable, TheStreet.com Anyone bullish on precious metals should consider silver instead of gold. The white metal tends to see far more volatility, which is an advantage for traders in an up-trending market. Plus, silver prices are still playing... more
How much is too much? It’s not an easy question to answer for any area, but it’s proven particularly tough as it pertains to stocks. For the past few months, just when it looks like the market can’t climb any higher, it does. Worse, most of the usual tricks of the trade aren’t working like they used to. There’s one,... more
– Bitcoin prices were backing down on Thursday from another surge akin to its sudden rise in late 2017 – By Tiernan Ray, TheStreet.com There goes bitcoin. After soaring almost 20% on Wednesday alone to just below $14,000, the virtual currency succumbed to gravity on Thursday morning, dropping below $12,000. The price of bitcoin had surged by more than 80% in less... more
Earlier this month the FANG Options Trading Advisory scored a big, and quick, win on some Facebook (FB) calls. Specifically, on the 14th we paid $9.45 for some Facebook June monthly (06/21) 172.5 calls (FB 190621C172.5), and were able to sell those calls on Monday the 17th – the next trading day – at $16.68 per contract. That's a 77% score in... more
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