If you're like most new options traders, you probably don't worry too much about the predictive pricing measures called "the greeks." And, if you're like veteran options traders, odds are good you're mostly focused on delta and theta... which quantify (respectively) responsiveness to changes in the price of a stock or index and the amount of value an option loses each day solely due to the passage of time. Those two data nuggets can keep you too busy to worry about the lesser-watched greeks like gamma, vega, and rho. Of those three though, the second one - vega - is worth keeping tabs on for a certain subset of options traders. Namely, spread traders (credit as well as debit) can squeeze out a few more profit points or save some money by paying a bit more attention to vega. But, first things first. What the heck is vega? The broad… more
Want to be a better trader? Then learn from real-life examples. Use winning trades as templates for future trades, and pay particular attention to how technical indicators you may not be familiar with unfurl with these trades. You just might end up adding a new trading tool to your toolbox! With this backdrop in place, let's run through some of... more
— "The market looks to have digested most negative news during the recent sell-off from $41,000 to $29,000," one analyst said. — By Omkar Godbole, Coindesk While bitcoin (BTC) seems to have found a bottom, a quick rally to record highs looks unlikely, analysts told CoinDesk on Wednesday, saying the cryptocurrency now faces price consolidation. "Bitcoin looks to have bottomed... more
Do you think quadruple-digit winners are just fish tales from traders looking for a bit of an ego boost? Admittedly, such trades are few and far between. They're not impossible though. We know it, because we just made one. You can find these setups too. Not all of them will do this well. Indeed, most of them won't even come... more
By Keris Lahiff, CNBC Oil's rally is hitting the gas. West Texas Intermediate gained another 1% on Wednesday, pushing it well above $68 a barrel, after OPEC+ doubled down on its decision to ease supply restrictions through July to keep up with demand. As WTI crude traded at its highest level since October 2018, energy stocks rallied alongside it. The... more
Last week we started an instructive dive into debit spread trades, using a real-life example from our Debit Spread Options Advisory. Namely, we dissected why we were bullish on Caesars Entertainment (CZR) back on April 20th, and why we opted to purchase the 83 calls expiring a week and a half later and at the same time chose to sell... more
Are you looking for something a little less aggressive than your recent trades have been? How about a strategy with a lower risk, higher-odds profile… even at the expense of some upside? (After all, a reliable handful of small winners is just as good as the occasional homerun.) Option spread trades are one possibility. And don't let the fancy name... more
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