We’ve adjusted a position in the Paid-to-Play portfolio today: [Read more…]
[Options P2P] Adjustment to SMH Position
We’ve adjusted a position in the Paid-to-Play portfolio today: [Read more…]
[Options Premium] Taking a Shine to That Golden Premium
Here’s a snippet that sums up a conversation I had with my Head Technical Analyst Steve Strazza this morning:
Me: Any trade ideas have you excited this morning?
Steve: Nothing. New lows everywhere today.
Me: I know. It’s ugly.
Steve: I can give you a handful of nice charts that are breaking out, but they are all going to fail. Can’t buy breakouts in this market.
Yep. That’s where we’re at. Putting on directional bets in either direction feels like a high risk proposition. Long breakouts are likely to fail, while short breakdowns are likely to get caught offsides in a wicked bear market dead cat bounce.
But this doesn’t mean we’re out of options to earn some profits. Options premiums remain elevated across the board, and we’ve got some areas with clean levels of support we can use as guiderails to sell some delta-neutral premium with higher-than-normal chances of success. [Read more…]
[Options P2P] Adjustment to EFA Position
We’ve adjusted a position in the Paid-to-Play portfolio today: [Read more…]
[Options P2P] Adjustment to XLP Position
We’ve adjusted a position in the Paid-to-Play portfolio today: [Read more…]
Exploding Options
According to the Wall Street Journal, options volume continues to explode – driven primarily by the growing popularity of short-dated options.
Whether looking to speculate, hedge or collect premiums, options players are increasingly flocking to options that have fewer than 7 days to expiration. And with the proliferation of weekly options and three-times weekly expirations in popular index ETFs like $SPY, $QQQ, and $IWM, traders frequently have the opportunity to trade options expiring within 24 hours!
It is no surprise that these types of short-dated options are attractive to some players. They offer the best characteristics of options: defined risk, leverage, and affordability for even the smallest of traders.
Of course, there is no free lunch. As nice as all the pros are, the cons are equally supersized when the ass-end of gamma smacks your trade in the face. As quickly as profits can accumulate when you nail the timing of one of these trades, any hint of delay for a long options position or fear of swift reversal in a short options position can rapidly erode whatever gains you may have in your position. [Read more…]
[Options P2P] New Position: IBB
The next new position in our Paid-to-Play portfolio is: [Read more…]
[Options] Bam! Another Opportunity to Sell Some Puts
Even though stocks have broadly advanced on the first two trading days of October and Q4, today’s market action reminds players that stocks are still risky here and the options market continues to price in this fear in the form of higher than normal options premiums.
As such, the odds favor net premium sellers in these conditions — so that’s what we’re on the hunt for.
Ideal setups are ones in which a nearby support level has revealed itself so we can lean against it for risk management purposes.
One such setup can be found in Brookfield Asset Management, $BAM: [Read more…]
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