ETFs (Exchange Traded Funds) have increased in popularity among traders of all types since their introduction in the early 1980's. In a nutshell, Exchange Traded Funds (ETFs) are funds that track indexes such as the S&P 500, NASDAQ, Dow Jones, Russell 2000, etc. When an investor buys shares of an ETF, they are buying shares … [Read more...] about Consider Sector ETFs as a Portfolio Hedge
The decisions of millions of investors and traders affect the price movements in the options market. There are many useful statistics in addition to price movement that indicate what other market participants are doing. This article will focus on two factors many traders consider when trading options; daily trading volume and open … [Read more...] about Option Volume and Open Interest; Why Are They Important for Options Traders?
How the VVIX can be Used as a Barometer in Trading Most traders are familiar with the VIX, which measures the volatility of the S & P 500. The VIX was introduced in 1993 by the Chicago Board of Options Exchange. The index measures the 30-day forward volatility of a combination of put and call options on SPX. The … [Read more...] about How the VVIX can be Used as a Barometer in Trading
Pairs trading is generally considered a market neutral strategy. Some traders use the strategy as a directional strategy. Pairs trading is one of many approaches a trader can use to reduce risk. The strategy often combines a long position with a short position, using a pair of highly correlated assets. A pairs trade can … [Read more...] about Discover Pairs Trading
Moneyness is a common term which is very important when looking at an option chain. Moneyness in an option chain refers to the relationship of where the price of the underlying is currently trading and the strike price of the option within the option chain. If this is the first time you have heard the term Moneyness, the … [Read more...] about What is Moneyness in Options Trading…
One of the myriad of strategies available to traders are credit spreads. Two popular types of credit spreads are the Bear Call spread and the Bull Put spread. Today's article will cover the basics of these spreads … how they are constructed, how much can be gained, as well as the risk involved and how much capital can be … [Read more...] about Credit Spreads; a Review Of The Basics
Today you will learn about a basic synthetic option position called the synthetic long stock position. You can create a synthetic long stock position to replicate and replace buying stock outright. You also can create a synthetic short stock position to replicate and replace selling stock outright. A synthetic long stock position … [Read more...] about What is a Synthetic Long Stock Position?
Market profile can be used by both short and long term traders. For the most part, market profile is based on information derived from price and volume. Market Profile compiles information from the past and combines it with the present to help forecast the potential future. This information is gathered and provides areas on a … [Read more...] about An Overview of Market Profile and Trading…
Has the topic of options been a challenge for you to understand? It can be confusing when you first start to learn about options. Once you become more familiar with what an option is and how the pricing is determined, you will feel more comfortable. As you get used to the terms and language of options, you’ll be on … [Read more...] about Some Key Basics To Understanding Stock Option Contracts…
Have you ever been assigned in options trading? Many traders have gone through assignment at some point in their trading life, and it can be an uncomfortable feeling. Today's blog will be a refresher on the "ins and outs" of option assignment. Before I get into the specifics about assignment in options trading, it's … [Read more...] about Understanding Assignment in Options Trading