What does the SKEW Index Mean to Options Traders?

What does the SKEW Index Mean to Options Traders?

In February, 2011, CBOE introduced the S & P 500 SKEW Index, as another means for investors to gauge market volatility and the potential risk of a “black swan” type of event. The SKEW Index is an option-based indicator that measures the perceived tail risk...
Weekly Options – Be Aware Of The Risks

Weekly Options – Be Aware Of The Risks

Options trading becomes more and more popular every year. The options become more liquid and more traders use them for hedging, speculation, income etc. Weekly options (weeklys), introduced by CBOE in October 2005, are one-week options as opposed to traditional...
Forex 101:  Some Basics on Understanding the Foreign Currency Market

Forex 101: Some Basics on Understanding the Foreign Currency Market

Many investors consider the foreign exchange market (also referred to as Forex or FX) to be one of the most intriguing and exciting markets in the world. The foreign currency market is an extensive subject; and too vast to cover in one article. Today we will cover the...
Inverse ETFs; Are They for You?  Understanding the Plus’s and Minus’s

Inverse ETFs; Are They for You? Understanding the Plus’s and Minus’s

Exchange Traded Funds (ETFs) are funds that track indexes such as the S&P 500, Nasdaq 100, Dow Jones Industrial Average, Russell 2000, etc.  When an investor buys shares of an ETF, they are actually buying shares of a portfolio that tracks the yield and return of the...
Who thinks Covered Writes Should be Illegal?

Who thinks Covered Writes Should be Illegal?

Dan Sheridan posted an article yesterday “Why should Covered Writes be Illegal?” A covered write is more commonly known as a covered call. Dan has an example of XYZ stock (I love XYZ stock…) +100 XYZ stock @ 90.00 -1 Aug 95 Call @ 1.00 Dan made a few...
What is a Bull Call Ratio Backspread Option Strategy?

What is a Bull Call Ratio Backspread Option Strategy?

The ratio backspread is a strategy used by traders to create a position with a limited loss and varying degrees of profit. If the trade goes against you and the position is setup correctly, it can help guard against a large loss. This can be useful, especially when...