How Time Decay in Options Works

How Time Decay in Options Works

Time decay in options, also called “Theta”, is the measurement of how much the value of an option will lose or gain each day as it gets closer to expiration. Time decay is not linear – the theoretical rate of decay accelerates as the option gets...
What is the Choppiness Index and How Can You Use It?

What is the Choppiness Index and How Can You Use It?

Are you using oscillators such as fast and slow Stochastics, Williams % R, and MACD? Have your results been less than you had hoped? Then you may want to take a look at the Choppiness Index. The Choppiness Index can be used as an indicator which could give hints as to...
Technical Indicators 101: Relative Strength Index (RSI)

Technical Indicators 101: Relative Strength Index (RSI)

Today we will talk about another technical indicator, the Relative Strength Index (RSI). The RSI is considered to be a leading indicator similar to Stochastics and Williams %R, and generally, precedes price movement in the underlying. RSI is a popular indicator used...
What’s the difference between SPX and SPY Options?

What’s the difference between SPX and SPY Options?

SPX and SPY are two very similar instruments from which a trader can choose. Today we will talk a bit about the similarities and differences between the two. What is SPX? SPX is the nickname for the Standard and Poor's 500 Index. It is based on the 500 largest...
Technical Indicators 101:  The William %R Oscillator

Technical Indicators 101: The William %R Oscillator

I've written over recent weeks about a few of the numerous technical indicators available to traders. This week I will touch on the Williams %R oscillator. This oscillator was developed by well-known technical analyst Larry Williams. It is similar to the Stochastic...
What is a Diagonal Spread or Time Spread?

What is a Diagonal Spread or Time Spread?

A diagonal spread, also known as a time spread, may be a strategy you would like to implement into to your trading arsenal. Today we will discuss how a diagonal spread is created. We will also discuss some of the advantages and disadvantages of a diagonal spread. A...