Trading Options Around Earnings Releases, Part I

Trading Options Around Earnings Releases, Part I

One of the advantages of an option based approach to trading is the ability to capitalize on trades that have a statistically well-defined high probability of profit. When events occur with predictable regularity, the knowledgeable option trader can effectively...
The VIX: What Is It, and What Can It Mean for Your Options Trading?

The VIX: What Is It, and What Can It Mean for Your Options Trading?

What is the VIX? "The VIX Index is an up-to-the-minute market estimate of implied (expected) volatility that is calculated by using the midpoint of real-time S&P 500 Index (SPX) option bid/ask quotes. More specifically, the VIX Index is intended to provide an...
What is the ‘Wash Sale Rule’?

What is the ‘Wash Sale Rule’?

As defined in Investopedia.com, the wash sale rule is an Internal Revenue Service (IRS) rule that prohibits a taxpayer from claiming a loss on the sale or trade of a security in a wash sale. The rule defines a wash sale as one that occurs when an individual sells or...
When is Trading an Art and Not a Science?

When is Trading an Art and Not a Science?

Several years ago I recall a question that someone wrote to the CBOE's “CBOE – Ask the Institute”, asking if there was a scientific way to manage iron condors, or any type of credit spread. They noted that from their observation, some used the Greeks...