Today has been quite a trading session with risk assets rocketing higher after Mario Draghi of the European Central Bank reiterated what has already been stated. The S&P 500 Index (SPX) is posting some nice gains, but price has not taken out the recent ascending trendline illustrated in the daily chart of SPX shown below. Until that [...]
SP500, Russell 2K, Dollar Index and Gold’s – Fake out or Shakeout
Filed Under: Options Trading Newsletter, Traders Buzz Tagged With: Option Trading, Options Alerts, Options Newsletter, Trading Options
The Passage of Time Leads to Profitability for Option Traders
My most recent missive discussed some of the nuances of the options Greek, Delta which deals with the change in option price with regard to changes in price of the underlying. Today I would like to examine some of the practical details surrounding the second of the primal forces describing the behavior of options with [...]
Filed Under: blog, Option Trade Structure, Options Trading Newsletter, Recent Options Trade
Option Greeks: Diving into Delta
July 9, 2012 by J.W. Jones
Options can be terribly confusing for the trader first encountering them. One of the most confusing concepts to understand is the interplay of the three primal forces of options- price of the underlying asset, time to expiration, and implied volatility. The impact of each of these three factors on any given option position can be [...]
Understanding Implied Volatility When Trading Options – Part 1
June 11, 2012 by J.W. Jones
We have recently discussed the importance of routinely considering the value of implied volatility in a historical perspective for each underlying before considering any of the various option positions potentially appropriate for trading a given underlying security, index, or ETF. Failure to consider this data represents a major cause of the failure of otherwise favorable [...]
A Different Approach to Apple Using Options
May 18, 2012 by J.W. Jones
Apple (AAPL) is one of the most actively traded stocks currently. For the trader who trades only stock, there are two major difficulties in executing trades in this stock: 1. It is breathtakingly expensive. 2. It exhibits periods of neck snapping volatility exposing the trader to substantial losses if he gauges the direction wrong and [...]
The Dollar & Gold Have Eyes on Europe
May 5, 2012 by J.W. Jones
Friday saw heavy selling pressure coming into risk assets, specifically equities and oil. However, the real driving force behind the selling pressure is likely the result of several unrelated economic/geopolitical events. Clearly the unemployment report had an impact on price action, but strangely enough it would appear to those more in tune with reality that [...]
Filed Under: blog, Currency Trading, Options Trading Newsletter, Recent Options Trade, US Dollar Trading Tagged With: gold trading
Why the U.S. Dollar is Critical for the S&P 500 Index this Week
April 29, 2012 by J.W. Jones
Unfortunately I was sick the past few weeks and I am just now getting back into the swing of things. Similar to the demand pull that the warmer than usual spring has had on macroeconomic data, the warmer spring caused me to have an earlier than usual sinus infection as well as some horrific allergies. [...]
Filed Under: blog, Options Trading Newsletter
Gold Prices Are Set for Further Decline
April 9, 2012 by J.W. Jones
In the not-so-distant past arguing that precious metals prices were setup to fall generally elicited a response which was not real pleasant. In fact, during gold’s infamous bull market rally on several occasions I called for pullbacks which regardless of the accuracy of my call generated hate mail that seemingly never ended. Fast forward to [...]
Option Trading: A Basic Explanation of Debit Spreads
March 29, 2012 by J.W. Jones
Welcome back to the world of options. My reality exists in three dimensions and far more combinations of potential positions than does the one-dimensional world of the stock trader. The view from my turret is ruled by the three primal forces of options — time to expiration, price of the underlying, and implied volatility. Consider [...]
The Fed, Gold, the S&P 500, & the Retail Mindset
March 24, 2012 by J.W. Jones
“And if you look away, you’ll be doing what they say. And if you look alive, you’ll be singled out and tried. If you take home anything, let it be your will to think. The more cynical you become, the better off you’ll be. Something to believe in.” ~ The Offspring, Something to Believe In [...]
Filed Under: blog, Options Trading Newsletter, trade ideas Tagged With: Credit Spread Trading, How to trade Credit Spreads, Option Credit Spreads, Trade Credit Spreads
