Some studies have shown that market crashes are extremely unlikely to occur when the VIX is below 15 or above 50, but that they are likely to occur when the VIX is between 15 to 30; and, though this prescient gauge is driven by investors’ fears (which subject it to the potential of false positives) […]
Options
Follow The Volatility
Similar to the value that comes from “following the money,” it can also be useful to investors to follow the volatility. Watching activity in the Options market can often yield valuable information; and, to do so, we can look to an indicator known as Implied Volatility (IV). Essentially, IV “implies” that a stock’s price will […]
Using A Firefighter’s Approach To Making Money
Have you ever noticed that whenever and wherever a fire erupts most people head in the other direction while firefighters rush toward the fire (God bless ’em)? They know that whatever fear they may have inside themselves must be cast aside in order to save lives. Well, in a similar manner, the same can be […]
Baby Options
Recently, new mini options contracts began trading on five of the largest, listed securities: Apple (AAPL), Amazon (AMZN), Google (GOOG) SPDR Gold Shares (GLD) and the SPDR S&P 500 ETF (SPY). As opposed to their larger parents, which represent 100 shares of the underlying securities, these new offspring cover only ten shares of the underlying […]
Just Plain Monkey-business (JPM)
Recently, a congressional committee charged top officials at JPMorgan Chase & Co. (JPM) with misleading investors, regulators and the public at large when they attempted to mask more than $6 billion in losses, which were brought about by souring trades made by the company’s “London Whale” (too bad there were no whale watchers within the […]
Also posted in Articles | Tagged Calls, JPM, JPMorgan, Options, Protective Collar, Puts | Leave a comment
Mini Options
On March 18, 2013 Mini Options will begin trading on many exchanges. The new Mini contracts will represent 10 shares of an underlying security, rather than the 100 shares standard options contracts normally cover. Strike prices will be at the same price levels as standard contracts, and the minimum price variation for bids and offers […]
Also posted in Articles | Tagged Investments, Investor, Mini, Minis, Options, Trader, Trading | Leave a comment
Leverage
Whether we realize it or not, from the time we are little we make use of leverage. In the simplest of terms leverage is defined as: noun lev·er·age 1. the action of a lever, a rigid bar that pivots about one point and that is used to move an object at a second point by […]
Also posted in Articles | Tagged Investing, Investments, JNJ, Johnson & Johnson, Leverage, Stocks, Trader, Trading | Leave a comment
Collars
Taking our options trades one step further, another one of the options strategies I use quite often is the Collar. With a Collar a Call is sold against shares that are owned (or purchased at the time of the trade) and, with the premium dollars taken in from sale of the Call, a lower strike […]
