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  • VIX Isn’t The Only Way To Measure Volatility

    VIX Isn’t The Only Way To Measure Volatility

    VIX Isn’t The Only Way To Measure Volatility Volatility is one of my favorite subjects to write about.  Regular readers know I like to talk a lot about the VIX and option volatility.  As an options trader, you can’t understate the importance of volatility. Of course, overall market volatility is most commonly followed by watching […]

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    | February 27, 2015 | 0 Comments

Call Or Put Options?

Buying A Call Option On First Solar (FSLR)

Buying A Call Option On First Solar (FSLR)

Buying A Call Option On First Solar (FSLR) Solar power can be an intriguing industry for investors.  In some ways, it’s investing in technology.  In other ways, it’s like buying a utility.  The main thing to realize is we’re well past the days where solar power is developmental. For the most part, the small players […]

Buying A Call Option on Rackspace Hosting (RAX)

Buying A Call Option on Rackspace Hosting (RAX)

Buying A Call Option On Rackspace Hosting (RAX) While cloud computing is still a word which generates a fair amount of buzz, in reality it’s already a mature market.  Cloud technology is already being utilized by most companies who have an online presence. In fact, any company with an Internet site not using cloud computing […]

Buying A Call Option On Tesla Motors (TSLA)

Buying A Call Option On Tesla Motors (TSLA)

Buying A Call Option On Tesla Motors (TSLA) Earnings season may be wrapping up, but that doesn’t mean there aren’t opportunities to be found.  Some big companies released earnings this week, and as is typical, there was a fair amount of overreaction (or under-reaction in some cases). Keep in mind, much of what a stock […]

Buying A Call Option on Microsoft (MSFT)

Buying A Call Option on Microsoft (MSFT)

After a disappointing earnings report, now is a good time for traders to look at buying a call option on Microsoft (MSFT).

Buying A Call Option on FXCM (FXCM).

Buying A Call Option on FXCM (FXCM).

After the Swiss Franc debacle, now is a good time for traders to look at buying a call option on FXCM (FXCM).

Buying A Call Option on Alcoa (AA)

Buying A Call Option on Alcoa (AA)

With earnings season officially underway, now is a good time for traders to look at buying a call option on Alcoa (AA).

Unusual Options Trading Activity

Unusual Options Activity In eBay (EBAY)

Unusual Options Activity In eBay (EBAY)

Unusual Options Activity In eBay (EBAY) As many of you know, unusual options activity can be a valuable indicator as to what traders are thinking, and more importantly, where these stocks are heading in the short-term. This is something professional options traders pay a lot of attention to, and for good reason…  Unusual options activity can “tip […]

Unusual Options Activity In Under Armour (UA)

Unusual Options Activity In Under Armour (UA)

Unusual Options Activity In Under Armour (UA)  As many of you know, unusual options activity can be a valuable indicator as to what traders are thinking, and more importantly, where these stocks are heading in the short-term. This is something professional options traders pay a lot of attention to, and for good reason…  Unusual options activity can […]

Unusual Options Activity In SPDR Gold Shares ETF (GLD)

Unusual Options Activity In SPDR Gold Shares ETF (GLD)

Recently, there has been some unusual options activity in SPDR Gold Shares ETF (GLD). As many of you know, unusual options activity can be a valuable indicator as to what traders are thinking, and more importantly, where these stocks are heading in the short-term.

Unusual Options Activity in iShares MSCI Germany ETF (EWG)

Unusual Options Activity in iShares MSCI Germany ETF (EWG)

Recently, there has been some unusual options activity in iShares MSCI Germany ETF (EWG). As many of you know, unusual options activity can be a valuable indicator as to what traders are thinking, and more importantly, where these stocks are heading in the short-term.

Unusual Options Activity In United Continental (UAL)

Unusual Options Activity In United Continental (UAL)

Recently, there has been some unusual options activity in United Continental (UAL). As many of you know, unusual options activity can be a valuable indicator as to what traders are thinking, and more importantly, where these stocks are heading in the short-term.

Unusual Options Activity In Barrick Gold (ABX)

Unusual Options Activity In Barrick Gold (ABX)

Recently, there has been some unusual options activity in Barrick Gold (ABX).

Breaking News

The Best Way To Trade The Energy Sector

The Best Way To Trade The Energy Sector

Crude oil has crashed and it’s taken the entire energy sector with it. The price of a barrel of crude has gone from $105 to $55 in about six months, a 48% decline. That’s officially a crash. Meanwhile, the energy sector has dropped roughly 20% overall during that period. However, the collateral damage has been […]

The Price Of Oil Keeps Plunging… Now What?

The Price Of Oil Keeps Plunging… Now What?

A few weeks ago, I talked about possible oil trading strategies. At the time, oil was down to $75 a barrel, and it seemed cheap. Since then, oil has plummeted all the way to $65 a barrel, and it may even fall to $60 before all is said and done. Back then, my advice was […]

Trading Options Outside The Box

Trading Options Outside The Box

Part of the challenge in making money trading options (or just in the financial markets in general) is the zero-sum game factor. That is, for every winning trade, there’s someone on the other side losing money. The problem is retail traders have to go up against huge trading firms and banks with endless resources. The […]

How The Heck Do You Trade Oil?

How The Heck Do You Trade Oil?

One of the biggest surprises in the financial markets in 2014 has been the collapse of crude oil prices. In mid-June, West Texas Crude was trading at over $105 a barrel. Barely five months later, the price has dropped below $75. Oil hasn’t been this cheap since 2010. The mind-boggling plunge has caught many investors […]

Two Years Of Gridlock?

Two Years Of Gridlock?

The big news to kick off November is neither economic nor international for a change, it’s political. The Republicans had an impressive showing at the polls, with the GOP taking control of Congress starting in 2015. Although the outcome was basically expected, it’s the first time in eight years Republicans will have the majority in […]

How To Profit Off Of Bad Earnings

How To Profit Off Of Bad Earnings

It’s earning season, so you know what that means… lots of big moves in individual equities. And this time around, there’s added volatility in the market due to the recent selloff. It seems like earnings misses are causing larger than normal downward gaps. As options traders, we know big moves can be very good if […]

Volatility Watch

VIX Isn’t The Only Way To Measure Volatility

VIX Isn’t The Only Way To Measure Volatility

VIX Isn’t The Only Way To Measure Volatility Volatility is one of my favorite subjects to write about.  Regular readers know I like to talk a lot about the VIX and option volatility.  As an options trader, you can’t understate the importance of volatility. Of course, overall market volatility is most commonly followed by watching […]

Is This VIX Trade As Important As It Seems?

Is This VIX Trade As Important As It Seems?

Is This VIX Trade As Important As It Seems? Regular readers know I like to talk a lot about the VIX and option volatility. As an options trader, you can’t understate the importance of volatility. It’s one of the primary ingredients in the price of an options contract. Perhaps more importantly, volatility levels can give […]

What’s The Deal With This Massive VIX Trade?

What’s The Deal With This Massive VIX Trade?

The biggest VIX trade you may ever see occurred recently. What’s it telling us?

What’s This Big VXX Trade Telling Us?

What’s This Big VXX Trade Telling Us?

A large VXX options trade suggests volatility could be capped by the end of next month.

What’s With The Huge Options Trade In VXX?

What’s With The Huge Options Trade In VXX?

A huge VXX options trade suggests volatility could be headed back down by next month.

What’s Up With Volatility?

What’s Up With Volatility?

With just a couple weeks to go before the end of 2014, volatility has returned to the financial markets. We couldn’t quite make it through the rest of the year without one more bout of investor fear. The VIX has climbed above 20 for only the third time this year. And while that’s not a […]

Options Trading Strategies

Using The Option Straddle

Using The Option Straddle

Using The Option Straddle Every earnings season I get questions about what option strategy to use. I hear things like, “What’s the best strategy to use to play earnings?” or “How do I use options to make money on earnings?” With options, there are always several right answers. However, for new traders, I usually recommend […]

Should You Be Trading VXX?

Should You Be Trading VXX?

One of the primary themes I like to discuss on this site is volatility. After all, you shouldn’t be trading options if you don’t at least have a basic understanding of why volatility is important to the financial markets.

Reverse Iron Butterfly Spread

Reverse Iron Butterfly Spread

The reverse iron butterfly spread is a complex, debit spread strategy which benefits from movement in the underlying instrument.  It’s similar in concept to a short butterfly spread, except it’s a debit spread.  A trader profits from a reverse iron butterfly spread when the underlying stock rallies or sells off. A reverse iron butterfly spread […]

Short Condor Spread

Short Condor Spread

The short condor spread is a complex credit spread strategy which benefits from movement in the underlying instrument.  A trader profits from a short condor spread when the underlying stock rallies or sells off. A short condor spread is made up of four options trades at once.  It can be done with either all calls […]

Short Straddle

Short Straddle

A Short Straddle is a neutral options strategy which produces a profit when the underlying stock doesn’t move much up or down.  It’s essentially the opposite of a Long Straddle which profits when the underlying stock makes a big move up or down. So, if you think your stock is going to move sideways for […]

Long Straddle

Long Straddle

A Long Straddle is created by buying both a put and a call with the same terms.  In other words, you buy both a put and a call on the same underlying stock, with the same strike price, and the same expiration date. A straddle purchase allows the buyer to make big potential profits if […]

Options Trading Basics

Making Money With Trend Tracking

Making Money With Trend Tracking

One of the reasons that we created the Option Trading Research tracking system was to identify and track companies that have growth potential.  And to show us where a lot of option buying is coming from.  One such area we used to track before we created this system was companies like the makers of obesity […]

Stock Heading To Zero… What To Do

Stock Heading To Zero… What To Do

Sometimes a stock has been beaten down so much that it seems destined to hit zero. However, even if we are eventually right about the direction, it can be very difficult, if not outright dangerous, to attempt to profit from this type of situation before the company goes bust. Why, what’s the risk? One of […]

A Professional Way To Measure A Stock

A Professional Way To Measure A Stock

Lately I hear a lot of people talking about value investing, but see very few actually practicing it. Here’s the kicker… Once your asset base reaches a certain level, I believe that it’s almost impossible to manage this style effectively. Therefore, I’ve been working diligently to further automate my research process. It seems that yellow […]

No More Vacation For Traders

No More Vacation For Traders

Every man who possibly can should force himself to a holiday of a full month in a year, whether he feels like taking it or not. –William James It seems that the vacation season is having little impact on the market this summer.   I can say this with confidence because the S&P 500 continues to […]

Don’t Think About It Too Much

Don’t Think About It Too Much

“The Gods Must Be Crazy” is a great 1980’s film that contrasts the frenzy of modern existence with the calm of African tribal life.  In one of its very first scenes, a woman turns to the main character and asks, “Does the noise in my head bother you?” The point, of course, is that some […]

Putting Bonds On Warning?

Putting Bonds On Warning?

There’s no question that the market continues a tight tug of war between risk aversion and risk appetite. On one hand, the bulls stress the value of equities and oppose the extreme levels of negativity toward them.  By almost every measure, they’re cheap relative to the alternatives. On the other hand, we’ve all heard the […]