Clinging on to Fundamental Analysis and stock picking software, only keeps you stuck in trading equities. Trading this way, compounds concentration risk in one asset class and fails to adequately diversify risks across Equities, Bonds, Currencies and Commodities. Thereâs much more to stock option trading, than stock itself.I cite Benjamin F. Kingâs study, quoted repeatedly [...]
Contrast these 2 days. 29 Sep, 2008: Dow down -7.50%, Nasdaq down -10.06% and S&P 500 down -9.63%. Versus 13 Nov, 2008: Dow up +6.25%, Nasdaq up +6.11% and S&P 500 up +6.47%. Many retail option traders would have rushed to get their spreads filled on such big days, either to get short or long. [...]
The Reward of Profit and the Risk of Losses for retail option trading needs to be managed at 2 related levels of performance: Portfolio and Trade Specific.At the Portfolio level for online options trading, there are 3 types of Targets that must be set, even before you trade.Maximum Return Target: complete achievement of the âidealâ [...]
We have seen it way too often, haven’t we?
Advertisements that tout making thousands of percents in profits within days and millionaires made within weeks, all by option trading! Such advertisements usually draw hordes of hungry, indebted gamblers who need that “one big win” to recover their debts or losses elsewhere to their unusually expensive [...]
Options Trading has a reputation for being extremely risky, but this reputation is in large part undeserved. True, option trades are extremely risky – even dangerous if you have no idea what you are doing. However, that is true of all forms of offline or online trading, and trading in options is no exception.
While options [...]
There are two types of options available: call options and put options.
Call options give the taker the right but not the obligation to buy the shares at a specific price on or before a specific date.
The put options give the taker the right but not the obligation to sell the shares at a specific price [...]
The concept of Stock option trading was introduced in the 1970’s, and it became popular in 1980’s. However the market losses of 1990 caused a stop in this type of trading, the recent concept of electronic trading (online trading) made them again popular to the public.
Stock options are options, which use stocks as the [...]
Just as elite athletes go through a specific warm-up routine for their body and their mind before competing at a meet, we too as option traders need to follow a specific routine/process before we enter a trade and compete in the markets.
Here is the step-by-step routine that I follow each market day when looking [...]
I make a living out of trading options…and a pretty good one at that!
For a long time I couldn’t say those words as I struggled just to hold on to my capital, let alone make it grow.
Though there were several reasons why I struggled (including being grossly undercapitalized and at the same [...]