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    July 27, 2020

    Option Gamma

    Gamma is the rate of change for an option’s delta based on a single-point move in the delta’s price. Gamma is at its highest when an option is at the money and is at its lowest when it is further away from the money. Click the video below to get more detail. Grab a free day pass to one of our live […]

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    July 27, 2020

    What Do You Mean by “Scalping Gamma”?

    “Gamma Scalping” is a concept that retail options traders should know about, but frankly will rarely, if ever, use.  Not because it is a bad idea, but because it is capital intensive and it’s necessary to own the underlying asset. “Gamma Scalping” involves the process of scalping in and out of a stock or futures […]

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    July 27, 2020

    Option Delta and Theta

    Option Delta measures the degree to which an option is exposed to shifts in the price of the underlying asset (i.e., a stock) or commodity (i.e., a futures contract). Values range from 1.0 to –1.0 (or 100 to –100, depending on the convention employed). Option Theta refers to the rate of decline in the value of an option over time. […]

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    June 10, 2020

    The Difference Between Implied and Historical Volatilities

    In contrast to historical volatility (HV), which looks at actual asset prices in the past, implied volatility (IV) looks ahead. … Implied volatility can be derived from the price of an option. Specifically, implied volatility is the expected future volatility of the stock that is implied by the price of the stock’s options Click the video below to see how we dive into this important aspect […]

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    June 9, 2020

    The Difference Between Implied Volatility and Vega

    Implied Volatility (IV) and Vega are very much related but are by no means the same thing. Implied volatility has no direct correlation to actual past historical or statistical volatility; rather it is a measure of predicted future movement. Implied volatility tends to increase when there is uncertainty or anticipated news, while it tends to […]

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    June 9, 2020

    What Is the PFE and How Do We Use It in Our Trading Methodologies

    The Polarized Fractal Efficiency (PFE) is a technical indicator that was developed by Hans Hannula to determine price efficiency over a user-defined period. This indicator fluctuates between -100 and +100, with 0 as the centerline. Securities with a PFE greater than zero are deemed to be trending up, while a reading of less than zero indicates […]

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    June 2, 2020

    Why We Manage Risk the Way That We Do

    Shares of Ulta Beauty tanked more than 20% after the company reported earnings after the bell Thursday that missed analysts’ expectations and slashed its outlook for the fiscal year. The company said that the cosmetics industry has struggled as a whole this cycle, because there haven’t been innovative beauty routines that drive consumers to purchase products as […]

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    June 2, 2020

    What Is A Confidence Interval?

    We talk a lot about price distributions, standard deviations, confidence intervals, etc. in our rooms. What are we talking about? We throw these terms around like it’s “2+2=4” and that is not fair. Here is what we are talking aboutFor example, a 95% confidence interval is a range of values that you can be 95% […]

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    May 28, 2020

    Ever hear of a Stop Close Order? 

    Most traders know what a stop order is whether they use them or not. Ask your average trader about a “stop on close” and you may get some head-scratching. It’s not too difficult to understand. It’s a stop that is favored by swing traders where you don’t have a market/limit stop order placed at a […]

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    May 21, 2020

    What Is the PFE and How Do We Use It in Our Trading Methodologies

    The Polarized Fractal Efficiency (PFE) is a technical indicator that was developed by Hans Hannula to determine price efficiency over a user-defined period. This indicator fluctuates between -100 and +100, with 0 as the centerline. Securities with a PFE greater than zero are deemed to be trending up, while a reading of less than zero indicates […]

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