Cash dividends affect option prices through their effect on the underlying stock price. Because the stock price is expected to drop by the amount of the dividend on the ex-dividend date, high cash dividends imply lower call premiums and higher put premiums. Click the video below to see the full analysis. Grab a free day […]
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We presently have an iron condor signal on in Tesla Inc. (Ticker: TSLA). Click the video below as we discuss our current signal, define and manage the risk and apply them in our trading methodology. Follow me on Twitter @CboeSib
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Implied volatility is a parameter that is part of an option pricing model, typically some derivation of the Black-Scholes model, which gives the theoretical price of an option. Implied volatility shows how the marketplace views where volatility should be in the future. Since implied volatility is forward-looking, it helps us gauge the sentiment or expectation […]
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There are many types of option orders, but there are two special ones available on the ThinkOrSwim platform. Click the video below as I explain what these order types are and step-by-step how to execute them. Grab a free day pass to one of our live signal trading rooms today>>http://bit.ly/nl-freepass Follow me on Twitter: @MikeShorrCBOT
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Many traders look at their win to loss rate when evaluating their trading. This is an important concept, if you are right way more than you are wrong, you probably are not going to enjoy much success. But, many are missing one part of the puzzle, expected value. Not only IF you are right or […]
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Delta measures the degree to which an option is exposed to shifts in the price of the underlying asset (i.e. stock) or commodity (i.e. futures contract). Values range from 1.0 to –1.0 (or 100 to –100, depending on the convention employed). Follow me on Twitter @MikeShorrCbot
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The VIX and VXX are both very popular trading vehicles for trading volatility. But, unlike the perceptions of many traders, they are not exactly interchangeable. There are many similarities and more importantly, some very important differences. First, the similarities: Both are based on S&P 500 volatility futures Both will show a strong reversion to a […]
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For anyone who has traded Crude Oil, you can attest to the fact that is no place for the novice nor the meek. Throw in the very real possibility of military action in the Middle East and you have just added fuel to the potential fire. Click the video below as Scott walks us through […]
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We discuss tirelessly about risk during the trading day. Risk is not something to avoid, but manage. Some risk management is pretty straightforward like when dealing with vertical spreads. Other types of spreads, like calendar spreads require a bit more work and a few more tools. Click the video below as I walk us through […]
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Easing Into 2020 AAAHHH! As we ease ever so gently into 2020 (note the sarcasm), it gives us no lack of topics to discuss for the week. Here’s a brief “Pre”-Cap: 1. Oil is back on the front burner. Oil prices spiked on Friday after the U.S. killed a leading Iranian military commander […]
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