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    August 4, 2020

    TSLA Inside Bar Entry

    An inside bar is just what the name implied.  It is a bar that is “inside” of another bar.  We use a daily chart for this approach.  So the high from two days ago is higher than the high from one day ago and the low of two days ago is lower than the low […]

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    August 3, 2020

    Option Ratio and Backspreads

      A ratio spread is a neutral options strategy in which an investor simultaneously holds an unequal number of long and short or written options. … Conceptually, this is similar to a spread strategy in that there are short and long positions of the same options type (put or call) on the same underlying asset.   A backspread is s a type of option trading plan in which […]

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    July 29, 2020

    Is JPM Morgan Poised For Its Next Leg Up?

      We believe that some banks are in a position to make the next leg up?  Why? You ask.  Unlike your conventional banks, some banks like Goldman Sachs, JP Morgan, Citibank and, Morgan Stanley have resources that many conventional banks do not.  They have MASSIVE trading entities.  They are not simply a place to park […]

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    July 28, 2020

    Vega and Order Flow

    Vega is the measurement of an option’s price sensitivity to changes in the volatility of the underlying asset. Vega represents the amount that an option contract’s price changes in reaction to a 1% change in the implied volatility of the underlying asset. We also discuss order flow and how it can affect implied volatility and the balance of supply and demand. Click […]

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    July 28, 2020

    A Look into Option Open Interest and Volume

    Open interest is a concept that is unique to options.  Volume is a parallel concept to stocks.  First, what are they?  Second, why should an options trader care about them? Open interest is the number of active contracts. It is a metric that can be tracked or displayed on most options trading platforms, like bid […]

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    July 28, 2020

    A Synthetic Approach To Options

    A call is an option that gives the buyer the right, not the obligation, to buy an underlying asset at a certain point in time at a certain price.  A put option gives the buyer the right, not the obligation, to sell an underlying asset at a certain point in time at a certain price.  […]

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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

    What is Option Put-Call Parity?

    Put–call parity defines a relationship between the price of a European call option and European put option, both with the identical strike price and expiry, namely that a portfolio of a long call option and a short put option is equivalent to (and hence has the same value as) a single forward contract at this strike price and expiry. This is […]

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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 10, 2020

    Helping You Understand Option Gamma

    An option’s gamma is a measure of the rate of change of its delta. The gamma of an option reflects the change in the delta in response to a one-point movement of the underlying stock price. Like the delta, the gamma is not a static measure.  It is constantly changing, even with tiny movements of the […]

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