A diagonal spread is an options strategy established by simultaneously entering into a long and short position in two options of the same type (two call options or two put options) but with different strike prices and different expiration dates. Click the video below to see the differences between a diagonal spread and a calendar spread. Follow […]
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The leverage that options afford a trader is one of the cornerstones of the options methodology we employ here in our options rooms at Prosper Academy. Click the video below to see us in action! Follow me on Twitter @MikeShorrCbot
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Buying a put or selling a call follow the same general profit profiles. In both cases, it is ideal for the underlying stock to go down in price. But, there are very distinct differences in their risks. Click the video below to find out these important factors. Follow me on Twitter @CboeSib
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Gamma is a risk parameter used in options pricing. It is the speed at which delta changes as the underlying asset moves up or down. But how can that affect one’s options position? Click the video below to find out. 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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The CME FedWatch Tool analyzes the probability of FOMC rate moves for upcoming meetings. Using 30-Day Fed Fund futures pricing data, which have long been relied upon to express the market’s views on the likelihood of changes in U.S. monetary policy, the tool visualizes both current and historical probabilities of various FOMC rate change outcomes […]
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The standard deviation formula is very simple: it is the square root of the variance. It is the most commonly used measure of spread. An important attribute of the standard deviation as a measure of spread is that if the mean and standard deviation of a normal distribution are known, it is possible to compute the percentile rank […]
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You may have heard of the terms simple and compound accruals. What does it mean and how is it important to one’s trading account? Click the video below as I explain both of these concepts and how to apply them to your trading and risk methodologies. Follow me on Twitter @MikeShorrCBOT
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Initial Public Offerings (IPO’s) always create a buzz in the markets. Investors, financial news networks, etc. love to report on these. It’s like welcoming a new baby to the family. Just in the last month, look at the coverage that UBER (Ticker: UBER) and Beyond Meat (Ticker: BYND) have garnered. A common question we get […]
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The Fed is again at the forefront of investor’s attention. After a decade of trying to right the ship, through various programs, we find ourselves again at an economic crossroads. Do they continue with their dovish stance on monetary policy, simply stay the course or even ramp things up by cutting rates? In order to […]
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