Stop, Stop Limit, Trailing Stop and OCO orders can be used across just about any asset class. They are similar in nature but with some very important nuances. Click the video below as we discuss these types of orders. Grab a free day pass to one of our live signal trading rooms today>>http://bit.ly/nl-freepass Follow me […]
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Option margin is the cash or securities an investor must deposit in his account as collateral before writing – or selling – options. Margin requirements are established by the Federal Reserve Board in Regulation T. Option margin differs from other types of margin that you may associate with stock or futures trading. These types of margin allow a trader to employ leverage in […]
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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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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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One of the things you will hear me harp over and over again is to mitigate and manage risk. What if you are trading in the room but have to run off to a meeting? I cannot promise that this is fail-proof, but there is a solution. You can place a limit entry order and […]
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The biggest indicator for the success of a trader in all of my years of training clerks, junior traders, senior traders, and my current students is this. Their inability or unwillingness to realize a loss and to manage their risk responsibly. Here is a very straightforward lesson on how to do that. The rest is […]
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The bid price of any security is the highest price that someone is willing to pay for that security. The ask price of any security is the lowest price that someone is willing to sell that security. The “theo”, “mark” or “mid” price is simply the bid plus the offer divided by two. Click the […]
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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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When I talk to new (and even some veteran) traders when they are struggling with their trading, invariably one of the issues that they have is allocation. Options traders should not characterize themselves as a “5 lot trader” or a “10 lot trader” as a futures trader may. Futures traders typically manage their risk by […]
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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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