Remember, we trade in the world of probabilities not possibilities. It is important to be reasonable with your expectations when talking about a directional play in stocks using options. What is reasonable. How is one to know? Click the video below to learn more about how to calculate the expected move in a stock. Follow […]
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In simple terms, IV is determined by the current price of option contracts on a particular stock or future. It is represented as a percentage that indicates the annualized expected one standard deviation range for the stock based on the option prices. For example, an IV of 25% on a $200 stock would represent a […]
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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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It’s quite easy to manage a winning trade. Everyone is a genius when profits are on the board. But, part of trading is dealing with how to manage trades that are not in your favor. This video will explain how to set profit targets as well as stop levels. Follow me on Twitter @MikeShorrCbot
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You have done all of your analysis and have come up with a directional strategy for a stock option trade. Great! A lot of the hard work has been done. But what should your price target be for your spread? In this video, I will show you how using just three simple data inputs will […]
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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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