One of the primary drivers of an option’s value is implied volatility, or IV. Just as with a stock, the goal might be to buy low and sell high, as it’s usually with options. But that’s not always the case. Buying…
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A so-called smart money indicator can be a tip off to what side of the market insiders are positioning. Market action for options can be used to predict future market direction. Put options are used to hedge or speculate on downward…
You’re probably buying puts because you want to mitigate risk or hedge a long position. Sure, it might make sense most of the time, but there are certain market scenarios where it just doesn’t make sense. So if you find…
The first Friday of the month brings with it one of the most highly anticipated economic reports for the month: the U.S. Department of Labor’s Non-Farm Payrolls report. This report has the potential to move markets, and can drive significant…
When it comes to playing earnings-based volatility, traders and investors have numerous strategies to choose from. Traders can sell naked options, trade breakouts in the stock by buying or selling shares or use limited-risk strategies to capture potentially over-inflated option…
While long options positions may have limited risk and unlimited profit potential, they do also have some serious drawbacks. For example, a long call position can be decimated quickly through adverse market movement or the passage of time. Many inexperienced options…
A stock is only worth what someone is willing to pay. Prices can always get cheaper, even for free falling stocks that you think will have value at some point. Let’s take a look at Twitter. Their stock has fallen from it $75 peak…
Portfolio puts are now in high demand even though markets were within striking distance of all time highs in the last few weeks. This preparation for a downturn can be viewed as a bullish contrarian indicator. Truth be told, the masses…
