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implied volatility Archives - Options Trading Strategies for Consistent Income - OptionPundit

Don’t Trade Apple Earnings Without Reading This First

By | Implied Volatility, Investment Strategy, Option Trading | No Comments

Apple Inc. (AAPL), the biggest publicly listed company on the planet is about to announce earnings on Apr 24th, after markets are closed. It is estimated that nearly 200+ Hedge funds have AAPL shares in their portfolio. And it is one of the most commonly talked about stock on almost every main stream financial media, website, forums, blogs, etc. Here are some of the interesting things you may want to know before you go for that option trading strategy. Since the last quarter earnings announcement, AAPL stock is up roughly 40% as of now (@$586 current market price). During this…

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OptionPundit Interview: Author and Investor Jeff Augen

By | Interviews, Investment Strategy, Option Trading | 5 Comments

Jeff Augen, currently a private investor and writer, has spent more than a decade building a unique intellectual property portfolio of algorithms and software for technical analysis of derivatives prices. His work includes more than one million lines of computer code reflecting powerful new strategies for trading equity, index, and futures options.  He is author of The Volatility Edge in Options Trading, The Option Trader’s Workbook, Trading Options at Expirations, Day Trading Options, and Bioinformatics in the Post-Genomic Era (Addison-Wesley, 2004). Much of his current work on options pricing is built on algorithms for predicting molecular structures that he developed…

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How Implied Volatility Can Make Money, A Lot of It

By | Implied Volatility, Option Greeks, Option Trading, Option Trading Strategy | One Comment

The most powerful force is an “invisible” one; because you can always prepare for the visible forces but the one that can cause most gain or pain is the one that you can’t see. Implied volatility is one such force when trading financial markets. I introduced Ms Vega as personification for Implied Volatility. Depending upon which side are you at, Ms Vega can either bring lot of money to your portfolio or can easily make you cry. Those who don’t know about implied volatility, pls click here to know more about it. It is a commonly known fact amongst options…

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Ms Vega is Here to Stay

By | General, Option Trading | 3 Comments

Pls allow me introduce you to Ms Vega. Ms Vega is my personification for Implied Volatility.  As of this writing, there is almost 3% IV difference for SPY ATM options, VIX is at 24, VIX Oct futures are at 30, a 25% difference!! Though nothing is certain in the markets, this skew does indicate that market participants are “unusually uncertain”. Stock markets are an interesting place as Market participants tend to have a short memory. With a few percent market rally, bears turn into bull and vice versa and most often the reason is “when the facts change, I change…

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A Record Month OPN (Jun’09) up +14.7%

By | OP Newsletter, Option Trading, Past Performance | One Comment

June 2009 was a record month (2009) for OPNewsletter! Overall June’09 OPN is closed up +14.7% (x- brokerage commissions) and +12.1% (including commissions). We invested almost 60% of 10K assumed capital across various sectors and diversified strategies. All the portfolios were closed positively. Overall an excellent performance that was almost double the OPNewsletter objective of 5-7% per month. Here is an update by individual portfolio- GDX was closed for +5.15% UPS was closed for +8.9% X was closed for +13.85% RUT was closed for +23.08% DIA was closed for +22.89% IWM was closed for +26.07% This doesn’t include returns on…

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OPNewsletter – May’09 (+9.48%), Jun’09 (Open)

By | OP Newsletter, Past Performance, US Market, Worldwide Markets | No Comments

OPNewsletter closed May’09 for +9.48% x-commissions and +6.76% inclusive of commissions. As I stated earlier, after many months of waiting, we crossed our 60% portfolio investment target. It’s always an advantage if the capital was preserved. Yes we did have a few months of low returns, but that preserved capital is an out performance (vs general markets) already and now we can start using this preserved capital for further gains vs. wasting energy in recouping the losses. Just 1 single covered call (X) was more than enough to cover OPN fee  (and triggered no adjustment needs). Sign-up for the OPNWaitlist…

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