option trading

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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How High Netflix (NFLX) will Go?

By | Technical Analysis, Trade Ideas | 3 Comments

Netflix (NFLX) has been a shining star and shorts have been pushed against the wall time and again. After lingering between $20-$40 for several years, NFLX has gone from $50 to $200 YTD alone, in a 45degree straight line. See attached chart for YTD performance- After watching it for sometime, I am amazed by the wonderful performance of NFLX. 300% in a year! If there was anything like “recession proof investment” then I think NFLX will rank amongst the top.  The ride wasn’t a smooth sailing though as there were pull backs good enough to throw the weakest of the…

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How to Trade Japanese Yen via Options

By | Forex Options, Trade Ideas | 8 Comments

Forex market is a big market providing round the clock trading as well as huge leverage. Leverage is a double edge sword. If you are not hedging properly, then forex trading could also mean a ticket to emptying your trading account quickly. So if you want to trade forex but still want to limit your risk exposure without gluing to screen, Forex options can offer a good alternative to trading FX spot. Japenese Yen is currently trading at 15 year low levels. A strong yen hurts Japan which is a export driven economy. Part of the reason why it is…

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Opportunities Abound, Either Way

By | Option Greeks, Option Trading, Weekly Options | No Comments

For the past few days, Markets have shown amazing resilience to make a comeback from triple digit losses (I am referring to Dow) netting out no significant change. But one thing is for sure, intraday moves are becoming larger.  So pls start to pay close attention to market internals. I don’t know which direction markets are headed, but what I sense is a nervousness on the part of market participants. Neither bull nor the bears want to take any strong position. As I mentioned earlier, Ms Vega is here to stay for while and it’s better that I start to…

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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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OPNewsletter Jul 2010 Up +8.3%

By | Butterfly spread, Calendar spread, Double Diagonal, Iron Condor, OP Newsletter, Option Trading, Option Trading Strategy, Past Performance, US Market | No Comments

We are on track for our 28th positive month of OPNewsletter phase-2, as of last Friday close OPNewsletter Jul 2010 portfolio is up +8.3% on the maximum investment of almost 60% of portfolio capital. We have started opening Aug 2010 portfolios and our first portfolio is already positive. Let’s talk consistency first, especially on trades like Iron condor which is probably the most widely used option trading strategy. OPNewsletter has lost only 1 month of RUT iron condor since May 2008, and the drawdown was only 7.15% while gains have been around 12% on average per month. RUT Iron Condor for…

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