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 to Trade Fear

By | Implied Volatility, Investment Strategy, Option Trading Strategy, Trade Ideas, US Market | One Comment

So you have been watching this “interesting” stock market. One day down, next day up and in the end you don’t seem to find any “wealth effect” in your stock portfolio. And then there is this marvelous VIX, Uncle Ben’s bullish notes about subdued inflation, bullish economic data and you think everything seems to be going in the right direction. Then you see commodities surging, Gold and Silver making record high almost non-stop while US Dollar tanking. It’s an “interesting” market. VIX is almost at 3 year low and headlines will give one an impression that everything is brilliant, that…

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What Exactly is Option Trading?

By | Butterfly spread, Earnings, Investment Strategy, Option Expiration, Option Trading, Option Trading Strategy, Past Performance, US Market | No Comments

A Fascinating Friday ! That’s how I can think about Market’s action on Friday. Option trading is not only about attending a seminar, do some paper trades, get some winning trades and the stage is set. It is also about constantly evolving your own trading style and continue to sharpen your saw. With this post I hope you pick up one or two important nuggets that might add value to your trading style, so pls just relax and continue to read. First a simple one VIX– I mentioned on April 15, that I was not convinced of rally when markets…

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Panic Before Everyone Else Does

By | Market Psychology, Technical Analysis | One Comment

I have tried my best to warn OP readers of the upcoming storm, over and over again starting from November 2007. Fun fact, this is what I wrote then- But hey, if you do get a bearish market, then don’t forget to mention that you were told first hand here at OptionPundit. We are close to disastrous situation, Yesterday markets closed almost in the range that I highlighted in Nov 18 post. Net, here we are with a bear market signal. Very close to some extremely strong support areas 7,000-7,400 for a bull market that started from 1930s to 2007….

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DOW, S&P, Nasdaq All Up

By | Daily Report | 2 Comments

The Dow increased 4.7% closing at 8979.26, the Nasdaq was up 5.5% to finish at 1717.71, and the S&P was up 4.3% to finish at 946.43. Leading sectors Coal and Consumable Fuels +13.3%, Education Services 13.2%, Steel 13.1%, Oil and Gas Exploration 12.1%, Gas Utilities 11.4%. Gold will surely make it to the lagging sectors. Though the rally came on more than average volume, the up volume wasn’t impressive at all. The new lows also increased. Net net, poor market internals in the face of a “strong” reversal, far short of saying any strong bounce. I earlier mentioned my bias…

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A Terrible, and A Fantastic Week

By | Investment Strategy, OP Forum, OP Newsletter, Option Trading, Past Performance, Trade Ideas, US Market | No Comments

It was a terrible week for U.S. stocks and equally for almost every major stock markets worldwide. The Dow fell 157.47 points, or 1.5%, on Friday to close at 10,325.38, racking up a 7.3% drop for the week. The Nasdaq Composite Index fell 29.33 points, or 1.5%, on Friday to close at 1,947.39 and lost 10.8% for the week. The broader Standard & Poor’s 500 Index dropped 15.05 points, or 1.4%, on Friday, ending the day at 1,099.23. For the week, the index was down 9.4% for the week. But all this shouldn’t come as a major suprise to OPNewsletter subscribers especially…

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