Book Reviews, Flex Factor, Options Theory, Spread Trading Technique, Tactical Trading, Volatility Trading
To celebrate the New Year, the SpreadHunter Team is offering our non-definitive, entirely subjective and very opinionated list of the 10 Best Options Trading Books to Buy in 2016. Caveat Emptor: The written word does not always translate well to the the domain of...
Flex Factor, Options Theory, Spread Trading Technique, Tactical Trading, Volatility Trading
The cornerstone of Modern Portfolio Theory is that Volatility Equals Risk. A similar concept exists in Pre-Modern Investment Theory: Safety Through Diversity. In the Pre-Modern example, diversification of assets leads to lower volatility by diluting outliers in the...
Options Theory, Spread Trading Technique, Tactical Trading, Volatility Trading
Capturing volatility spikes and declines is a high risk game. The most direct way to speculate on the direction of volatility is to go long or short a volatility instrument such as the VIX futures contracts or its exchange traded derivatives such as VXX, SVXY, XIV...
Options Theory, Spread Trading Technique, Tactical Trading, Volatility Trading
One of the most common ways that options traders lose money is a sudden, unexpected drop in historic or implied volatility. When this happens, strategies that once made money start losing money. And at the same time, risk from unforeseen “Black Swan”...
Options Theory, Spread Trading Technique, Tactical Trading
From time to time, options spread traders need to trade high delta instruments. Whether it is a tactical trade to capture a sharp move in the underlying, or a last minute defense at expiration, the way a trader buys or sells large deltas contributes greatly to the...
Options Theory, Spread Trading Technique
Beginning sometime in 1955, our value standards and the market parted company, and the gap has tended to widen throughout the ensuing years. Graham, Dodd, Cottle, and Tathum, Security Analysis (New York, McGraw Hill, 1962) The gap between the conservative outlook of...
Flex Factor, Options Theory, Spread Trading Technique, Tactical Trading, Volatility Trading
As the expiration clock approaches zero, the risk in open spread positions will often increase dramatically. Consider a butterfly spread. If the underlying stock is in the money on one leg, the delta of the spread will explode as the in-the-money leg delta...
Recent Comments