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Volatility Update: A Short Story about Fat Tail Risk

Volatility Update: A Short Story about Fat Tail Risk

Fat tail risk? Yep, you heard that right. Tail risk refers to the possibility that an asset or portfolio moves outside of its typical, or expected, range. Fat tails, especially, can potentially leave the perception that market conditions are more volatile than other signals are letting on.

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Fine-Tuning: Option Adjustments for Losing Trades
September 17, 2015

Fine-Tuning: Option Adjustments for Losing Trades

Some trading lessons come fast and furious. The market isn’t always kind. Remember those option adjustments for potential winners that we introduced in part one?

Volatility Update: Will Earnings Tip Toward Risk Aversion?
September 17, 2015

Volatility Update: Will Earnings Tip Toward Risk Aversion?

The final three-month stretch of 2015 could be a pivotal period on Wall Street, and it kicks off with a tough test buried in the next round of earnings reports. Yes, the ...

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Fine-Tuning: Option Adjustments Aimed at Saving Winning Trades
September 10, 2015

Fine-Tuning: Option Adjustments Aimed at Saving Winning Trades

Have you ever kicked yourself for getting out of a trade too early? Or lamented your stubbornness for staying in too long? Everyone has. There are plenty of times ...

Volatility Update: Market Noise Stresses Perception vs. Reality
September 10, 2015

Volatility Update: Market Noise Stresses Perception vs. Reality

Ever had a nightmare so palpable that when you woke up, it took a few head shakes to separate fantasy from reality? On Wall Street, the fear of nightmare market ...

Option Strategy: Slay Volatility with Weekly Double Calendars
September 9, 2015

Option Strategy: Slay Volatility with Weekly Double Calendars

Indulge me in a little role play. Setting: Low-volatility stock market. Scene: Experienced option trader sells iron condors. Inventory is plentiful. The underlying drops a ...

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Volatility Update: High-Wire Act; Plus, Verticals for Direction Play
September 3, 2015

Volatility Update: High-Wire Act; Plus, Verticals for Direction Play

The U.S. Labor Day holiday celebrates American workers as well as their social and economic achievements. In a few days, market makers ...

Volatility Update: Record-Book Rewrite; Time for Iron Condors?
August 27, 2015

Volatility Update: Record-Book Rewrite; Time for Iron Condors?

An increase in investor risk perceptions is palpable. As the S&P 500 (SPX) suffered a four-day, 6.3% decline through the end of last week, trading volumes ...

Volatility Update: Select Summer Sizzle; Plus, Check Your Calendars
August 20, 2015

Volatility Update: Select Summer Sizzle; Plus, Check Your Calendars

Sure, the S&P 500 (SPX) hasn’t made much headway in the past seven months and, just last week, was sitting unchanged year to date. But the aimless meanderings ...

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Volatility Update: Weekly Options on VIX; Plus Low-Vol Calendars
August 13, 2015

Volatility Update: Weekly Options on VIX; Plus Low-Vol Calendars

The Chicago Board Options Exchange (CBOE) on October 8 will launch weekly options on the CBOE Volatility Index (VIX). It’s a new spin on ...

Trying Out Futures Options? Here are Key Differences vs. Equities
August 6, 2015

Trying Out Futures Options? Here are Key Differences vs. Equities

If you’re considering new ways to take advantage of market movement, futures options can provide your futures trading with much of the same flexibility and ...

Rolling: The Art and Science of Extending a Trade's Duration
August 3, 2015

Rolling: The Art and Science of Extending a Trade's Duration

Expiration is approaching and you have an options position—let’s say a covered call or a long-dated calendar spread. So, you have a decision ...

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Advanced Trading: Choosing Your Iron Condor Strike Price
July 23, 2015

Advanced Trading: Choosing Your Iron Condor Strike Price

Iron condors are advanced option trades designed as an income strategy. The objective is straightforward once you determine your desired strike price. But finding ...

Choosing Credit Spreads vs. Debit Spreads: Let Volatility Decide
July 16, 2015

Choosing Credit Spreads vs. Debit Spreads: Let Volatility Decide

Vertical spreads are among the first strategies that option traders learn because they’re relatively straightforward and have defined risk profiles. Vertical ...

Short-Sighted on Purpose: Options to Hedge Jobs Report
July 2, 2015

Short-Sighted on Purpose: Options to Hedge Jobs Report

Some of the stock market’s biggest moves come after economic reports. One fan favorite is the non-farm payrolls and unemployment report, which is issued ...

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Feeling Stock Market Sticker Shock? Options Might Help
June 25, 2015

Feeling Stock Market Sticker Shock? Options Might Help

High-priced stocks are more common now that stock splits have lost the popularity they boasted a few years ago. Examples are rampant among some of the most ...

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