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  • Why Is The VIX So High?

    Why Is The VIX So High?

    Why Is The VIX So High? Unless you’ve had no contact with civilization over the past week, you’re likely aware that the stock market has gone through something of a correction.  Moreover, volatility has been through the roof.  In fact, the VIX reached its highest level since 2011. As a brief reminder, the VIX (S&P […]

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    | August 28, 2015 | 0 Comments

Call Or Put Options?

Buying A Call Option On United States Oil $USO

Buying A Call Option On United States Oil $USO

Buying A Call Option On United States Oil $USO Crude oil is once again making headlines as it plunges towards the $40 per barrel mark.  The world’s most popular commodity has dropped 20% over the past month and has everyone trying to pick a bottom. Is a drop in the price of oil good for […]

Buying A Call Option On Intel $INTC

Buying A Call Option On Intel $INTC

Buying A Call Option On Intel $INTC                                        The semiconductor industry has been on an interesting path so far this year.  Overall, chipmakers are underperforming the market as a whole.  However, certain individual companies are doing quite well. The biggest news from the industry has been the amount of huge mergers over the last year.  Three […]

Buying A Put Option On Box $BOX

Buying A Put Option On Box $BOX

Buying A Put Option On Box $BOX There are typically ample opportunities to find attractive call option to buy on a weekly basis.  It’s fairly common to find stocks that have been oversold in the short-term.  There are plenty of reasons for overselling to take place. On the other hand, overbought stocks are harder to […]

Buying A Call Option On Marvell Technology $MRVL

Buying A Call Option On Marvell Technology $MRVL

Buying A Call Option On Marvell Technology $MRVL Big things are happening in the semiconductor industry.  Avago Technologies $AVGO is buying Broadcom $BRCM for $37 billion.  That’s the largest chip industry deal ever.  The combined entity will provide chips for everything from iPhones to server farms. That’s obviously big news for the industry, which has […]

Buying A Call Option on Take-Two Interactive Software $TTWO

Buying A Call Option on Take-Two Interactive Software $TTWO

Buying A Call Option On Take-Two Interactive Software $TTWO                                        Video game companies can make for interesting investment opportunities.  Like a movie production company, the fortunes of a business can often come from one blockbuster hit.  However, it can be often difficult to predict what game is going to be the next blockbuster. Moreover, the gaming […]

Buying A Call Option On Twitter $TWTR

Buying A Call Option On Twitter $TWTR

Buying A Call Option On Twitter $TWTR Social media stocks have always been a lightning rod for investor debates.  Some people love them, others won’t touch them (or flat out short them).  New industries and business models often tend to act as battlegrounds for investors. But social media has been particularly contentious.  Social media companies […]

Unusual Options Trading Activity

Unusual Options Activity In PowerShares DB US Dollar Bullish ETF $UUP

Unusual Options Activity In PowerShares DB US Dollar Bullish ETF $UUP

Unusual Options Activity In PowerShares DB US Dollar Bullish ETF $UUP As many of you know, unusual options activity can be a valuable indicator as to what traders are thinking, and more importantly, where these stocks are heading in the short-term. This is something professional options traders pay a lot of attention to, and for good reason…  […]

Unusual Options Activity In Apache $APA

Unusual Options Activity In Apache $APA

Unusual Options Activity In Apache $APA As many of you know, unusual options activity can be a valuable indicator as to what traders are thinking, and more importantly, where these stocks are heading in the short-term. This is something professional options traders pay a lot of attention to, and for good reason…  Unusual options activity can “tip […]

Unusual Options Activity In Apple $AAPL

Unusual Options Activity In Apple $AAPL

Unusual Options Activity In Apple $AAPL As many of you know, unusual options activity can be a valuable indicator as to what traders are thinking, and more importantly, where these stocks are heading in the short-term. This is something professional options traders pay a lot of attention to, and for good reason…  Unusual options activity can “tip […]

Unusual Options Activity In Twitter $TWTR

Unusual Options Activity In Twitter $TWTR

Unusual Options Activity In Twitter $TWTR As many of you know, unusual options activity can be a valuable indicator as to what traders are thinking, and more importantly, where these stocks are heading in the short-term. This is something professional options traders pay a lot of attention to, and for good reason…  Unusual options activity can “tip […]

Unusual Options Activity In Bank Of America $BAC

Unusual Options Activity In Bank Of America $BAC

Unusual Options Activity In Bank Of America $BAC As many of you know, unusual options activity can be a valuable indicator as to what traders are thinking, and more importantly, where these stocks are heading in the short-term. This is something professional options traders pay a lot of attention to, and for good reason…  Unusual options activity […]

Unusual Options Activity In Market Vectors Semiconductor ETF $SMH

Unusual Options Activity In Market Vectors Semiconductor ETF $SMH

Unusual Options Activity In Market Vectors Semiconductor ETF $SMH As many of you know, unusual options activity can be a valuable indicator as to what traders are thinking, and more importantly, where these stocks are heading in the short-term. This is something professional options traders pay a lot of attention to, and for good reason…  Unusual options […]

Breaking News

What Can We Learn From Options Action In Altera $ALTR?

What Can We Learn From Options Action In Altera $ALTR?

What Can We Learn From Options Action in $ALTR? As regular readers know, I spend a lot of time discussing large and unusual options trades.  Generally speaking, you can gain quite a bit of insight based on what the smart money is doing in options. But what about options activity in general?  Can overall options […]

Big TLT Options Trade Suggests Rates Are Going To Stay Low

Big TLT Options Trade Suggests Rates Are Going To Stay Low

Big TLT Options Trade Suggests Rates Are Going To Stay Low Large and unusual options trades don’t just give us clues on the possible direction of individual equities.  The same theory can be applied on a macro level. For instance, a big options trade in a sector or country ETF may give us valuable information […]

The Best Way To Trade The Energy Sector

The Best Way To Trade The Energy Sector

Crude oil has crashed and it’s taken the entire energy sector with it. The price of a barrel of crude has gone from $105 to $55 in about six months, a 48% decline. That’s officially a crash. Meanwhile, the energy sector has dropped roughly 20% overall during that period. However, the collateral damage has been […]

The Price Of Oil Keeps Plunging… Now What?

The Price Of Oil Keeps Plunging… Now What?

A few weeks ago, I talked about possible oil trading strategies. At the time, oil was down to $75 a barrel, and it seemed cheap. Since then, oil has plummeted all the way to $65 a barrel, and it may even fall to $60 before all is said and done. Back then, my advice was […]

Trading Options Outside The Box

Trading Options Outside The Box

Part of the challenge in making money trading options (or just in the financial markets in general) is the zero-sum game factor. That is, for every winning trade, there’s someone on the other side losing money. The problem is retail traders have to go up against huge trading firms and banks with endless resources. The […]

How The Heck Do You Trade Oil?

How The Heck Do You Trade Oil?

One of the biggest surprises in the financial markets in 2014 has been the collapse of crude oil prices. In mid-June, West Texas Crude was trading at over $105 a barrel. Barely five months later, the price has dropped below $75. Oil hasn’t been this cheap since 2010. The mind-boggling plunge has caught many investors […]

Volatility Watch

Why Is The VIX So High?

Why Is The VIX So High?

Why Is The VIX So High? Unless you’ve had no contact with civilization over the past week, you’re likely aware that the stock market has gone through something of a correction.  Moreover, volatility has been through the roof.  In fact, the VIX reached its highest level since 2011. As a brief reminder, the VIX (S&P […]

Big Time VIX Action Suggests A Mostly Calm August

Big Time VIX Action Suggests A Mostly Calm August

Big Time VIX Action Suggests A Mostly Calm August The VIX (S&P 500 Volatility Index) is a measure of implied volatility levels on S&P 500 options.  As many of you know, the VIX is often considered the market’s fear gauge.  Overall market volatility is most commonly tracked by watching the VIX. For those who are […]

Does Recent VIX Action Suggest A Market Meltdown Is Coming?

Does Recent VIX Action Suggest A Market Meltdown Is Coming?

Does Recent VIX Action Suggest A Market Meltdown Is Coming? Savvy investors know that VIX options are always worth keeping an eye on.  It’s where the smart money tends to execute important trading strategies and portfolio hedges.  Some of the biggest trades you’ll ever see happen in the VIX options pit. Of course, the VIX […]

New Weekly VIX Options Are Great For Volatility Traders

New Weekly VIX Options Are Great For Volatility Traders

New Weekly VIX Options Are Great For Volatility Traders As volatility becomes a more popular metric for investors to watch, so does trading volatility products.  The VIX itself is tradable through futures and options.  VIX options are heavily traded by large institutions as an alternative to S&P 500 options. As a reminder, the VIX (S&P […]

A Large VIX Call Trade Suggests No Panic Is Necessary

A Large VIX Call Trade Suggests No Panic Is Necessary

A Large VIX Call Trade Suggests No Panic Is Necessary Over the past couple weeks, we’re finally getting to see why the VIX is often called the ‘fear gauge’ for investors.  There hasn’t been a lot to be concerned about this year until recently, so the VIX has been mostly running at low levels. Lately […]

Is This Large VIX Trade Signaling An End To Investor Fear?

Is This Large VIX Trade Signaling An End To Investor Fear?

Is This Large VIX Trade Signaling An End To Investor Fear? There’s a reason the VIX is often called the investor ‘fear gauge’.  The benchmark volatility index is often the first place to see when investors start increasing the hedges on their portfolio. Of course, hedges tend to increase along with investor concern over a […]

Options Trading Strategies

Using The Option Straddle

Using The Option Straddle

Using The Option Straddle Every earnings season I get questions about what option strategy to use. I hear things like, “What’s the best strategy to use to play earnings?” or “How do I use options to make money on earnings?” With options, there are always several right answers. However, for new traders, I usually recommend […]

Should You Be Trading VXX?

Should You Be Trading VXX?

One of the primary themes I like to discuss on this site is volatility. After all, you shouldn’t be trading options if you don’t at least have a basic understanding of why volatility is important to the financial markets.

Reverse Iron Butterfly Spread

Reverse Iron Butterfly Spread

The reverse iron butterfly spread is a complex, debit spread strategy which benefits from movement in the underlying instrument.  It’s similar in concept to a short butterfly spread, except it’s a debit spread.  A trader profits from a reverse iron butterfly spread when the underlying stock rallies or sells off. A reverse iron butterfly spread […]

Short Condor Spread

Short Condor Spread

The short condor spread is a complex credit spread strategy which benefits from movement in the underlying instrument.  A trader profits from a short condor spread when the underlying stock rallies or sells off. A short condor spread is made up of four options trades at once.  It can be done with either all calls […]

Short Straddle

Short Straddle

A Short Straddle is a neutral options strategy which produces a profit when the underlying stock doesn’t move much up or down.  It’s essentially the opposite of a Long Straddle which profits when the underlying stock makes a big move up or down. So, if you think your stock is going to move sideways for […]

Long Straddle

Long Straddle

A Long Straddle is created by buying both a put and a call with the same terms.  In other words, you buy both a put and a call on the same underlying stock, with the same strike price, and the same expiration date. A straddle purchase allows the buyer to make big potential profits if […]

Options Trading Basics

Making Money With Trend Tracking

Making Money With Trend Tracking

One of the reasons that we created the Option Trading Research tracking system was to identify and track companies that have growth potential.  And to show us where a lot of option buying is coming from.  One such area we used to track before we created this system was companies like the makers of obesity […]

Stock Heading To Zero… What To Do

Stock Heading To Zero… What To Do

Sometimes a stock has been beaten down so much that it seems destined to hit zero. However, even if we are eventually right about the direction, it can be very difficult, if not outright dangerous, to attempt to profit from this type of situation before the company goes bust. Why, what’s the risk? One of […]

A Professional Way To Measure A Stock

A Professional Way To Measure A Stock

Lately I hear a lot of people talking about value investing, but see very few actually practicing it. Here’s the kicker… Once your asset base reaches a certain level, I believe that it’s almost impossible to manage this style effectively. Therefore, I’ve been working diligently to further automate my research process. It seems that yellow […]

No More Vacation For Traders

No More Vacation For Traders

Every man who possibly can should force himself to a holiday of a full month in a year, whether he feels like taking it or not. –William James It seems that the vacation season is having little impact on the market this summer.   I can say this with confidence because the S&P 500 continues to […]

Don’t Think About It Too Much

Don’t Think About It Too Much

“The Gods Must Be Crazy” is a great 1980’s film that contrasts the frenzy of modern existence with the calm of African tribal life.  In one of its very first scenes, a woman turns to the main character and asks, “Does the noise in my head bother you?” The point, of course, is that some […]

Putting Bonds On Warning?

Putting Bonds On Warning?

There’s no question that the market continues a tight tug of war between risk aversion and risk appetite. On one hand, the bulls stress the value of equities and oppose the extreme levels of negativity toward them.  By almost every measure, they’re cheap relative to the alternatives. On the other hand, we’ve all heard the […]