Solar City is one of those high beta names that option traders love to play. This stock goes up and down like a yo-yo; it is highly volatile and especially susceptible to big news. The company was started by Elon Musk (of Tesla fame) and is currently trading near all-time highs. What’s striking is the…
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How do you handle it when you find yourself on the wrong side of the market? How do you deal with plunges and unexplained rises that put your positions at risk? Do you find yourself making grave errors and mistakes due to some blip or abnormal market beat? As an options trader, I know these…
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One of the best ways to measure market volatility is the VIX index, which basically is an expression of the demand for puts and calls on the SPX 500 index. Some will define it other ways, but simply put, that is the most raw definition – and really suits our purposes here. When the VIX…
DetailsBollinger bands, named for its developer John Bollinger, are measures of volatility shown by bands that are deviations above and below a relevant moving average. The bands expand and contract as volatility increases and decreases. Take a look at this chart on the right; the Bollinger bands are shown in blue. The bands are typically…
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With the big surge in the VIX Friday, the one thing that caught my interest was selling. No, not selling my positions – selling PREMIUM. When we see volatility rise in uncertain and fearful times, option premium gets lifted as well. Buyers flock for protection using instruments like VIX, the volatility ETN’s, and index puts,…
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Mad Money host Jim Cramer used my Himax (HIMX) chart on a recent show, because he believes the fundamentals around Himax (HIMX) remain solid: their chips are state of the art and should remain in demand. Of course Cramer realizes that with the market selling off broadly, few stocks are immune to weakness, but probably…
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This week’s webinar featured a deep-dive into the technicals. I started the session talking about the current state of the market, followed by the charts and technicals of AAPL, TSLA and some others, plus the SPX 500 chart. Based on the technicals, I think this most recent drop is a nice buying opportunity. Todd Gordon…
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CREE is a name I have traded often over the years with some good results, especially around earnings season. This time the chart wasn’t giving me much of a good read for direction or volatility, so I passed, but now that earnings news is out the technicals turned – literally overnight! The big surge on…
DetailsCiena Corporation (CIEN) is a provider of communications networking equipment, software and services that support the transport, switching, aggregation and management of voice, video and data traffic. The stock recently traded down 6% to hit its bottom bollinger band, a level that has historically been supported. As we’ve discussed, bollinger bands contain 90% of all…
DetailsOne of my favorite methods for income generation using options is to sell cash backed puts or “naked short puts.” It is a staple trading method in my portfolio management, and with proper setup and risk management, I find it to be a low maintenance, low risk, and high probability trading strategy. Today I present…
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