Even a monkey can buy/sell an option, catch the market at just the right time, and watch the money roll in. But we all know that these trades are only in our sweet trading dreams. The reality is that positions will go against us and you must learn how to adjust option trades and become ...…
November trading again was very active with adjustments but profitable here at Option Alpha. For the stock market, if it hadn’t been for the 4% move on the 29th it would have been a very red month. Needless to say, I tried to stay conservative all month and took risk off when necessary which did ...…
I’ve written a lot of really good content on technical analysis over the past couple of years, and I figured it was time to put it all the best content into one place, so that anyone who was starting out trading would have a simple beginner’s guide. The goal is that you would be able ...…
Black Friday sales reports showed a considerable gain over the weekend. Naturally investors are hoping that Santa Claus will make for a very Merry Christmas and Happy New Year with a big end of year rally. So before you start listening to all the news stories that will come out around this time, let’s see if ...…
As the universe of ETFs continues to grow, seemingly daily, it seems that investors and traders are getting more and more interested in these exotic products. Since you can basically create or develop an ETF for practically anything you want, the popularity of inverse ETF has exploded as an alternative to short any market and ...…
Whipsaw trading can really put a damper on your portfolio, so let’s take a step back right now and do a quick mini-lesson on technical analysis and MACD Divergence. After looking at charts for the past 5 days sitting on mostly all cash heading into expiration, I’ve noticed that the technical are flashing some important ...…
Especially when dealing with money, traders can sometimes develop self-destructive habits. As stocks jump up and down in price throughout the day, they can take hold of your mind and begin to play you like a fiddle if you are not careful. That’s why it’s so important to learn how your emotions will react to ...…
Each month Option Alpha has seen it’s readership and members grow – which is great. As always, I’ve never done any advertising or marketing for this blog. I’d rather have it grow via word of month and social media which to me is “real” growth and not “paid” growth. So thank you all and keep ...…
With the recent market volatility I wanted to cover a new topic and strategy. It’s another tool to put in your box and a great way to take advantage of volatility skew in options pricing. As we all know implied volatility levels should really drive your trading strategy, and having a way to profit from ...…
Ribbon studies and multiple moving averages are becoming more and more popular among trend traders. The basic idea behind the technical indicator is that you are using roughly 12-16 different moving averages on the same exact chart (instead of using just 1 or 2 on your chart). How Do You Build This Indicator? Typically ribbon ...…
Stock markets surged more than 4% last week and have climbed nearly 15% this month. We all know this has been one of the best months for stocks in nearly 40 years. Where do we go now though and how should you position your portfolio? I think volatility will still be very prevalent -especially with the ...…
Yesterday Netflix (NLFX) reported earnings and in after-hours trading the stock was down more than 25%. Yes in a matter of minutes, 25% of the market value of this poor company was gone! Today the stock closed down by nearly 35%. So what’s the point of all this Kirk? Well, I wanted to use NFLX ...…
During expiration weeks I get a lot of questions about options exercising and assignment. Mostly traders are concerned that their short option contracts or spreads will be assigned at expiration. In an effort to help calm the nerves during the crazy period, I decided to put together this guide to help you understand your risks ...…
October was light but profitable. Again we tried to stay conservative not knowing if the markets would again fall off a cliff (which they didn’t but I’d rather be safe than sorry). Of the trades we did enter they were very profitable, but the amount of excess cash in the portfolio didn’t help. Regardless, small ...…
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