I’m sure we have all traded a call option that declined in value when the stock was on the rise. I know I have done it many times before I started focusing mostly on option selling strategies. We all know that stocks and options are completely different investment vehicles. What’s hard about the question above is ...…
Rebalancing your portfolio and adjusting it for risk and reward can be a daunting task for some traders. As with most things in trading, sometimes it just simply looks harder. To start there are many schools of thought with regard to rebalancing and allocating a portfolio – none of which are correct since they are ...…
May was very good for our members! I tried to make the theme of the May portfolio “trade what you see, not what you want to see.” I thought it was fitting because I’ve been burned before on the Call side anticipating moves lower in the market. Not this month – we had a very ...…
Chart patterns play a critical role in usefulness technical analysis. Chart patterns are a result of human nature and trading psychology. If you can learn to recognize patterns early you can also learn to profit from breakouts and reversals. As you all know I’m a big fan of technical analysis and chart patterns are very ...…
Beginning traders were probably shocked the first time they experienced a stock price gap. I guess even the most experienced traders still get taken back when there is an unexpected stock price gap in a stock they are trading. Either way I wanted to cover once again why they happen and what you can do ...…
I’m an option seller and I think we get a bad rap. When people first hear about naked option selling and option writing they immediately heard about “unlimited losses” and “unlimited risk”. This ignorance and lack of understanding is frustrating to say the least. It’s high time we bring this myth to an end! Frankly ...…
Here we are. Back talking about trading discipline – only this time I’m going to show you why I failed in my own trading this past month. More specifically I left not 1 but 2 multi-hundred return trades on the table exiting two trades early and am very disappointed. Call it what you will, but ...…
I love reading trading books and learning from some of the great investors and traders. My personal preference is to learn from the “Old Guys” like Livermore, Buffett, Lynch and Graham. These guys laid the foundation for modern investing. They didn’t trade on technicals and always offer great insight. Here are 19 great quotes. Add ...…
Beta is a great trading and portfolio tool when used correctly – yes some people don’t use it correctly I’m afraid. Beta is another one of those crazy greeks that determines the association of a stock or a portfolio to overall markets. This is something that I haven’t covered in detail before and I apologize for ...…
I’ve told people for years and years that Warren Buffett’s portfolio and Berkshire Hathaway company publicly discloses that they are naked put option sellers. More specifically they sell index put options, the exact same strategy we use here at Option Alpha. Why Is This So Shocking? Honestly I always get a weird response when I ...…
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