Dan Harvey, the Iron Condor supertrader, created the popular Weirdor trade several years ago. Jim Riggio, Paul Demers and others modified Dan's Weirdor with different trade management rules. This variation was named the Jeep trade to distinguish it from Dan's Weirdor. The trade was named the Jeep because the expiration lines are … [Read more...] about Jeep Trade Alerts Initial Trial
Time decay in options, also called "Theta", is the measurement of how much the value of an option will lose or gain each day as it gets closer to expiration. Time decay is not linear - the theoretical rate of decay accelerates as the option gets closer to expiration. The best way to explain time decay is using an example. The example … [Read more...] about How Time Decay in Options Works
Are you using oscillators such as fast and slow Stochastics, Williams % R, and MACD? Have your results been less than you had hoped? Then you may want to take a look at the Choppiness Index. The Choppiness Index can be used as an indicator which could give hints as to the extent of a trend, and when a trend may be getting ready to end. … [Read more...] about What is the Choppiness Index and How Can You Use It?
Today we will talk about another technical indicator, the Relative Strength Index (RSI). The RSI is considered to be a leading indicator similar to Stochastics and Williams %R, and generally, precedes price movement in the underlying. RSI is a popular indicator used by many traders to identify potential buy and sell signals, confirming … [Read more...] about Technical Indicators 101: Relative Strength Index (RSI)
SPX and SPY are two very similar instruments from which a trader can choose. Today we will talk a bit about the similarities and differences between the two. What is SPX? SPX is the nickname for the Standard and Poor's 500 Index. It is based on the 500 largest companies whose stock trades on the NYSE or NASDAQ. A list of the 500 … [Read more...] about What’s the difference between SPX and SPY Options?
I've written over recent weeks about a few of the numerous technical indicators available to traders. This week I will touch on the Williams %R oscillator. This oscillator was developed by well-known technical analyst Larry Williams. It is similar to the Stochastic oscillator, as it is also a momentum indicator. Like the Stochastic … [Read more...] about Technical Indicators 101: The William %R Oscillator
A diagonal spread, also known as a time spread, may be a strategy you would like to implement into to your trading arsenal. Today we will discuss how a diagonal spread is created. We will also discuss some of the advantages and disadvantages of a diagonal spread. A diagonal spread is a strategy which occurs when two options are bought … [Read more...] about What is a Diagonal Spread or Time Spread?
The Stochastic Oscillator was developed by George C. Lane in the 1950's. It is a momentum indicator that shows the location of the underlying's close relative to its range of the highs/lows over a set number of periods. This indicator follows the speed or the momentum of the price of the underlying. The Stochastic Oscillator will be … [Read more...] about Technical Indicators 101 – The Stochastic Oscillator Part I
This week's article will be an overview of what is a broad subject; technical indicators. Subsequent articles will cover some of the more popular indicators in detail, but we will cover the basics to start. Many traders use technical indicators to some degree to help them in their market analysis and trade management. Technical … [Read more...] about Technical Indicators 101 – An Overview
A trading curb, also referred to as a "circuit breaker" is a mechanism to help prevent the market from crashing during extreme volatility. When they are triggered, circuit breakers either halt trading for a certain period of time, or close the trading day early to allow investors and market makers to assess their positions and make … [Read more...] about What is a “Trading Curb” or “Rule 80”?