Do you procrastinate when making a decision to enter a trade? Do you get frustrated when you have made a decision, and the choice you made looks as though it may turn against your positon? When you exit a trade, do you beat yourself up because you could have made more money if you had stayed it the trade? Do you get angry because you … [Read more...] about How to Master Procrastination in Your Trading Decisions Quickly
Gamma is the delta of the delta. Gamma will measure approximately how much the delta changes with a price change in the underlying stock. Gamma and delta are related because gamma measures how much the delta will theoretically move. As gamma increases, it can affect the profit/loss of a position dramatically. A stock will change in price … [Read more...] about Core Concepts: Let’s Touch on Gamma
As we come to the end of another trading year, it is that time when we make a few personal decisions. Will you reflect and review on your performance over the past year? Did you set goals for 2015 and if so, how did you do and why? Will you set new goals and a plan of action for 2016? I know many traders! Some successful … [Read more...] about Year End Goal Setting
When you determine the difference between a stock's implied volatility and its current IV percentile, you could have an edge in your trading. This could help you become a more consistently profitable trader. "If you want to have a better performance than the crowd, you must do things differently from the crowd." Sir John … [Read more...] about How Volatility Can be Used to Plan Your Entry Strategies
It happens to every trader at some point. You have a live position on, and something takes you away from your office computer during market hours. You as a trader should have a back-up plan for those days. Here are the steps I take: I use contingent orders when I know in advance that I'll be away for a portion or the entire day. … [Read more...] about On the Go – Tips and Tricks to Manage Your Positions while Away from the Computer
What is discipline? Discipline can be defined as an activity, exercise, or regimen that develops or improves a skill. Discipline is a form of training. I am sure I am not the only trader that has found it challenging to keep discipline at the forefront of my mind at times. Losing discipline happens to every trader at some point. Your … [Read more...] about Why is Discipline Important to a Trader?
The standard deviation of a particular stock or index will inform you about the possible movement over a period of time, based on probabilities. Key factors of standard deviation The higher the volatility, the bigger the standard deviation. The further out in time the date is, the bigger the standard deviation. The larger … [Read more...] about What is a Standard Deviation and What Does it Mean for Options Traders?
About thirteen years ago, as I was approaching retirement from the U.S. Air Force, I knew I would have more time to devote to trading. I have a friend in Australia with two PhDs who built his own trading software in the 90s. His software exclusively used the ES futures for intraday trading. I spent a lot of time learning how to use his … [Read more...] about Trading with Futures Options
Let me ask you a question. Which position is more risky? Selling a Covered Call Selling a Naked Put Most people would say selling a Covered Call is a great investment strategy, but selling a Naked Put is terribly risky. If you understand Option Synthetics, you'll know that these two positions are exactly the same! How … [Read more...] about Option Synthetics Primer
Dan Harvey has a spreadsheet he uses to help guide his contract sizes and manage his Weirdor trades. I extracted the option Greeks portion of it and created an online version which is at http://capitaldiscussions.com/option-position-greeks-calculator Here's a screen shot of it: As the instructions say, you just enter in the price … [Read more...] about Option Position Greeks Calculator Online