Reading the MMT

The options market is full of information about where the market perceives it is headed if one knows where to look. Today I want to talk about what the market thinks the trading range will be over a given time. To see this we look at the at the money (ATM) straddle...

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A Trade If You Think a Stock Or Index Will Puke

Today I’d like to discuss a strategy to use when you expect an explosive move lower.  Which could happen at any time. Black Swans do fly (and more often than one might imagine),  This option strategy is called The Put Back Spread. The P&L graph looks like this:...

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Flauwe Dinsdag Vaste Week

A little Dutch for thisTuesday. Here is a picture is of a canal I used to live on in Amsterdam. What the title of today’s column means in English is, “Weak Tuesday, strong week”, an old Dutch stock market saying. With the market down today after a strong Monday  we’ll...

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What is Open Interest?

I always advise my students and mentees to only trade option series that show good liquidity. Ease of exit in a position is more important than ease of entry. On the trading floor we used to speak of a “Roach Motel Position”…Easy to get in, impossible to get out. What...

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Caveat Emptor

We all know that is Latin for ‘Let the buyer beware”. It certainly applies to the stock market so far  this  year as tech among other sectors looks increasingly shaky even as the market flirts with new all time highs. This also applies to financial advice and...

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Synthetic Stock Long and Short

I just want to say one word to you, just one word, synthetics” Obviously this is play on the famous quote from that fine old movie, The Graduate. The actual word Benjamin is told was “plastics”, but it’s a way of introducing what I do want to talk about today, and...

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Market Commentary

Sometimes social/political stuff thrown in for good measure