RBI LEAVES REPO RATE, CRR, SLR UNCHANGED
Tuesday, 2 February 2016
Monday, 1 February 2016
3 TIPS FOR USING OPTIONS
TATAMOTORS CALL GIVEN ON 29 JAN ACHIEVED 1ST TGT
Options have been misunderstood by the majority of individual investors for as long as they existed. Options have been around for a long time (since biblical times when a clever person bought call options on as many olive presses as possible and reaped large profits when the harvest was huge and people had to come to him to gain access to the presses), but they have been traded on an exchange only since 1973 (when the CBOE opened its doors).
Despite the fears of uneducated investors, these two statements are true:
· Options are risk-reducing investment tools.
· Many option traders adopt very risky strategies using options, despite the fact that far more conservative strategies are available.
TIPS: HOW TO USE OPTIONS EFFECTIVELY WITH LIMITED RISK
1. DON'T BE GREEDY.
Be willing to own positions where profit potential is limited, rather than unlimited.
Adopt strategies where losses are capped -- preventing a financial disaster -- and with a high probability of success.
Bullish traders can sell out-of-the-money put spreads.
Bearish traders can sell out-of-the-money call spreads.
In either scenario, do not sell spreads with a tiny premium.
Selling naked options places the seller at risk of a large loss. Remember that markets do unexpected things every so often, and it is important to practice sound risk management by avoiding owning positions that could -- no matter how unlikely -- blow up your account.
Note: It is acceptable to sell naked put options if two conditions are met: (a) You want to own shares of the underlying stock, even if the price plunges below the strike price; (b) you have enough cash in your account to buy those shares, if you are assigned an exercise notice on those puts.
2. Understand that using options as mini-lottery tickets is a money-losing proposition. It is understandable that you want to dream big dreams. However, when placing your money at risk (every trade comes with some risk), it is important for traders to consider the probability of earning a profit, and not only the size of that potential profit.
Do not make a habit of buying inexpensive, low-Delta, out-of-the-money options. Sure it is tempting to buy an option for $10 or $20 when there is a chance of scoring a 10-bagger (i.e., earning 10 times the cost of the option), but those options have very little chance of performing as you hope.
You may believe that the price of a specific stock has a good chance rise from $44 to $57 over the next couple of months, but that is a very unrealistic expectation (unless you have inside information -- in which case it is against the law to buy options). Buying calls with a $55 strike price options is just foolish because such options tend to expire worthless. Sure the loss is small, but the chances of earning money with this strategy are even smaller.
Options have been misunderstood by the majority of individual investors for as long as they existed. Options have been around for a long time (since biblical times when a clever person bought call options on as many olive presses as possible and reaped large profits when the harvest was huge and people had to come to him to gain access to the presses), but they have been traded on an exchange only since 1973 (when the CBOE opened its doors).
Despite the fears of uneducated investors, these two statements are true:
· Options are risk-reducing investment tools.
· Many option traders adopt very risky strategies using options, despite the fact that far more conservative strategies are available.
TIPS: HOW TO USE OPTIONS EFFECTIVELY WITH LIMITED RISK
1. DON'T BE GREEDY.
Be willing to own positions where profit potential is limited, rather than unlimited.
Adopt strategies where losses are capped -- preventing a financial disaster -- and with a high probability of success.
Bullish traders can sell out-of-the-money put spreads.
Bearish traders can sell out-of-the-money call spreads.
In either scenario, do not sell spreads with a tiny premium.
Selling naked options places the seller at risk of a large loss. Remember that markets do unexpected things every so often, and it is important to practice sound risk management by avoiding owning positions that could -- no matter how unlikely -- blow up your account.
Note: It is acceptable to sell naked put options if two conditions are met: (a) You want to own shares of the underlying stock, even if the price plunges below the strike price; (b) you have enough cash in your account to buy those shares, if you are assigned an exercise notice on those puts.
2. Understand that using options as mini-lottery tickets is a money-losing proposition. It is understandable that you want to dream big dreams. However, when placing your money at risk (every trade comes with some risk), it is important for traders to consider the probability of earning a profit, and not only the size of that potential profit.
Do not make a habit of buying inexpensive, low-Delta, out-of-the-money options. Sure it is tempting to buy an option for $10 or $20 when there is a chance of scoring a 10-bagger (i.e., earning 10 times the cost of the option), but those options have very little chance of performing as you hope.
You may believe that the price of a specific stock has a good chance rise from $44 to $57 over the next couple of months, but that is a very unrealistic expectation (unless you have inside information -- in which case it is against the law to buy options). Buying calls with a $55 strike price options is just foolish because such options tend to expire worthless. Sure the loss is small, but the chances of earning money with this strategy are even smaller.
Saturday, 30 January 2016
TRADING WITH ADDITIONAL RISK
It concerns risk taking, and although the
statement may seem to be trivial, it is far from it. It is an important
concept.
Don’t expect to make more money for taking risk; just know you have to take additional risk to make more money.
If you don’t understand the difference, you should not be taking risk.
One of the basic concepts regarding investing is that there are no free lunches and that you, the investor, must take some risk in order to earn a return on your investment.
If you are a very skilled trader, you may be able to get away with taking very little risk. However, for the vast majority of investors/traders, we must take on additional risk when we seek to earn a higher profit.
I hope that makes sense. If you were able to earn a high reward on your investments with very low risk, then almost every investor on the planet would go after those rewards.
Usually, no further discussion is required because we all understand when many people go after the same investment product, then there are often those who are willing to accept a slightly lower reward. That in turn drives down the overall reward available to investors. To understand why this is true, just imagine a $100 bond that returned $10 every year. You love that 10% annual return. But another investor may we willing to accept less and may bid $105 for that bond. When that happens, you can no longer buy the bond for $100. The price is now higher and the reward is now less. The process continues (i.e., the cost of the bond increases) until equilibrium is reached and no one is willing to pay a higher price.
By the time that happens, the bond could easily be selling for $120 and the annual return would be 8.33%.
THE MAJOR POINT IS THAT EXTRA RISK DOES NOT GUARANTEE ANY EXTRA REWARD. IN FACT THERE MAY BE NO REWARD. Imagine a careless, inexperienced trader adding risk to his/her portfolio with the expectation that it will lead to greater gains.
Using the above bond example, the fact that the business had to pay as much as 10% to sell the bonds initially suggests that the company may never be able to repay the debt. Financially sound companies do not have to pay so far about current market rates when selling bonds. The fact that this company has to pay so much in order to attract lenders says a lot about the high risk involved when lending money to them. It's great to earn $10/year per $100 investment, but if the company defaults and you never get back any of the $100 invested, that is an example of no reward.
Don’t expect to make more money for taking risk; just know you have to take additional risk to make more money.
If you don’t understand the difference, you should not be taking risk.
One of the basic concepts regarding investing is that there are no free lunches and that you, the investor, must take some risk in order to earn a return on your investment.
If you are a very skilled trader, you may be able to get away with taking very little risk. However, for the vast majority of investors/traders, we must take on additional risk when we seek to earn a higher profit.
I hope that makes sense. If you were able to earn a high reward on your investments with very low risk, then almost every investor on the planet would go after those rewards.
Usually, no further discussion is required because we all understand when many people go after the same investment product, then there are often those who are willing to accept a slightly lower reward. That in turn drives down the overall reward available to investors. To understand why this is true, just imagine a $100 bond that returned $10 every year. You love that 10% annual return. But another investor may we willing to accept less and may bid $105 for that bond. When that happens, you can no longer buy the bond for $100. The price is now higher and the reward is now less. The process continues (i.e., the cost of the bond increases) until equilibrium is reached and no one is willing to pay a higher price.
By the time that happens, the bond could easily be selling for $120 and the annual return would be 8.33%.
THE MAJOR POINT IS THAT EXTRA RISK DOES NOT GUARANTEE ANY EXTRA REWARD. IN FACT THERE MAY BE NO REWARD. Imagine a careless, inexperienced trader adding risk to his/her portfolio with the expectation that it will lead to greater gains.
Using the above bond example, the fact that the business had to pay as much as 10% to sell the bonds initially suggests that the company may never be able to repay the debt. Financially sound companies do not have to pay so far about current market rates when selling bonds. The fact that this company has to pay so much in order to attract lenders says a lot about the high risk involved when lending money to them. It's great to earn $10/year per $100 investment, but if the company defaults and you never get back any of the $100 invested, that is an example of no reward.
Friday, 29 January 2016
OPTIONS ARE NOT STOCKS...!!!!!
"SELL TATAMOTORS FUTURE BELOW 336 TGT 334.5/332.2 SL 338.9"
"BUY NIFTY 7500 CALL@ 154 TGT 179/194 SL 128"Whether you are a trader or an investor, your objective is to make money. And your secondary objective is to do so with the minimum acceptable level of risk.
One of the major difficulties for new option
traders arises because they do not really understanding how to use options to
accomplish their financial goals. Sure, they all know
that buying something now and selling it later at a higher price is the
path to profits.
But that is not
good enough for option traders because option prices do not always behave as
expected.
For example, experienced stock traders do not
always buy stock. Sometimes they know sell short hoping to profit when the
stock price declines. Too many novice option traders do not consider the
concept of selling options (hedged to limit risk), rather than buying them.
Options
are very special investment tools and there is far more a trader can do than
simply buy and sell individual
options. Options have characteristics that are not available elsewhere in
the investment universe. For example, there is a set of mathematical tools
("the Greeks") that
traders use to measure risk. If you don't grasp just how important that is,
think about this:
If
you can measure risk
(i.e. maximum gain or loss) for a given position, then you can manage risk. Translation: Traders can
avoid nasty surprises by knowing how much money can be lost when the worst-case
scenario occurs.
Similarly, traders must know the potential reward for any position in order to determine whether seeking that potential reward is worth the risk required.
Similarly, traders must know the potential reward for any position in order to determine whether seeking that potential reward is worth the risk required.
For
example, a few factors that option traders use to gauge
risk/reward potential:
·
Holding
a position for a specific period of time. Unlike stock, all options lose value
as time passes. The Greek letter "Theta"
is used to describe how the passage of one day affects the value of an option.
·
Delta measures
how a price change -- either higher or lower -- for underlying stock
or index affects the price of an option.
·
Continued
price change. As a stock continues to move in one direction, the rate at which
profits or losses accumulates changes. That is another way of saying that the
option Delta is not constant, but changes. The Greek, Gamma describes the rate at which Delta
changes.
This is very different for stock (no matter the stock price, the value of one share of stock always changes by $1 when the stock price changes by $1) and the concept is something with which a new option trader must be comfortable.
This is very different for stock (no matter the stock price, the value of one share of stock always changes by $1 when the stock price changes by $1) and the concept is something with which a new option trader must be comfortable.
·
A
changing volatility environment. When trading stock, a more volatile market
translates into larger daily price changes for stocks. In the options world,
changing volatility plays a large role in the pricing of the options. Vega measure how much the price
of an option changes when estimated volatility changes.
Thursday, 28 January 2016
WRITING COVERED CALLS
I
prefer to begin discussions about learning various option strategies with Writing Covered
Calls because it is easy to understand and because it will feel natural to
stock market investors.
First,
a definition: A covered
call is a position consisting of two parts:
·
Long
(that means you own) 100 shares of stock.
·
Short
(i.e., you sold) one call option whose underlying asset is that same stock.
WHY BEGIN WITH THIS STRATEGY?
Although
it is not true for every new option trader, most people who come to the options
world have some prior trading experience -- specifically, buying and selling stock. Writing
covered calls is an extension of that investment strategy. I recommend
beginning an options education with this strategy for one basic reason: It is a
natural extension of something that most new option traders are already
familiar with (buying stock).
That makes it
much easier to glide into using options.
This is not the appropriate space to talk about
whether an individual investor is better off choosing individual stocks or
sticking with index funds or specific exchange-traded funds (ETFs). I
have a deep dislike for traditional mutual funds because of their steep sales
charges (loads and/or redemption fees) and excessive management fees. If
you are someone who already invests in individual stocks, then the
strategy described below is likely to be very useful during the early stages of
your options-trading career.
STRATEGY DESCRIPTION
Covered call writing (CCW) is a method for
reducing risk associated with owning stock. Stockholders may earn a
very large profit when the stock price soars, but they are subject to
large losses when the stock price tumbles.
If you prefer to hedge that
downside risk, then selling (writing) one call option for each 100 shares of
stock owned is an efficient hedging method.
WHY IS A COVERED CALL A HEDGED
POSITION?
As a reminder, when you sell a call option, the
buyer is granted the right to buy your stock (at the strike price) at any time
before the option expires.
Therefore,
if the stock is trading above that strike price when expiration
arrives, the call owner will exercise her rights to buy the shares, and you are
obligated to sell. Profits are limited because you cannot sell your stock at
any price higher than the strike price as long as you remain short that
call option. In other words, you sacrificed the possibility of selling stock at a higher price in exchange
for the cash premium that
you were paid when selling the call.
Wednesday, 27 January 2016
SUNK COST AND RISK MANAGEMENT
LOSING MONEY? WHAT NOW?
If you find yourself thinking along these lines [placing a wager that recovers lost money and gets you back to break-even status is so important, that taking extra risk is acceptable], then don’t worry, you are like the majority of people in the world today.
Just remember that though it can be very tempting to take a big risk in order to break even, that risk might put you much further in the hole. Before you take that gamble, think very seriously about the consequences of losing.
If you can consider it rationally, you will realize that it’s much better to stop before you do further damage. Sometimes it’s better to accept a loss and walk away—much like sunk money.
It is very difficult for most people to walk away from a situation in which money has been lost. The temptation to continue playing the game is so strong -- not only for financial reasons -- but because it is psychologically unsatisfying to end the game as a loser. Getting back to break even is almost addictive.
In different language: Consider this scenario: You play poker, bet at the racetrack or invest in the stock market, and find yourself losing $100. You can walk away or continue to play. For most people, the possibility of recovering that $100 is so tempting that they may wind up losing far more money than they can afford to lose -- just in an attempt to recover losses.
This is the important part that is difficult for rational people to recognize: When people make an investment, earning $100 has a certain amount of pleasure associated with it. However, if they first lose $100, then earning $100 is far more satisfying -- despite the fact that it has the same financial value. "Not losing" is more satisfying than "winning" -- and that may lead to taking more risk than is prudent.
SUNK COST
When money has been lost and cannot be recovered, there is nothing that can be done. That is the sunk cost.
If you find yourself thinking along these lines [placing a wager that recovers lost money and gets you back to break-even status is so important, that taking extra risk is acceptable], then don’t worry, you are like the majority of people in the world today.
Just remember that though it can be very tempting to take a big risk in order to break even, that risk might put you much further in the hole. Before you take that gamble, think very seriously about the consequences of losing.
If you can consider it rationally, you will realize that it’s much better to stop before you do further damage. Sometimes it’s better to accept a loss and walk away—much like sunk money.
It is very difficult for most people to walk away from a situation in which money has been lost. The temptation to continue playing the game is so strong -- not only for financial reasons -- but because it is psychologically unsatisfying to end the game as a loser. Getting back to break even is almost addictive.
In different language: Consider this scenario: You play poker, bet at the racetrack or invest in the stock market, and find yourself losing $100. You can walk away or continue to play. For most people, the possibility of recovering that $100 is so tempting that they may wind up losing far more money than they can afford to lose -- just in an attempt to recover losses.
This is the important part that is difficult for rational people to recognize: When people make an investment, earning $100 has a certain amount of pleasure associated with it. However, if they first lose $100, then earning $100 is far more satisfying -- despite the fact that it has the same financial value. "Not losing" is more satisfying than "winning" -- and that may lead to taking more risk than is prudent.
SUNK COST
When money has been lost and cannot be recovered, there is nothing that can be done. That is the sunk cost.
Monday, 25 January 2016
THE APPEAL OF BINARY OPTIONS
There is a type of option that is not offered
by the "regular" options exchanges (such as CBOE or ISE). It's the binary option.
Binary options
are very easy to understand. The gambler (sure, there is an effort to describe
players as stock-market investors, but trading binary options is gambling)
places a bet. It works like this: Some future event will either be true or not
true -- and you can take either side of that bet.
Another way to
state the gambling proposition: Your wager will be worth $100 or $0 when the
option expires. There are no other choices. If the event comes true, those who
bet on "come true" can cash in their wager for $100. Those who bet it
would not come true lost, and their "investment." is worth $0 (i.e.,
it expires worthless).
For example:
"The S&P 500 Index will be up more than 6.00 points today." In
the morning, before the market opens, let's assume that the futures markets are
neutral. In that scenario, it is more likely than not that the proposition will
turn out to be false because the index rises by more than 6 points less than
half the time, or "not true" when the day ends. Thus, people who want
to wager that the proposition will come true will get a little bit better than
even money odds. Those who bet it will not be true must accept odds of less
than even money (i.e., they can win less than $1 for each $1 wagered).
Binary options
can also be used for longer-term situations, such as:
- Donald Trump will be elected President of the USA in 2016
- The stock market will close lower on Dec 31, 2016 that it did on Dec 31, 2015
- Hillary Clinton will be elected president
of the USA in 2016.
- The Chicago Cubs will play in the World Series in 2016.
It's
very easy to understand how binary options work. Most people like to predict
things. When you have a strong hunch, it is tempting to place friendly bets
with friends.
Saturday, 23 January 2016
PREPARING FOR A MARKET DECLINE; HEDGE RISK WITH PUT OPTIONS
Experienced, sophisticated investors have a huge
advantage over beginners. One of the prime reasons is that the novice tends to
jump from one strategy to another, taking advice from whomever has a hot hand.
What those new investors fail to understand is that past performance is seldom
worth much in predicting future performance and thus, those who have recently
performed well tend to do poorly as soon as market conditions change.
Instead of following an advisor who made money last month, last week, or yesterday, it makes far more sense for each investor to adopt a long-term basic methodology for putting his/her money to work.
USING OPTIONS
One of the best ways for investors to have a less rocky ride -- as markets soar and plunge -- is to use options as a risk-reducing investment hedge.
One such strategy is buying puts as portfolio protection. If you like that idea, it is essential to have those options in your portfolio before the decline picks up steam. The reason why this is so important concerns the way that options are priced. If you are new to the options world, then the simple explanation is as follows:
Option prices are based on several factors, such as the stock price and the strike price of the options. However, the most important factor in option pricing is the expectation of just how volatile the market is expected to be in the future. When markets are calm or rising, most traders see little reason to expect market volatility to suddenly increase. For that reason, there is no special demand to buy options, and the supply is sufficient to match the demand.
As a result, option premium (price of options in the marketplace) makes it painless to buy options.
The problem is that, most traders/investors see no need to own options when markets are calm.
When markets are falling, investors tend to get nervous. Because markets (on average) fall faster than they rally, whenever any decline threatens investors with large losses, (think late 2008 or Jan 2016), there is suddenly a demand for put options.
Unfortunately for people who want to buy those options, the supply diminishes and it becomes necessary to pay much higher prices to get any options. There are two reasons for that. First, as stocks decline, puts are worth more. (Think about a stock that falls from 90 to 85. The right to sell stock at a specific price, a put option, is worth more when the stock is 85 than when it is 90). Second, fear that markets will become more volatile and that the decline will continue makes people raise their volatility estimates for the future. And volatility plays a very large role in the price of options.
Those who wait to buy options until a decline is well underway are forced to pay big prices for their put options. And the price increases are not trivial. Using the CBOE Options Calculator for a stock priced at $100 per share, and paying no dividend, compare the estimated future volatility (referred to as the implied volatility of the option) of put options vs. the calculated fair value of the option.
IMPLIED VOL VS. OPTION PREMIUM
The
bottom line for investors who want to own put options as part of their
portfolio, is that waiting until you need the puts can be very costly. That's
especially true when the decline begins suddenly and demand overwhelms supply.
Instead of following an advisor who made money last month, last week, or yesterday, it makes far more sense for each investor to adopt a long-term basic methodology for putting his/her money to work.
USING OPTIONS
One of the best ways for investors to have a less rocky ride -- as markets soar and plunge -- is to use options as a risk-reducing investment hedge.
One such strategy is buying puts as portfolio protection. If you like that idea, it is essential to have those options in your portfolio before the decline picks up steam. The reason why this is so important concerns the way that options are priced. If you are new to the options world, then the simple explanation is as follows:
Option prices are based on several factors, such as the stock price and the strike price of the options. However, the most important factor in option pricing is the expectation of just how volatile the market is expected to be in the future. When markets are calm or rising, most traders see little reason to expect market volatility to suddenly increase. For that reason, there is no special demand to buy options, and the supply is sufficient to match the demand.
As a result, option premium (price of options in the marketplace) makes it painless to buy options.
The problem is that, most traders/investors see no need to own options when markets are calm.
When markets are falling, investors tend to get nervous. Because markets (on average) fall faster than they rally, whenever any decline threatens investors with large losses, (think late 2008 or Jan 2016), there is suddenly a demand for put options.
Unfortunately for people who want to buy those options, the supply diminishes and it becomes necessary to pay much higher prices to get any options. There are two reasons for that. First, as stocks decline, puts are worth more. (Think about a stock that falls from 90 to 85. The right to sell stock at a specific price, a put option, is worth more when the stock is 85 than when it is 90). Second, fear that markets will become more volatile and that the decline will continue makes people raise their volatility estimates for the future. And volatility plays a very large role in the price of options.
Those who wait to buy options until a decline is well underway are forced to pay big prices for their put options. And the price increases are not trivial. Using the CBOE Options Calculator for a stock priced at $100 per share, and paying no dividend, compare the estimated future volatility (referred to as the implied volatility of the option) of put options vs. the calculated fair value of the option.
IMPLIED VOL VS. OPTION PREMIUM
|
IV
|
Premium
|
|
20
|
$ 3.91
|
|
30
|
$ 5.89
|
|
40
|
$ 7.86
|
|
50
|
$ 9.83
|
|
60
|
$11.79
|
|
70
|
$13.74
|
Friday, 22 January 2016
DON'T LET THE MARKET'S VOLATILITY SEND YOU INTO PANIC MODE
No one can argue with the fact
that we’ve seen extreme volatility in the stock market over the past
week. At times like this, it’s not uncommon to feel fear and panic.
We’re all human and too many of us have lived through challenging financial
crises in the past. While I can’t predict the future or tell you
definitively that everything is going to absolutely be alright, I think it’s
critically important to keep a few things in mind during this time.
WHAT'S CAUSING THE VOLATILITY?
First, it’s important to
understand why the stock market is acting this way. Fundamentally, the U.S.
economy is doing well. But due to a confluence of events including fears
of a slowdown in China, currency devaluation from emerging market countries
(China, Vietnam, Kazakhstan, etc.), and uncertainty about the Fed’s pending
rate decision, the market has seen a huge sell-off.
In
addition to these events, our market is finally nearing correction territory,
and this is a correction that is long overdue.
UNDERSTANDING STOCK MARKET CORRECTIONS
Corrections are a lot like a
circuit breaker. They usually occur when a hot market gets hit with
worrisome news- such events cause the market to pause and fall back as
institutional and individual investors reassess their positions based on the
new information. These respites are actually good for the market.
Looking back to historical data beginning with the year 1928, the market
typically undergoes a five percent correction about every 10 weeks, and a 10
percent correction every 33 weeks. Our research shows that the market has not
seen a full 10% correction in 46 months, which is the third longest in history,
so we are definitely due.
Thursday, 21 January 2016
IRON CONDOR
The iron condor is a strategy that can be a good
introduction for beginning options traders to option selling. It can be a
relatively safe way to sell options because you can’t lose on both sides of the
trade. Here, you pick a likely trading range for an underlying asset and sell
out-of-the-money option spreads around that range, “If you collect a total
premium of $2 for selling two $5-wide spreads – both an out-of-the-money call
spread and an out-of-the-money put spread, your total risk is only $3 because
the commodity can’t go through both spreads at expiration. You have spread the
risk across a wider range of possible prices. If your trading range thesis
changes or volatility explodes and threatens to put one of the spreads
in-the-money, you can exit one or both spreads at any time. Collecting $2
against $3 of risk offers you a potential return on risk of 67%”.
The market outlook for the iron condor is neutral. “You’re trying to be strategic with your use of leverage. You’re trying to be systematic and probability minded, looking at what the best odds in the long run [are] if you did this consistently,”.
An iron condor can be entered from the short side or the long side, explains Charlie
The market outlook for the iron condor is neutral. “You’re trying to be strategic with your use of leverage. You’re trying to be systematic and probability minded, looking at what the best odds in the long run [are] if you did this consistently,”.
An iron condor can be entered from the short side or the long side, explains Charlie
“A trader who enters a short iron
condor is looking to profit from a range bound underlying asset. As long as the
underlying asset stays within the inside strikes by expiration, the trade will
be profitable. If it moves outside of the inside strikes by expiration, the
trader will take a loss, which could be as high as the difference between the
sold call/put and the purchased call/put”. A trader who enters a long iron
condor is looking for the exact opposite, or, a large move in one direction or
the other by expiration.
Dos and don’ts
As with any type of trading, with beginning options strategies, having a trading plan and having an exit strategy are crucial. “Everybody has a plan for when to get into a particular stock or index, but few think it through to the point of when to take profits or cut losses”.
As with any type of trading, with beginning options strategies, having a trading plan and having an exit strategy are crucial. “Everybody has a plan for when to get into a particular stock or index, but few think it through to the point of when to take profits or cut losses”.
Subscribe to:
Posts (Atom)