May 22, 2017

Another Good Year for Option Trading

A few random thoughts... There is no doubt that 2013 started off on a difficult note. The fiscal cliff led to a sharp decline in implied volatility (as seen through the VIX) and the low IV environment lasted for several more months. However, we were able to adjust and the rest of the year, while having a few expected bumps in the road, ended on a positive note. So much so, that our option trading strategies once again beat the overall market. I'm not sure many other options sellers can say that this year. As the year progressed I became more and more selective with my trades. Trading in a low IV environment is difficult and hammering out trades just isn't the right protocol especially if you truly want to make a decent return. Of … [Read more...]

Market Sets Record

What a day! According to Jason Goepfert, Tuesday was "the best day in 30 years." "The buying stampede resulted in just under 98% of all volume being transacted in stocks that were positive on the day." The highest ever. Historically, after large Up Volume days the market consolidates and I would expect that this time would be no different. All of the ETFs I follow have pushed back into neutral territory and several of the major market benchmarks are very close to a overbought state. With that being said, I intend to add a credit spread in the Theta Driver strategy tomorrow and depending on the price action tomorrow I might just add a position in the High-Probability, Mean-Reversion strategy. Subscribers stay … [Read more...]