As an options trader, I’ve never understood why professional “talking heads” rarely, if ever, mention the topic of probabilities. Wouldn’t you prefer to know the probability of a stock hitting a certain price? It certainly seems logical. Yet, I rarely hear investors, professional or otherwise, talk about statistics of any kind. It’s unfortunate. We always… Read more »
I use a wide variety of tools when trading options, particularly when using options selling strategies. But there are only a few that I use with each and every trade I place. One of those tools is the Expected Move, also known as the Expected Range. As a quantitative trader who uses predominantly options selling… Read more »
The foundation of all quantitative or statistically-based options traders rests on one statistical law – The Law of Large Numbers. The Law of Large Numbers states that as you increase your sample size, in our case number of trades, our expected value or probability of success will come to fruition. This is because the Central… Read more »