The option trader s guide to probability volatility and timing phần 10 pps

... levels of the National Association of Securities Dealers Automated Quotations System (Nasdaq). Level I quotes provide basic in- formation such as the best bids and asks for Nasdaq-listed stocks. ... opposite transaction. running stops When quoted, floor traders use these to move the market. When stops are bunched together, traders may move the market in order to activate stop ord...

Ngày tải lên: 09/08/2014, 16:20

... Those who succeed consistently in the long run are those who make the effort and take the time to learn the skills re- quired to achieve lasting success. They apply these lessons in the real world, ... B OPTION EXCHANGES, OPTION BROKERS, OPTION SYMBOLS, AND OPTION VOLUME 255 Exchanges Options are traded at each of the exchanges listed in Tables B.1 and B.2. Table...

Ngày tải lên: 09/08/2014, 16:20

... options traders should combine the values of the Greeks used to create the optimal options spread. The result will allow the trader to more accurately assess the risks of any given options spread. Understanding ... of the deltas of options. Professional options traders think in terms of spreads and they hedge themselves to stay neutral on market direction. The direct...

Ngày tải lên: 09/08/2014, 16:20

... ridiculous price multiples due to continued up- grades by analysts as the stock prices went into the stratosphere? How many investors still own those stocks today under $10 a share? Do you think the ... it seems to me that prayer is truly the method most often used by traders and investors. Most traders and investors do very little analysis and have no idea as to what is...

Ngày tải lên: 09/08/2014, 16:20

... points. In other words, if Toys “R” Us falls to 10. 04 or rises to 21.33 at any time during the next three months, this would constitute a statistically significant move for this stock. As a result, ... in the implied volatility of the option bought versus that of the option sold. This underscores the importance of having as wide a spread as possible between the volati...

Ngày tải lên: 09/08/2014, 16:21

... rewards. Stories about the large sums of money to be made and the successes of the rich and famous inspire a desire to achieve the same level of financial success. Just as it is a business s objective ... investors a way to buy and sell shares that represent entire baskets of stocks. In the case of Spiders, the basket of stocks represents the companies included withi...

Ngày tải lên: 09/08/2014, 16:20

... increased, sell (to close) the option at a profit. Hence, purchasing a call option has a limited risk because the most you stand to lose is the premium paid for the option plus commissions paid to the ... selling stock. As previously discussed, going short is the process of borrowing shares from your bro- ker and then replacing these shares at a future date when the...

Ngày tải lên: 09/08/2014, 16:20

... the short stock position if you wish. • The price of the stock rises above the initial stock price, but stays below the breakeven: The short stock position starts to lose money, but this loss ... sell another call to offset your risk. • The stock falls below the initial stock price but stays above the breakeven: The long stock position starts to lose money, but this...

Ngày tải lên: 09/08/2014, 16:20

... that case, the loss is equal to the commissions paid for the trade. On the other hand, if the stock falls sharply, the losses can be substantial. The downside breakeven is equal to: higher strike ... Losses begin to develop as the stock moves below the breakeven and are limited to the stock falling to zero. In this case, if the stock falls to zero, one short...

Ngày tải lên: 09/08/2014, 16:20

... calls to the upside and the short shares to the downside). Re- member, as long as you use long options—puts or calls—it is a long synthetic straddle. I prefer to use ATM options because they have ... decisions. As in any profession, there are top-notch pro- fessionals as well as others who have missed their calling and should not be offering their services. The best advice I...

Ngày tải lên: 09/08/2014, 16:20