Reason 1: Technical Analysis cannot predict the future People who say Technical Analysis does not work think TA is a tool to predict the future. I must admit I was one of them. Obviously, no one can predict the future. What people misunderstand is that TA is a tool to provide “actionable points” in the […]
Do you want to read the VIX? A quick answer is to watch the S&P 500 movement and its options. They have a strong inverse correlation. However, VIX also exhibits an interesting weekly pattern. Have you ever noticed that VIX seems to go lower on Fridays (VIX Weekend effect) and jump back higher on Mondays […]
I bet you probably thought this was going to be another “buy VIX future or options to prepare for a market crash” article. Sorry to disappoint you but I am not going to recommend that in this article. What I will discuss though, is provide some examples of how using VIX, VIX9D, VIX3M, and VIX6M […]
It’s that time of the year again when stocks typically underperform. The end of Summer and the beginning of Fall. Don’t ask me why but that’s what the data tells us (see graphs below). There are multiple theories as to why this happens every year and as a human, we like to attach a simple […]
After the recent minor market corrections largely due to inflation fear, I have seen so many people discussing and asking what they should do with their losing positions on various online forums. I feel for them because I used to be one of them. This doesn’t mean I don’t hesitate any more and just close […]
Are you a trader looking for a strategy that can provide recurring income? Then the options wheel strategy might be just what you need. This popular trading technique involves using option contracts to generate consistent profits from underlying stocks. Understanding the Wheel Strategy Step 1: Sell a Put Option – The first step in the […]
December typically is when everybody slows down and celebrates holidays. So naturally one would think the market volatility should also decline in December. I decided to do a quick calculation with VIX historical data (2004 – 2017) to find out if VIX has always gone down in December from November. While the calculation methods I […]
Short-selling PUT is done when one is expecting the underlying equity would go up. I know open positions in anticipation of VXX going up is not a good strategy in the long run. VIX and VIX ETPs are most of the time in contango, so a question I had was “Would option time decay be […]
What is the Tasty Trade Options Trading Method? The Tasty Trade options trading method emphasizes the importance of trading high implied volatility and selling premium. This approach advocates for the selling of options because they believe that, over time, options tend to be overpriced. So, by selling premium, traders can take advantage of the rapid […]
While doing some research on how to sell Iron Condor in a low volatility environment, I came across to a video that talks about time decay made by Tastytrade. The image below is taken from the video and it shows Theta (time decay) against Days to Expiration (DTE). When it’s 75 DTE, 90% Out of the […]
I know there are people out there who manage to make a consistent 20% return by just simply selling options on major indexes such as SPX and/or SPY continuously with the Iron Condor strategy. One question I had was about Implied Volatility. Would such trades still work even in the low IV environment? Logically, it […]