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My Story and Risk Management
I repeatedly write about the importance of risk management when trading options. Believe me when I tell you that I understand how much most of you are tired of reading about it. How can I know that? Because I've been in your shoes.I firmly believe that if you don't pay much attention to what...
Is Current Value of a Long-Term Investment Important?
Mike, at The Oblivious Investor had an interesting post on 'sunk costs.' I joined in the commentary, and Mike has graciously given permission for me to use those comments here.*** For somebody with a long investment time line (30+ years) does it really matter if the investment is performing...
Learning to Trade Options
In your attempt to search the Internet, looking for ideas on how to successfully begin trading options, you landed here. You are in the right place. Here are some tips on how to get started. Some may seem obvious, but the purpose of this post is to save the options rookie from unnecessary...
Buying Puts vs. Selling Calls. An Explanation for Rookies.
I received an e-mail question from a reader who is first learning about options. His question is very basic, and I'm glad he asked the question. It's important for everyone to understand the most basic concepts of options and how to use them. For those of you who find this question too...
Using Options to Create a Steady Income Stream
Mark, Will there be a follow up to your Rookie's Guide To Options book that will go over more advanced concepts? I'm thinking to describe about various issues in managing a monthly income portfolio. Thanks, Art Your Browser does not support iframes. Thanks Art for leaving the above
Avoiding Early Assignment
This video states that 'it costs you nothing' to short stock. Be aware that some brokers charge a fee when you hold a short stock position - and if the stock is difficult to borrow, the fee can be very stiff.
Being Assigned an Exerice Notice; Any Problems?
Yesterday's post discussed what happens when you are assigned an exercise notice.My premise is that it's seldom a problem.I'd appreciate hearing some of your experiences to see if my perception of the world agrees with your experiences: [I'm still trying to find the right polling website to...
Q & A. Trading Options: Exercise and Assignment
Via email: "Would like more on the perils of assignment."One of the recurring topics I encounter is anew option trader's concern about being assigned an exercise notice on some option he/she has sold.There are situations in which being assigned results in an unhappy ending, but they are few are...
Options Trading: Selecting the Expiration Date II
I apologize for the mistakenly published earlier posts. The weekend was just too busy. Your Browser does not support iframes. Part I set the background.Now it's time to consider which factors are important to the trader and this time I'll answer the question: When establishing a positive theta,...
CBOE Volatility Index (VIX) Data
For years, I've been publishing, and updating weekly, a graph of VIX closing prices at my website.The current graph represents data from Jan 2007 through the present time. I find that most option traders are interested in this data because it allows them to get a sense of where VIX is, compared...
Q & A. Timing the Market
Updated two hours laterMark, On timing- here's a simple style I've had good luck with: When you "see" a trade, initially execute and things don't start happening as hoped for (immediately) then it's time for a very simple (usually very cheap at that point) adjustment: Get out! I'd be really...
Rism Management on a Larger Scale
I discuss the importance of risk management so frequently that I'm sure some readers are tired of hearing about it.On the other hand, I get enough e-mails from readers who thank me for spending so much time on that topic. When I write about risk, I'm looking at it from the point of view of...
General Motures and Failure
In response to a couple of blog comments, this is my reply. There's nothing we can do. So many are responsible for the GM disaster, but primarily I blame the company and those who worked there. GM executives refused to adapt to reality, and with the survival of the fittest came the destruction...
My Philosophy of Options Trading II
Part I Part II. It's Your Money.Protect It. This topic is one I take very seriously and I admit that I have difficulty convincing people of the truth of the following statement: When you own a position, unless there is something very unusual about the current option prices (that will be...
