Linkedin (LNKD) has made a great move in the last month from 109 to 126. Right now, its trading at 125.8, but it trades in $5 strikes, so to get a straddle or strangle will skew the Delta to one side. The Weeklys expiring this week have premium, so the trade is Short Straddle, …
Anyone that’s ever traded the VIX Options would have experienced some strange behavior that defies traditional Options models. The VIX skyrockets, but your VIX calls are not making money – this is by far the most common occurrence. The simple answer is that VIX Options are priced off the VIX Futures contract because there is …
A Volatility Index of the Volatility Index – meet the VVIX Read More »
There was some interest in the concept of Options Pinning strategies on various posts – so I tried an experiment with this concept. Last Friday, with some spectacular results. Pinning is a concept in the Option markets where Stocks, ETFs or Index Options are “pinned” down to a certain strike price, which in general also coincides with a round number – For example AAPL got pinned at 520 on Friday, GOOG got pinned at 540. The Pinning phenomenon works because big hedge funds and Prop traders have exposure at certain strike prices in the Options markets, and it is in their advantage to see expiry happen very close to these strikes.
Anybody watching BIDU in the last 6 weeks or so deserves to be in the doghouse if they didn’t take a bullish trade (myself included). It bounced strongly off a bottom of 85, and it gave good entry points at 90, 95 and more. Sadly, I missed this one and by the time I saw it, it was $100 already. The risk to reward at that point didn’t seem favorable, but its at 110 today. Talk about a slap in the face.
Amazon (AMZN) reports earnings on January 31, and this is an Amazon Earnings Trade. Although AMZN just hit all-time highs yesterday, it’s still a wild card – Earnings could be a hit or miss. Under these circumstances, it’s best not to take a directional bet. The Feb series has seen Volatility expanding to 40 already, and I think its reasonable to assume it will increase further leading upto the earnings event, which is still over 3 weeks away.
Will the markets get a catalyst to make this downward move ? Could it be the debt ceiling negotiations in March and / or any more downgrades of the US ? Or could it be something else geo-political ? Of course, we don’t know. But 2013 shows all the signs of being a pivotal year for global markets.
Get access to Free Courses, E-Books, Market Updates and 500+ Video Library.
Futures and Options carry risk and may not be suitable for everyone. OptionTiger is an educational site, and is not a financial adviser or broker. If you need professional investment advice, please consult a registered investment adviser. All stocks, ETFs, commodities, Indices and other securities mentioned in our courses are for educational and illustrative purposes only, including all mention of Returns, Margin Calculations, and different Margin types. By visiting our site and accessing material, you are implicitly agreeing to these terms.
Copyright © 2012 to 2023 – All Rights Reserved by OptionTiger.com
