I like to try and call tops and bottoms – but as all of you experienced traders know, calling the exact top and bottom and posturing your trades around that exact time tend to be losing propositions. (more…)
Molina Healthcare beat earnings after the bell last night and raised FY guidance. All insurance plan stocks are up on the news. There are 2 companies left to report, and I’m going long both of them (more…)
After several years of non-stop monetary stimulus and pump-priming, investors have been well conditioned to account for Fed action as one of the key, if not the primary, drivers of asset prices. But one has to wonder if this conditioning has not reached Pavlovian levels when, after the Fed announced an extension of its easing programs, the market sold off slightly because it was perceived as not being enough. To get a sense of just how fantastically odd this market environment has become, Bank of America recently said that the main risk for stocks in 2013 is a rapidly improving economy, as this would prompt the central bank to let off the QE throttle or shorten the time frame that it had originally set for its near-zero interest rate policy and bond purchasing programs. Read that again: the most significant threat to stocks is an improving economy. And this assessment comes from a firm that has been one of the more bullish to date. The implications for fundamentally-oriented investors are profound. (more…)
OK I know that most of the VIX derivative ETFs are controversial and I think many of them are almost entirely traded by novices who don’t understand how futures work. However, I have enough hubris to believe that I understand it enough to amke a rational bet. (more…)
I can’t take credit for the concept of this trade, as I read it on Steven Place’s twitter feed this morning (but I have a slightly modified version of it, in that I am using the SPY instead of the /ES futures to trade it). See Steven’s explanation at this link: (more…)
Per my trade long IWM puts, I have been noticing large amounts of puts being bought in the near month expiration contracts of the IWM and SPY. This is lifting implied volatility market wide. (more…)
What you really have at risk in a specific trade is often a function of whether you are long or short, and how quickly you think you can get out of a bad trade. (more…)
As a technical indicator the VIX is arguably the best gauge of overall market risk and trader sentiment available to the investing public. In this article we introduce you to the VIX to help you understand what it is and how to trade it.
Implied volatility can be used to adjust your risk control and trigger trades. The concept of implied volatility is simple to understand but hard to predict. In this article we talk about how IV changes prices and why this matters to investors.
Watching the Oil VIX (OVX) can help you identify potential reversal points in the price of oil. The Oil VIX is positively correlated with the price of oil.
