You are correct that in our system an option can be exercised at any time before expiration unlike the English system where they are exercised on the day of expiration. Thus anytime an option is in the money, the odds of it being exercised increase. The odds of being called out are greatest closer to […]
One thing we always like to do is scan for stocks that are approaching a 52-week or greater high. This helps us look at stocks that are outperforming the market. We like these because they are doing something right or are being favored for one reason or another. Another important point is that in an […]
One of the things about covered calls is that you should, just as with other positions, keep stop losses of some sort (we use mental) in place. You are correct, a stock can still tank in a covered position just as with any other. What happens when the stock falls in value? The option does […]
Doji is a Japanese term as candlestick charting originated in Japan as a method of predicting price movements in the rice market. As such it is not an acronym but a word used to describe where the open and close prices are nearly equal and thus indicate a potential change in momentum.
Intraday moves in the market result from any number of variables, e.g., a test of support or some news item. There were some strange goings on in Florida early that had an impact on the market as well as more hawkish comments about war with Iraq. When an event occurs that impacts investors, you see […]
Great question. There are two ways to look at options: the current option value and/or the option value versus the underlying security or index value. When we deal with our options we look at them two ways, a kind of blend of the option price and the underlying equity price. First and foremost to us, […]
Yes if we see a really good short with no option chain or if we really like the short but the options do not have a good price/delta/anticipated fall mix (i.e., given the price and delta and how far it could fall, the return is not good enough for the risk). One of the reasons […]
You could very well be right at least in part. There is an awful lot of selling ongoing, but there is also hedging always taking place. A lack of confidence that the market will go up can result in selling (either long term positions or selling short) or hedging to cover long term positions. This […]
This is not available on a daily basis but is produced once each week. The information is compiled by Investors Intelligence and is released on Wednesday. You can find it in publications such as Investor’s Business Daily.
There is an adage in the market that gaps must be filled before further progress can be made. Think about what has recently been happening on the downside (before late last week): stocks would gap below support (50 day MVA, etc.) and sell lower. Then they would rally back up to fill the gap, testing […]
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