Education Center
Where can I find the VIX and Put/Call ratio intraday?
eSignal allows you to chart the VIX. Symbol: $VIX. It does not carry the put/call ratios, but they are going to look at doing that based upon our request.
How can I determine if the volume of the day (or intraday) is from buyers or sellers? Is this indicator available or do you just assume based on the price going up or down? I know that Level II quotes give a picture of the current queue. This may be irrelevant if the price is all I should be concerned about.
Generally, if a stock is moving up on strong volume, it is an indication that there are more buyers than sellers of the stock. Otherwise, the stock would not be rising. The buyers have the edge. You are correct that you can look at the Level II for a particular stock you can get a […]
I have been trading options for a number of years, but I have never traded a credit or debit spread. If I write an out of the money put and buy a further out of the money put and the price of the stock goes below the put that I have written am I stuck with buying the stock at the strike price?
If you do nothing at expiration or the stock is put to you before expiration, yes you will have to buy the stock at the strike price of the put you sold. If the stock’s price is between the strike of the put you sold and the strike of the put you bought, at expiration, […]
I notice you advocate 7-8% stop loss orders after purchase. As the position works out do you recommend adjusting the stop loss to maintain the 7-8% or something else?
Absolutely. Let’s say we buy a stock on a breakout. We will put in our stop loss at 7% or 8% below where we bought the stock. That is automatic when we enter the position. Then the stock starts to run up. If the volume is strong and the stock is really climbing, we move […]
I believe that your recommendation strategies below are for both for buying stocks and options. I only know how to buy stocks. I didn’t seem to able to distinguish your advice from stocks to options. Can you help me out here? Thanks.
Our strategies refer to both stock and option buys. You can do one, the other or both. When we say a buy point on a bullish play is at a certain price, that refers to the stock price. That buy point is used for stock buys as well as option buys as option value is […]
You talk about selling calls on long-term positions and then buying them back. How does that work? Right now I have 200 shares of JDSU. As you have noted the stock has been weak of late. There is an analyst meeting on 9/12, which I hope will boost the stock. I am willing to sell some December 135’s. If the stock were to go down can I buy these back for a profit? If so do I sell to open or close, and then conversely buy to open or close. If the stock goes up I am happy with selling the stock at $135. So, is this a way to hedge my position.
As we alluded to in the summary, we have been selling calls on our long term holdings as the market started to pull back once again. This invariably happens, so it is good to know how to make money on the stocks you currently hold and want to hang onto when they do pull back. […]
After reading Subscriber Questions on stocks & options I have a question. Were can I find out how much an option will go up (or down) as compared to the stock price?
This is called an option’s delta. It is the measure of the option’s movement in relation to the stock’s movement. As with the previous question, we cover it extensively in the Q&A section in the members section on the website. Search for ‘delta’ by hitting control ‘f’. The second hit is a direct link to […]
I really enjoy your comments and have learned a lot about the markets over the past few months. I would like to know if when you select options you give any thought to the option’s intrinsic value and time value, i.e., do you want a certain percentage one way or the other? Thanks again for great advice.
We never like to pay a lot for the portion of the option price that is out of the money. The cost of that portion is determined by a number of factors with time and volatility being the most important. That is one reason we prefer to buy options further in the money than most […]
When you list a certain credit for a spread but the stock moves up and the spread is no longer there, do you continue to chase it or pass?
Great question. Spreads are a bit different beast as we let the broker work the spread for us, selling the put and buying the put to get the right spread. We try to get at least 1.25 out of a spread at a minimum unless there are just days left. With a month left, if […]
In the Daily you recently mentioned realtime services and in particular eSignal, which seems to be your preferred one. I have been using PCQuote 6.0 . . . I never heard you mentioning it, though, which makes me wonder; is it because you don’t know about it or because you consider its service poor (doesn’t look like it to me, although it might be considered pricey). [C]ould you please tell me how does it compare with eSignal?
PCQuote has an impressive package similar to that of eSignal. Its top-line package has many of the same features. What I don’t like about it is how it comes piecemeal (you have to pay for 8 or more services to get the whole package), it is really expensive, and each package does not have the […]
