Options Investment Strategies
How do you get invested in market volatility $VIX
There this site Vix and more which i came across as being a good guide to options and all things volatility of the market.
This week there is an article on how one can take advantage of volatility as a hedging function or as an opportunistic bet:
Fortunately, there are a number of VIX derivatives that allow [...]
Double Top VIX
Recently, markets have been trending aimlessly, flirting between support and resistance. Granted this is the best market for Iron Condor trades, but the volatility could easily burst any legs within a week. I have not look at any condor trades but might start looking. I met up with an old pal of mine and he [...]
Covered Bond: Solution to the crisis?
We heard about covered calls, but covered bonds? Portfolio.com have an article explaining briefly how this works:
Banks have assets and liabilities. If the bank borrows money from individuals, the liabilities are called “deposits”. Alternatively, the bank can borrow money from other banks, in the interbank market, or from the Federal Reserve. All of those borrowings [...]
Understanding Options – Profit (loss) vs Price Graphs
Option overview
An option is a right to buy or sell an asset for a specified price and time.Let’s say you want to by a TV on sale at Wal-Mart. You drive there only to find out that it’s "sold out". So you go to the clerk and ask for a "rain check".
This "rain check" [...]
Butterfly Spread explained
The butterfly spread is a neutral strategy that is a combination of a bull spread and a bear spread. It is a limited profit, limited risk options strategy. There are 3 striking prices involved in a butterfly spread and it can be constructed using calls or puts.
Long Call Butterfly
Long butterflies are entered when the [...]
Iron Condor explained
The iron condor is a neutral strategy that is a combination of a bull put spread and a bear call spread. It is a limited risk, limited profit trading strategy that is structured for a larger probability of earning smaller limited profit when the underlying stock is perceived to have a low volatility.
To setup [...]
Iron Butterfly explained
The iron butterfly spread is a neutral strategy that is a combination of a bull put spread and a bear call spread. It is a limited risk, limited profit trading strategy that is structured for a larger probability of earning smaller limited profit when the underlying stock is perceived to have a low [...]
Why isn’t there any Call Examples for BWB
On a question on why most of his examples are on Put BWB, Scott Answers:
I have not done any call BWB’s for several reasons
1.I have been trying to keep them consistent for learning purposes. Had I done them with calls I would be hearing “why didn’t I do them with puts?”
2.During periods of low volatility [...]
The Butterfly vs. the Broken Wing Butterfly
By Scott Kramer, Optionetics.com
Published: November 15, 2006 12:30 PM EST
Many, many people have been asking about the difference between a butterfly spread and a broken wing butterfly. Others have also written that they understand the difference in theory but not practice. In an attempt to clarify the matter, something I am not particularly good at, [...]
