How to Make 40% a Year Betting on the Market, Even if it Doesn’t Go Up
“Here is the trade I made last week when SPY was trading about $225:
- Buy to Open 1 SPY 19Jan18 220 put (SPY180119P220)
- Sell to Open 1 SPY 19Jan18 225 put (SPY180119P225) for a credit of $1.95 (selling a vertical)”
Vertical put (bullish call spread) strategy to gain 40% in 13 months
If you’ve traded actively for at least a few months or years, you’ll know all too often the agony that comes with getting stopped out of a position and immediately, the trade takes off. A similar but lesser form of agony is felt when a trade has hit your price target and you proudly sell your position. Except, it keeps going and going…
Options trading can appear intimidating to some traders. To make money, you must understand how option values fluctuate, the risks of option positions and the regulations pertaining to option expiration. You can have option positions that expire after periods ranging from one day to more than a year. Understanding the mechanics of option expiration will save you from unpleasant surprises. Continue reading
In the new version we have unified the format of the options series codes. Now, the codes are displayed in a unified format for all elements in the interface.
Also we have made minor changes in the what-if scenarios functionality, exchange visibility configuration window and accounts visibility configuration window.
The description of these and other changes can be found in this article.
“Fed Turns Hawkish, by Tim Duy: The FOMC raised the target range for the federal funds rate by 25bp today, as expected. But the tone of the press conference and the summary of economic projections were more hawkish than I anticipated. The Fed is shifting gears, a shift I did not expect until more data piled up in the first quarter of 2017.”
Fed surprises market by turning more hawkish faster resulting in a pause in the rally.
Sometimes to get information about the operating system or a particular software work, we need to explore the Windows events log. Continue reading
There is nothing so disastrous as a rational investment policy in an irrational world – John Keynes
Trump’s victory surprised even the most well-informed financial analysts and bloggers. A quick scan of the headlines leading up to the elections showed endless articles which pontificated what a Hillary presidency would mean for markets. And those few articles which did venture a guess at what a possible Trump aftermath would look like seem even more ridiculous now in hindsight:
- Barclays – 6% fall in the S&P 500 before a partial recovery by year-end
- Citi – 5% drop in S&P 500
- RBC Capital Markets – 10% to 12% fall in the S&P 500
- Wolfers,an economics professor at Dartmouth College – 12% off the S&P 500
In the first part of this article, I briefly discussed a rather painful early trading experience during the financial crises in 2007/2008. I was short and still somehow killed my account.
I let my emotions dominate my trades earlier in my career. My self-worth was tied to each dollar made or lost. I was many things back then. Too eager, too risk-loving, too young.
Eventually, learned that my trading career is like a war that never ends. Every minute of trading is a battle with others trying to separate me from my money. If we fail to manage our emotions, we become easy targets. After blowing up my account multiple times, I learned some very painful lessons.
As promised, I will share with you my framework to keep psychologically sane while trading and also what to do when off balance. Continue reading
I was 24 years old and it was July 2007. I was sitting on the fixed income trading floor of BNP Paribas at the time and was just itching to take a big short on the stock market. Equities had been rallying in the face of a crashing fixed income market. It was like smiling into the fist of a much younger Mike Tyson.
I finally pulled the trigger after months of waiting and shorted as much high beta stocks my margin would allow. After all, that’s how the legendary Jesse Livermore used to do it right? I doubled my money in a matter of weeks and was on an emotional high. I truly believed I had found my calling in life.