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Since alpha is a measure of yield in relation to benchmark, beta is the measure of risk in comparison to the market. If you sustain your beta less than 1 and alpha more than 1 for more than 2+ years, you're a genius.:)

A measure of performance on a risk-adjusted basis. Alpha takes the volatility (price risk) of a mutual fund and compares its risk-adjusted performance to a benchmark index. The excess return of the fund relative to the return of the benchmark index is a fund's alpha. 2. The abnormal rate of...

Any more thoughts?

Alpha is a measure of an excess return. It's really very important. Every portfolio manager should set a goal to earn a large alpha.

So, what's the way your trade?

Easy money is in the paradise (if you really need money there :D :D ) and nowhere in the world. Otherwise, everyone would have traded only VIX and nothing more.

Here is the beginning of the article: "In this post I am going to provide some tips and infromation about how to form yourself as a successful system trader. Why system? Trading systems are the best way to control yourself from different biases that lead to bad investment decisions. You force...

If you really want to, I advise you bloomberg or just thinkorswim platfrom. They have a live news feature. But I think that trading news is practically impossible unless you are a floor trader. I wanted to do that myself, and it was a total failure and it doesn't matter whether you use...

I have recently discovered that Lehman 3$ and 4$ call options have significantly higher implied volatilities. I suppose this indicates that traders are willling to pay more for the calls? So, they're waiting for the rebound?

Do you have any additions? Any ideas? Comments?

I suppose that the domino effect which you have mentioned has already started with Bear Stearns bankruptcy.

Lehman Brothers, Inc (NYSE:LEH) has recently announced its plans for the nearest future: plans how to avoid bankruptcy and save life of the company. During the last week we have seen a significant decrease in the LEH stock price. Since 08/09/08 the stock price has declined from 17.73$ (high) to...

You're right! That's very efficient way to overcome overconfidence. I use it myself :)

Yeah, thanks. Stop limit orders do not suit here. Right.

Feel free to express your opinion, say what biases you are susceptible to...

Well, I agree that naked puts selling strategy depends much on the chance. It can bring you serious losses, yes, but only if you do not control your losses. stop losses can be used in options trading. If you sold an October 2$ put you may place a buy stop or a stop limit order at 3$. So if the...

Sorry, forgot to post a link. here it is.

I suggest ivolatility.com but their services aren't free

Hello, The article is long, so I will post it partly. Representativeness Bias: The Basics: It’s common for every person to process new information, new phenomenon or some new idea through their past knowledge or experience. Many investors tend to evaluate the probabilities based...