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Heh. Its a tough crowd for a tough business. Its probably easier to get $90,000 than it ought to be. The big question is, what makes you think you can trade with a positive expectacy ? Have you done any work to see if you can indeed turn a profit over the long run ? What will cause...

The way I was taught was to brute force the IV using Black Shcholes using something like the Bisection method. Its my understanding that there are no exact formulas that allow you to compute BS IV for all options, hence the need for something like Bisection or Newtons method...

I dont have any fixed income trading experience, but I do know a little bit about modeling fixed income. In fixed income, there are lots of models with fancy sounding names like "Cox-Ingersoll-Ross", the "Vasicek model", "Ho Lee Model", "Hull White mode", etc. These models are...

For the record, I never advised shorting nor shorted myself. I just saw the head and shoulders top forming and figured I'd start a thread. I can think of a quite a few trading strategies that one could use to play a retracement other than just outright shorting the underlying: A) Shorting...

Well, since I started the thread, I'll keep the charts going. On the 60 min charts, we seem to have a short term double bottom. First bounce was 8/11 @ 10:30 AM. That was followed with a minor rally, a drop in prices and a hitting of the second point of the double bottom at 8/12 11:30 AM. The...

And a longer term view.

Well, it looks like we broke the support level at the end of the day. Guess we'll soon see if prices start to slide !

Or a simple example. The stock is trading at 90. The 100 call with 1 month left is trading for $0.48. You decide to buy 100 shares for $9000 and sell the call for $48. Your entry to the covered call cost you $8952, net debit. Lets look at what happens if you hold the position to...

Do you know where that story is from ? I'm taking a stock trading class and the instructor made a reference to that a couple weeks ago. I wouldnt mind reading the full story. Thanks, Tony

OK, first things first: 1) I know bupkis about fundamental analysis. 2) I tend not to make calls on individual stocks That aside, I was going through charts today, and came upon a recent GOOG chart. Between A) The short term trend break B) The failed recent attempt to make a...

Hey All, I know very little about the actual procedures about how stocks trade in the US. What little I've done to date in trading has been with futures. I'd like to learn more about stocks, but they seem more confusing. For example: * How does the NYSE work ? * How do the...

Gamma and theta are the greeks that traditionally oppose each other. When you are long gamma, you are saying you need the market to move to make money. That is, as stated previously, you are long options. If you buy an OTM call or put and the market doesnt move, kiss your premium...

My recommendation for any specific contract would be to find the website for the exchange the option trades on. All the majors will have stuff you can download to get the exact details for a particular contracts settlement procedures. Once you know how the contract works, check with your...

Hey all, Does anyone know how I can pull up an option chain for a futures contract? I'm playing around with the YM futures contract. From an Options Analysis window, I tried "YM", "@YM" and "YMM05" for the underlying and I keep getting "Invalid Symbol". Thanks in Advance, Tony

Taking tests for fun ? You need to get out of the house..... :D J/k I'm sure different people have different ways of studying, but I found the princeton review book to be sufficient prep material...

You are going short to minimize your delta exposure. For example, I have Honeywell options up on my screen right now. A June HON 37.5 Call has a delta of 46.13, Put -52.41. If you bought one call, your position delta would be 46.13. You could then go short 46 shares of honeywell...

Hey All, I was doing some research today between options prices, stock prices and single stock future prices. I noticed that GM had some peculiarites in its data. The vol skew on the options had the puts trading at a much higer implied vol than the calls. I also noticed a huge bid...

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The rule of thumb I learned is: Change in Option Price = (change in stock price)*Delta + .5*gamma*(change in stock price)^2 Of course, delta and gamma change with price too, so you cant use this to estimate gigantic leaps in price. -Tony

Hmm. Would you close out the option position when you closed out your position in the underlying ? I'm assuming you would, since I doubt you want to sit on naked options. The key greek to look at here, in my opinion, would be your theta. Not sure if you're familiar with the greeks, so I'll...