Options

Weekend Market Commentary: Diversification In Trading

Big Picture: One of the truths of markets is that we don’t get to choose the market environment. Investors want markets that go up all the time, traders usually want volatility, and premium sellers want implied volatility higher than realized volatility. Not all of those environments exist simultaneously and diversification helps us…

Unusual Options Trading: Hedging, Sentiment Or Bullish Sign?

While the stock market saw big gains Tuesday, one options exchange reported a near-record level of relative put buying, as seen on the ISE equity call/put ratio. One of the recent themes that we’ve noted – and written about – has been the considerably depressed sentiment among various investor groups….

Stock Market Bulls Set Up Nicely… In The Near-Term

The U.S. stock market indices had a powerful session on Tuesday, followed by another good session on Wednesday. Volume could have been a little better on major U.S. indices but price spoke loud and clear… and this may benefit stock market bulls over the near-term. The Nasdaq 100 surged 2.1 percent on…

S&P 500 Weekly Review: Will Traders See A ‘May Swoon’?

A LOOK AHEAD FOR MAY OPTIONS EXPIRATION (OPEX) It’s been a very tricky market tape for bulls and bears over the past couple of weeks. Bulls have been unable to press the stock market above resistance, while bears have been trying hard to break bigger support levels but in vain. A lot…

VIX Warning? Why The Volatility Index May Be Set To Rally

The Volatility Index (VIX) is followed by most active investors and traders as a way of understanding the market’s sentiment toward stocks.  It’s often referred to as the “Fear Index”. When it is really low, it signals complacency and sends a VIX warning to stocks. When it is high, it…

Market Indicators Point To Higher Volatility Near-Term

The current weight of evidence continues to suggest a neutral/bearish toward equities as a whole, with short opportunities available in select areas. One of the reasons for this stance is the potential squeeze that’s setting up in the Volatility Index. There are three charts that suggest Volatility could be headed higher…

Options Traders Look For Q2 Upside In Biotech Stocks

Biotech was a sector that was a notable laggard in Q1 with the Nasdaq Biotech Sector ETF (IBB) down nearly 24% and S&P Biotech Sector ETF (XBI) down nearly 28%. The relative weakness started to show in Q3 and Q4 of 2015 after the group became overheated after an 80%…

Weekend Update: Stop Guessing Where Stocks Are Headed

The Big Picture: Does it seem like it’s hard to make sense of what’s going on in the market?  Guess what?  The market has no idea what it’s doing either. Recently I’ve seen numerous headlines saying the market is “complacent” and I don’t think I can take another one. The…