Options

Market Masters: How To Manage An Iron Condor Trade

For many professional option traders, iron condors form the basis of how they generate monthly income. Iron condors are a strategy that allows you to profit from sideways moving stocks, but they can also profit if the stock experiences slightly higher or slightly lower prices over the course of the trade. Where beginners get in to trouble is when a stock makes a big move in either direction shortly after

2 Charts Revisited: The Put Call Ratio And VIX Term Structure

Back on October 7, I wrote this piece that focused on two bearish indicators and I said we could see some near-term weakness in the market. After a quick 4% drop in a week, we bounced and formed a nice looking V-bottom. Check out this chart of the S&P 500 (SPX):   I said at the time that I wanted to see both the CBOE options equity put/call ratio and

Market Masters: Using COT Data To Identify Turning Points In The Market

While I’ve been writing for See It Market for several months, it’s a great honor to write a “Market Masters” article. With my focus being towards technical analysis I am constantly watching the latest price action and in search of the best risk/reward relationships. These can be derived from momentum or breadth setups, which I’ve written about quite a bit, extremes in market sentiment, as well as within the actual positions

Big Moves Expected in Brazil ETF (EWZ)

The ishares Brazil ETF (EWZ) has a 30 day implied volatility of 70%. This means that the options market is pricing in a move of plus or minus 20% on EWZ within the next month. The precise calculation to find the expected move based on the IV30 percentage is (IV30/sqrt12) ~ (70/3.464) = 20.2%. Recent news surrounding the Brazil elections is obviously casting uncertainty on the Brazil stock market. Looking at the

Investors Panic As Volatility Spikes: What’s Next For Stocks?

It’s been over 2 years since investors experienced a day like Wednesday. The steady stream of measured selling finally gave way to a bit of fear and capitulation as investors were forced to make decisions in the face of market volatility that felt crashy. At one point, the S&P 500 was down over 3 percent. It was the perfect series of events for an uncertain market: A gap lower that looked

Why October OpEx Could Bring A Bounce For Stocks

After the first three week losing streak for the $&P 500 (SPX) since January and the first six week losing streak for the Russell 2000 (RUT) in more than nine years, bulls are looking for any reason a bounce might happen. Well, this could be the ticket: October OpEx. This week is October options expiration week, otherwise known as October OpEx. Last month, I showed why September OpEx was historically

Fear Gauges Rise: Is Investor Capitulation On The Horizon?

Last week reminded investors just how quickly volatility can make a come back. And just how uncomfortable it can be. After a big down day Tuesday, the markets recovered with an even bigger up day on Wednesday. But this was nothing more than a bull trap, as the bears pounded the market lower Thursday and Friday. And, at the time of this writing, the S&P 500 futures are indicating more discomfort for

2 Charts That Say Stock Market May Head Lower Yet

Well, October so far is living up to its billing as the most volatile month for the stock market. As I noted coming into the month, October is usually a roller-coaster of a month, but it isn’t nearly as bearish for stocks as most think. My favorite stat is the average year tends to bottom during the last week of October. And since the stock market peaked the third week

Why Tesla’s Stock (TSLA) May Be Headed In Reverse

Tesla Motors has been dominating news headlines lately and has become a darling of the stock market. Recent news included a software update for Tesla owners that allows them to map out a route based on current traffic congestion. Amazing stuff really. Other features for Tesla Model S owners include remote start from an iPhone and the ability to raise suspension when going over ridges or bumps. This latter feature

Why September OpEx Could Be Very Bullish For Stocks

Next week is options expiration week. From here on out, I’ll just call it September OpEx. Last month, I took a closer look at August OpEx and today I’ll look at what September OpEx has historically done. I’ve long noted how this week tends to go with the overall trend, only it is more magnified. For this reason some of the best weeks the past five years have taken place