Monthly Archives: September 2010

Fizzle of the markets

It look as if all the economic news that boosted the markets in the pre-market hours and in early trading has fizzled out and we are now seeing a pull back to the flat line in the major indexes. The … Continue reading

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Big economic day

Tomorrow (Thursday) looks to be a very volatile day.  This week has shown to be very quiet in anticipation of Thursday’s news. We have the GDP revised numbers, Chicago PMI, and Jobless claims all coming out on the same day.  … Continue reading

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Market News 9-24-10

Today’s rally was brought upon by an upbeat view of the European economy, more specifically the German economy.  This had driven up the European markets prior to the US open this morning. Another positive factor is the durable goods and … Continue reading

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You don’t suffer a loss until you sell something

This one is a peach.  Here is an example:  If you bought a stock at $50, and the stock went up to $60…if you called your broker, they would tell you that you made $10.  BUT! If you bought that … Continue reading

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Option sellers make more than option buyers

I have never seen any solid statistics supporting this statement as fact.  Think about this, if selling options were better than buying them, who would ever buy them?  Remember that it takes two sides for every trade (a buyer and … Continue reading

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Money on the sidelines

Many of us have heard there is a great deal of cash that has been sitting on the sidelines.  There are estimates in the hundreds of billions to over a trillion dollars of cash that is not being put to … Continue reading

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Buy vertical spreads in low volatility and sell them in high volatiltity

This myth is perpetuated by seminar companies that do not really understand options.  When trading a  (vertical) spread.  You have an option you are buying, and an option you are selling in the same month.  By virtue of that, you … Continue reading

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80%-90% of options expire worthless

This myth is perpetuated by brokers and the general market.  This myth could not be further from the truth.  Remember there are two types of options (calls and puts).  A call gives the right to buy, and a put gives … Continue reading

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The reason call options are more expensive than put options ATM (at the money)

It has been a popular myth that the reason that calls trade higher than puts, when the options are at the money, is due to the fact that stocks can only drop to zero for the puts, but can go … Continue reading

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You will be assigned on a short option if there is $.25 or less time value in the option

Even though this is a myth, it is important to understand that anytime you sell an option you are at “risk” of being assigned.  Not to say you will.  There are specifics to say when you should be assigned.  They … Continue reading

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