Trading weekly options
Option price, Volatility and liquidity in the options market place... is all it matters.
Friday, March 2, 2018
Thursday, March 1, 2018
Thursday, February 15, 2018
Monday, February 12, 2018
Sunday, February 4, 2018
NDX repeating a pattern
Friday saw a sudden drop in NDX 100 index, considered as a worse week of the past two years. Interestingly it happened right after one of the best months of the past two years. I do believe that it was just another profit taking episode and nothing else. After a sharp run up that we saw in the last month, some profit-taking by nervous short-term stock holders was all but natural. The whole process, however, may be somewhat more complicated. A sell off like this is usually is the product of several participants with different mindset, account size and profit goals. Usually a long and sustained run-up develops within its participants a mindset of never ending bull market, where these players keeps on buying a market that is dully rewarding them and enticing them to keep increasing the bet size. After a while and some considerable gains a mindset of 'giving it all back' sets in and a slight decline on any given day turns that mind set into a fear, what makes it worse is the triggering of stop loss orders, traders watching their fortunes turning from big gains into losses start selling their long positions in a panic. Adding to euphoria is the short sellers doubling down on their positions from days or weeks prior, who were closely watching an extended markets and anticipating a sell off to happen soon. The result is a sharp and abrupt declines just like the one we witnessed last Friday that evaporates several weeks of gains within hours.
Monday, January 29, 2018
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