volatility

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Stock Continue to Rally despite Drop in Volatility

U.S. equity markets are trading firm overnight after yesterday’s surge to the upside. Buying pressure dried up late in the session, but no damage was done to the uptrend. Volatility is falling which is making traders appear complacent. This could be both good and bad. On the good side, it could mean traders are gaining confidence in the recovery which will send prices higher.

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Traders Unscripted: Market Timer Fari Hamzei PT.3 -...

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Traders Unscripted: Market Timer Fari Hamzei PT.2 -...

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Traders Unscripted: Market Timer Fari Hamzei in "Me...

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Traders Unscripted: Options Legend Larry McMillan I...

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Traders Unscripted: Options Legend Larry McMillan I...

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An Option Trader's Thought Process

I received a question the other day in regards to using options to bet on changes in volatility. Though most seasoned readers are familiar with the many facets of option trading, let's take another look at how options are used by various market participants. Options are typically used to bet on direction, volatility, or a hybrid of the two.

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Tight Euro Range Indicates Impending Volatility

The Euro made a successful test of last week’s low at 1.3584 and finished close to the middle of this week’s range. Early in the session, the EUR USD broke sharply but buyers came in to defend the low.

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IVolatility Trading Digest Blog

When I first started trading options, my source of choice for volatility charts was IVolatility. Though my first broker,OptionsXpress, offered volatility charts, they were too clunky and limited and as far as I'm aware, they still are. Not that I want to pooh pooh OptionsXpress, as they are one of the few brokers I'm aware of that even offers volatility charts.

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Views:192

Historical Volatility: The Gap Factor

If you missed last weeks Volatility Quiz, you can check it out here.

Similar to question number two, quiz question three also tested your ability to read a volatility chart to ascertain the relative value of option prices. Roughly 90% of you answered correctly stating that options seemed under priced. Take another gander at the question and corresponding volatility chart:

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Trader Chat: Dan Passarelli Pt. 3 - Trading on the ...

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Trader Chat: Dan Passarelli Pt. 2 - Trading Mindset...

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Trader Chat: Dan Passarelli Pt. 1 - Options Educati...

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The Recovery After Six Months: 3/09/09-9/09/09

We are exactly 6 months in from the Dow Bottom that everyone now refers to as the economic nadir of this recession and consequently we are 6 months into an economic recovery. The key questions are, how is the recovery holding up, will it continue, will it be jobless, and will it be widespread.

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How to Trade Gold Volatility

Regardless of what you think where gold is headed, there are ways to profit from gold volatility using stock options. We step through a recent trade with the rationale behind it. The GLD options trade netted 45% return in 2 weeks.

We also go over the case that volatility may be a little overheated and it may be due for a pullback, along with GLD prices.

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