Let's play a game. Say I have a coin, and you bet heads or tails. If you guess right, you win $1. If you guess wrong, you lose $1. This is basically a "breakeven system." After all, with 50% odds, it's going to be a wash. Yet what if the coin wasn't fair? What if
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How to Trade the "Free Trading" News
Robinhood was the catalyst. An upstart broker targeting a younger demographic with the promise of "free" trading... on stock and options. Personally, I thought it was a gimmick and not sustainable. Looks like I was wrong. Last week there was a "race to zero" with the major brokerages -- SCHW, ETFC, AMTD, IBKR. Looks like
My Favorite Kind Of Technical Setup For Iron Condor Trading
What do we know when we start an iron condor trade? Let's take a look at the two of the option greeks. First... Delta. I've talked about this plenty of times, but iron condors are not "market neutral" trades. They start off slightly bearish. The other greek you have is vega. This is related to
Remember Bonds?
Good Lord... the financial markets have a short memory. LESS THAN A MONTH AGO, the long bond went parabolic. TLT ran up nearly 10% in 10 days. Largest rally since the Fiscal Cliff play in 2011. When TLT goes up, it means that rates went down. And rates got low... stupid low... it felt like
The Chinese Undertaker Trade
If there’s anything I’ve learned from trading this market over the past decade… It’s how narratives will stay quiet for most of the time, but when they shift… markets move fast. We will normally see this to the downside. Take the fiscal cliff from 2011 as an example: The S&P pivots around 1300 for an
Here's How to Fade the "Trade Talks" Rally...
"Markets rise on trade optimism." Hah. OK. We've seen this before. If this is the normal cycle... the markets will jam higher with the anticipation that US-China trade relations will normalize... But then something happens. A wrench thrown into the gears. Gas on the fire. A tweet. And then, just like clockwork, the markets gap