What are the YieldMax ETFs?
Options trading IQ
by Gavin
2d ago
Contents What Exactly Is A Synthetic-Covered Call? Frequently Asked Questions Conclusion The YieldMax ETFs uses a synthetic covered call options strategy to generate income from underlying equities symbols. For example, the YieldMax ETF with the ticker symbol MSFO is based on the underlying asset of Microsoft stock (MSFT). Similarly, for the following YieldMax EFTs: ABNY – underlying stock ABNB (Airbnb) AMDY – underlying stock AMD (Advanced Micro Devices) MRNY – underlying stock MRNA (Moderna) PYPY – underlying stock PYPL (Paypal) DISO – underlying stock DIS (Disney) JPMO – underlying stock ..read more
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A Practical Guide to Identifying High Probability Option Trades
Options trading IQ
by Gavin
4d ago
It is impossible to predict where the market is going to go or when it is going to go there, so as a result, traders rely heavily on probabilities and statistics in planning their trades. There is no place in trading that this is more accurate than in options trading. In addition to the usual problems of getting the timing and direction correct on a trade, options traders have the added variables of theta decay and Delta to determine if their trade will be profitable. These make being able to identify the probability of an options trade vital to long-term success in the options markets. Here ..read more
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Trying To Catch A VIX Spike With A Vertical Spread
Options trading IQ
by Gavin
6d ago
Contents How Do We Know When To Take Profit? An Example Of A Trade That Doesn’t Work Conclusion What does that mean? A few definitions are in order here. The VIX, or the CBOE Volatility Index, is a popular measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. VIX is generally mean-reverting, which means it tends to revert to its historical average over time. While the VIX can experience high and low volatility periods, extreme levels are often followed by a return to more moderate levels. Traders know this and use mean-reversion as a basis ..read more
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Long Volatility With The VIX OTM Fly
Options trading IQ
by Gavin
1w ago
While shorting volatility can be a good idea on many occasions, there are times that a trader may want to long volatility. That is, initiate a trade when volatility is low and close the trade for a profit when volatility increases. This is especially apropos when the VIX volatility index is at its lowest and seems unlikely to go much lower. There are many ways to go long the VIX. Today, we will look at using the out-of-the-money (OTM) butterfly option structure. Contents The Inverse Relationship Between SPX And VIX How Do We Go Long On The VIX? The Greeks Summary The Inverse Relationship Bet ..read more
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Wheel Options Strategy Risks: Navigating The Downside
Options trading IQ
by Gavin
1w ago
*Gasp*  No, can it be? What risks can such a popular options strategy possibly have? Don’t get me wrong. The Wheel Options strategy has advantages, such as selling premiums on calls and puts. Buying stocks at a lower cost basis. Supplementing with additional income on stocks you already own. And all the other benefits that you already know about. But it is also important to understand some of its drawbacks. All options strategies have drawbacks. And the Wheel is no exception. Contents High Capital Requirement Buying While Stock Is Going Down Opportunity Cost Capped Profit Potential Undef ..read more
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How To Reduce Gamma On An Iron Condor
Options trading IQ
by Gavin
2w ago
Today, we’re looking at how to reduce gamma on an iron condor. Mastering this technique could be the difference between a solid profit and a significant loss. Contents Introduction Reducing The Width Of The Spreads Rolling The Short Strikes Out Adding Cat Ears Conclusion Introduction Let’s say that a trader has an iron condor that has progressed into the following position. Date: Jan 2, 2024 Price: RUT @ 2006 Long one Feb 2nd RUT 1850 put Short one Feb 2nd RUT 1875 put Short one Feb 2nd RUT 2150 call Long one Feb 2nd RUT 2175 call Delta: -0.63 Gamma: -0.08 Theta: 15.30 Vega: -46.48 The trad ..read more
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A Western View Of An Eastern Trading Indicator
Options trading IQ
by Gavin
2w ago
Contents Moving Averages MACD Lagging Span Leading Span A and B Conclusion The Ichimoku Kinko Hyo is a trading system that comes from the East. It was invented in the 1960s by a Japanese journalist named Goichi Hosoda, who went by the pen name of Ichimoku Sanjin. In the West, it is better known as the Ichimoku Cloud indicator, which can be found in many trading platforms. Upon first glance at the indicator, even the names of the parts are quite foreign: Translating the terms to Western names will make it less foreign: However, the system uses many of the concepts we are already familiar wi ..read more
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What Are Realistic Returns For The Rhino Option Strategy?
Options trading IQ
by Gavin
2w ago
A natural question that traders coming to a new strategy often ask is, “How much can this strategy make?” A better question is, “How much drawdown can this strategy suffer?” A more realistic question traders should ask is, “How do I feel when I trade this strategy through its ups and downs?” When it wins, am I disappointed by the amount? Am I satisfied? Do I wish more? When it loses, am I still able to sleep? Am I fine with it? Or does it frustrate me to no end and cause me to want to abandon the strategy? I can not answer the latter questions for you. But I’ll try to rummage through the web t ..read more
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Wall Street Cheat Sheet
Options trading IQ
by Gavin
3w ago
The “Wall Street Cheat Sheet” has been around forever; it’s just been known by many different names. It visually represents what drives every market everywhere: human psychology. By understanding the nature of market psychology and how it affects market cycles, you can better prepare for them and make more informed investment decisions. Below, we will look into each section of the Cheat Sheet, some of the major characteristics, and potential ways to trade them. Contents Disbelief Hope Optimism Belief/Thrill Euphoria Complacency Anxiety/Denial Panic/Capitiulation/Anger Depression Conclusion D ..read more
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CheddarFlow Review
Options trading IQ
by Gavin
3w ago
Contents The Platform The Options Flow Historical Flow Flow Overview Dark Pool Levels and Chart Analysis Alerts/Unusual Flow Pricing Verdict Many tools are available to today’s retail options trader, but few are as important as one that can let you see the markets under the hood. That is exactly what Cheddar Flow markets itself to do. CheddarFlow is an options order flow platform specializing in catching unusual options trades, dark pool prints, and a powerful AI alert system, but is it worth the money? That’s what we aim to find out in this review. The Platform First up is the platform itse ..read more
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