Options trading IQ
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Options trading tutorials focusing on volatility, iron condors, butterflies and other option income strategies. When I launched Options Trading IQ back in 2010 I had one goal in mind To teach people how to trade options. Follow my blog to learn about options.
Options trading IQ
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
Options trading IQ
5d 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
Options trading IQ
1w 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
Options trading IQ
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
Options trading IQ
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
Options trading IQ
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
Options trading IQ
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
Options trading IQ
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
Options trading IQ
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
Options trading IQ
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