ARTICLE SYNOPSIS ...At The Close by John A. Sarkett Here's a turbocharged option strategy. Francisco Antonio Urrutia, a former banker with a penchant for a single index option and risk management, has been generating stupendous returns for the past three years. In this niche of option exotica -- several thousand individuals exclusively trading the Russell 2000 (Rut) condor -- where 100 condors per month is deemed large and carries a $100,000 theoretical risk, he does five or 10 times that size on a monthly basis, and profitably. Spread across 10 different accounts, he has averaged 10% to 15% monthly returns again...
BY: John A. SarkettSUBJECT: At The Close
ARTICLE SYNOPSIS ...Books For Traders by Technical Analysis, Inc. ? 7 Charting Tools For Spread Betting ? The Active Asset Allocator: How Etfs Can Supercharge Your Portfolio ? Bonds Now! Making Money In The New Fixed Income Landscape ? High-Frequency Trading: A Practical Guide To Algorithmic Strategies And Trading Systems ? The Myth Of The Rational Market: A History Of Risk, Reward, And Delusion On Wall Street ? Winning Edge Trading: Successful And Profitable Short- And Long-Term Systems And Strategies...
BY: Technical Analysis, Inc.SUBJECT: Books For Traders
ARTICLE SYNOPSIS ...Debit or Credit? by Giorgos E. Siligardos That is the question. If you are confused about which vertical spread to use, find out here. Are vertical credit spreads better than their counterpart debit spreads? In this article I will discuss their main and subtle differences (and similarities) with an emphasis on the income-generating strategies. Now that trading direct derivatives is open to retail traders, both experienced professionals and novices engage in complex option positions like spreads, butterflies, condors, and so on. Among these advanced positions, the vertical spreads (referred ...
BY: Giorgos E. Siligardos, Ph.D.SUBJECT: Options
ARTICLE SYNOPSIS ...Explore Your Options by Tom Gentile PORTFOLIO PROTECTION I have a longer-term portfolio of stocks that I'd like to protect against any repeat performances of 2008 into March 2009. How can this be done with options? That's a good question, but the answer doesn't lend itself to one size fits all. Depending on how many stocks are in your portfolio, call and put liquidity within those individual issues, your risk and reward preferences, and how much time you're willing to allocate to managing positions will lead to very different courses of action in the option market. An investor with long-...
BY: Tom GentileSUBJECT: Explore Your Options
ARTICLE SYNOPSIS ...Futures For You by Carley Garner CURRENCY FUTURES VS FOREX What are the advantages of trading currency futures as opposed to foreign exchange? If you recall from the April 2010 column, we discussed the implications of government regulation, dealing desks, and counterparty risk when it comes to deciding between currency speculation in the futures or forex markets. However, there are a few other things to keep in mind, such as the true costs, liquidity, margin, and access to options. Transaction costs: The forex industry has done a great job at marketing commission-free trading. Accordingly...
BY: Carley GarnerSUBJECT: Futures For You
ARTICLE SYNOPSIS ...Introducing The Modidor Spread by Jay Kaeppel Here's a strategy that involves modifications to the standard iron condor spread. The world of option trading is an ever-evolving one. While the basic strategies have been around for a long time, the search for useful adjustments and enhancements to these fundamental strategies is an ongoing process. The more closely traders look at traditional strategies, the more opportunities they are likely to find. This article details a strategy that involves modifications to the standard iron condor spread, dubbed the modidor spread. THE GENESIS OF THE M...
BY: Jay KaeppelSUBJECT: Options
ARTICLE SYNOPSIS ...Jared Woodard of Condor Options by J. Gopalakrishnan and B. Faber Knowing how the market moves isn't particularly important, Jared Woodard, our interview subject of the month, explains. Woodard, the principal of Condor Options, has more than a decade of experience trading options, equities, and futures. He publishes the Condor Options newsletter (specializing in iron condors) and the accompanying blog. Woodard has been quoted in various media outlets including The Wall Street Journal, Bloomberg News, Financial Times Alphaville, and The Chicago Sun-Times, and in 2008 he was profiled as a top o...
BY: J. Gopalakrishnan and B. FaberSUBJECT: Interview
ARTICLE SYNOPSIS ...Letters To S&C by Technical Analysis, Inc. SAMPLE INDICATOR VALUES Editor, I have a request. Would it be possible to include a set of sample data and expected indicator values when you provide the code for indicators? Perhaps you could post it at your website for download. I just read "Empirical Mode Decomposition" by John Ehlers in the March 2010 issue. It's a great article, and it's very helpful that he has included the programming code. I have coded it into my backtesting software, and the indicator looks similar to the example figures in the article. But if I had a set of expected valu...
BY: Technical Analysis, Inc.SUBJECT: Letters To S&C
ARTICLE SYNOPSIS ...Looking At Other Markets by Gail Mercer Most new traders gravitate to the S&P mini because of its average price range. But here's a look at daily price movement in the currency futures vs. that of the S&P 500. Which one has larger price movements? any new traders begin their trading experience on the mini indexes, with a primary focus on the mini Standard & Poor's 500, as either a scalping trader or an intraday trader. Their daily profit target is normally between three to five points (at $50 per point). Sounds reasonable, right? Wrong! For an experienced scalping trader, this could be done...
BY: Gail MercerSUBJECT: Forex Focus
BY: Technical Analysis, Inc.SUBJECT: Traders' Resource
BY: Jayanthi GopalakrishnanSUBJECT: Opening Position
ARTICLE SYNOPSIS ...Q&A by Don Bright WHEN DO YOU ADD TO A POSITION? I'm an intraday stock trader. I've never had a problem cutting my losses, but I could use a little guidance when it comes to taking more advantage from my winners. I know one option is to add on dips. Do you ever add to a position if it starts working right after you buy it? -- JKlar Trading decisions are based on all the variables involved, not just the stock's price movement. One variable, of course, is the time frame the trader is accustomed to. If you are a short-term, high-frequency trader, then you may choose to take small profits, or lo...
BY: Don BrightSUBJECT: Q&A
ARTICLE SYNOPSIS ...Signal Processing Basics by Glenn A. Barlis This is the second of a series of articles that examine stock price analysis using the mathematical methods of signal processing. Here you will learn about tools for detecting trends and smoothing them. In the first part of this series, I proposed a model for price time series that could be analyzed using signal processing techniques: Equation 1-1a: P = Constant + trend + cyclical components + noise or Equation 1-1b: P = c + f(t)trend + Sum[f(t)cycles ] + f(t)noise One way to view this model of price action is to think in terms of the frequen...
BY: Glenn A. BarlisSUBJECT: Trading Techniques
ARTICLE SYNOPSIS ...Smoothing The Bollinger %b by Sylvain Vervoort This variation of the popular Bollinger %b indicator gives clear turning points that will help traders identify entry and exit points while prices are moving between the Bollinger bands. By now, everybody in the business knows that Bollinger bands were developed by John Bollinger. What they actually are is probably equally known. The Bollinger bands in Figure 1 consist of a set of three curves drawn in relation to price data. The middle band is usually a simple 20-bar moving average that serves as the base for the upper and lower bands. Upper...
BY: Sylvain VervoortSUBJECT: Indicators
ARTICLE SYNOPSIS ...Traders' Tips by Technical Analysis, Inc. This month's Traders' Tips are based on Sylvain Vervoort's article in this issue, "Smoothing The Bollinger %b." Code for MetaStock is already provided in the article's sidebar to help readers implement the indicator, and at the end of this document. Code for other programs is presented here as contributed by various software developers. Readers will find these and more Traders' Tips at the Stocks & Commodities website at www.Traders.com in the Traders' Tips area, from where the code can be copied and pasted into the appropriate program. In addition,...
BY: Technical Analysis, Inc.SUBJECT: Traders' Tips
BY: Alexander Elder, MDSUBJECT: Novice Traders' Notebook