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November 15, 2019

Reset Your Market Perspective

Most retail rats launch their trading endeavors (calling it a ‘career’ would be a vast exaggeration) by voluntarily checking themselves into a financial industry indoctrination camp where they are force fed a corrosive diet of nonsense such as magic candle patterns, Elliott Wave theory, moon phases, solar cycles, Bradley Turn Dates, Hindenburg Omens, etc.

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October 4, 2019

We Got The Outlier

We should probably preserve our final judgment until today’s close but I at this point I believe it’s fair to say that we most likely are looking at an outlier for week #40. Per the histogram, the SKEW, and standard deviation charts I posted on Monday we knew that there was a possibility for fireworks which made it possible for us to hedge ourselves appropriately.

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September 17, 2019

Markets And Volatility

By all definitions the past two years have been pretty challenging to many retail traders and not surprisingly the exhaustion I sense in the comment section is palpable. A lot of what has transpired can be attributed to a marked increase in realized volatility which over time has contributed to a now permanently elevated baseline in implied volatility.

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August 23, 2019

Let’s Talk About Gamma Risk

In a featured comment yesterday I mentioned gamma risk in SPX and SPY options as one of the reasons explaining recent hedging activity in the VIX and ES futures. It’s a complex topic that we’ll have to peel one slice at a time. Let’s begin by considering that options in essence are multi-dimensional financial derivatives in that they exhibit sensitivity to not only price, but also time and volatility (yes interest rates as well but that’s not an issue in our current market environment).

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NEW! Market Statistics
Cognitive Bias Carousel
  • Loss AversionLoss Aversion
    The tendency to treat money that has already been committed or spent as more valuable than money that may be spent or acquired. Imagine two … more
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Reset Your Market Perspective
 
We Got The Outlier
 
Markets And Volatility
 
Let’s Talk About Gamma Risk
 
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