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Random Walks and Random Jumps: Taleb on Volatility
Nassim Nicholas Taleb, author of the widely discussed The Black Swan and Fooled By Randomness, is out with a new paper. “The Fourth Quadrant: A Map of the Limits of Statistics” pursues a thesis very...
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Warped, Frustrated Old Banks
Mr. Potter: [to George Bailey] Look at you. You used to be so cocky. You were going to go out and conquer the world. You once called me “a warped, frustrated, old man!” What are you but a warped,...
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Option Spreads and Positive Expectancy
Reader Peter T. writes in with a very good question: Then are several places on the site where you mention that you prefer to let the probabilities play out and not adjust condors. I calculated the...
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Options as a Language
Some traders are initially attracted to options because of the leverage they provide. But leverage is just a means for magnifying outcomes. A leveraged risk-taker will experience more glorious wins...
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Iron Condors and Vertical Skew
Member D. S. posed the following question: I’ve been trading SPY iron condors for some time now and I have been opening them at very similar levels to yourselves. However I have been using much wider...
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A Pause in Treasury Yields
A Bloomberg item out this morning wonders whether long-term Treasury yields have moved too far, too fast: The CHART OF THE DAY shows the difference between the yields on 10-year Treasuries and the...
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Combining Trend Following and Option Selling Strategies
Historically, two of the most successful approaches to trading have been trend following and option selling. Trend following and momentum investing are strategies known to just about everybody, and...
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Same trade, different reasons
Here’s a question we received recently from a client, asking about the relationship between the vertical spreads we trade in the ETF Trend Options strategy and the iron condors associated with our core...
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Trading the Volatility Spike in YUM! Brands
YUM! Brands has been regarded for some time as a play on discretionary spending in China – as part of the shift from exports to domestic consumption. Given that framing, YUM investors are pretty...
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