Big Picture: Late in the day Friday I sent out a Tweet with the image below. Sometimes the markets seem totally ridiculous on an intraday basis and the price action on Friday was a prime example. Apparently, an aggressive buyer (or buyers) decided to enter the market and drive it off the lows after a crash […]
Pain. I’m always looking for ways to reduce pain when I’m trading and by pain, I really mean heat. I know that I’m not alone in that pursuit because I see credit spread traders waiting and waiting to fade big moves. For example, they might want the market to sell off as much as possible […]
Big Picture: Lately I’ve been thinking about relevance. What matters, what doesn’t, and, of course, why. When you follow financial markets, the volume of information is overwhelming and the vast majority of it doesn’t matter and will be quickly forgotten. A good policy is to assume that whatever you read, hear, or see doesn’t matter. […]
Overview: The October RUT Butterfly is now closed and I learned a few good lessons over the course of the trade. I opened the trade on Friday, August 21, 2015, which was fairly poor timing considering it was the Friday before the big push lower on Monday. At the time, I thought RUT was oversold and […]
Big Picture: Speed can be good or bad. I probably don’t need to tell you that the markets are in a state of elevated volatility right now, but it is worth pointing out that volatility can take place in both directions. The past two weeks have included a fast move to the upside with a […]
I’m generally somewhat poor at predicting market direction on a daily timeframe. As a result, I frequently have the opportunity to learn from market moves and adjust options trades. In the past few days the Russell 2000 has rallied a few percent and that move has put my October $RUT Butterfly under pressure. As a […]