The stocks making outsized moves, up or down, in spite of broad market conditions.
Trader’s block is exactly what it sounds like — you can’t come up with any good trades for the life of you.
For a while, anyway… In the Federal Open Market Committee (FOMC) meeting from September 26 to 27, the Fed decided to raise rates to 2.25%.
But when it comes to spotting unusual options activity (UOA), we can’t always tell if the trader has other positions in their portfolio.
As the market sold off on Monday, I couldn’t help but think of this story… That appearance of chaos from the outside, while the reality is far more organized, is the same general pattern that unfolds when stocks sell off.
And the right market data to know how to profit… Often this third factor can lend a hand to the first two… Spotting the right information can help you overcome your fear and grab ahold of the opportunity.
And it gets trickier… How Volatility Accelerates Time Decay Even if you get the direction right on a short-term option, the move has to be substantial enough to offset the time decay.
The formula for the VIX determines expected volatility by looking at the prices of options on SP 500 futures.
Scanning for unusual options activity (UOA) gives us great insight into how traders view the market… Last week, for example, traders were going big on beaten-down stocks.
Last week, we published the first issue of Bold Profits Confidential: a new behind-the-scenes newsletter written by one of the fantastic members of our editorial team, Jaclyn Frakes-Jones.