There are talks of AI everywhere, including in trading. Let’s see if AI can generate a trading plan for options trading. There is a proliferation of AI agents, and new ones are always coming online – ChatGPT, Claude, Gemini by Google, Copilot by Microsoft, etc. Contents For this example, we will use Grok, developed by … Read more
The basic building block that all option traders learn is the two vertical spreads: the credit spread and the debit spread. Contents The credit spread is a favorite among option sellers, especially the beloved bull put credit spread. And we love them too – especially when the market goes up most of the time, and … Read more
The MACD indicator has a lot of moving parts. Today, we are only looking at what happens when the MACD line approaches zero. Contents Focus only on the MACD line in the bottom panel – the black line. Completely ignore the MACD red signal line and its histogram. With its default settings, the MACD indicator … Read more
Some stocks and ETFs are highly correlated with each other. When the price of one goes up, the price of the other also goes up. Others are inversely correlated with each other. When the price of one goes up, the price of the other goes down. How can we determine if two stocks are correlated … Read more
TastyTrade brokerage accounts provide the TastyTrade desktop trading platform for options analytics. Schwab brokerage accounts provide the ThinkOrSwim trading platform. Contents While there are web-based versions of both, the desktop apps have more features and capabilities. While there are mobile apps for both, the desktop apps are probably the tool of choice. Obviously, there are … Read more
Contents Forgive the dissertation-sounding title. We will try to explain this as simply as we can, focusing on the main concepts without going into the weeds of the more detailed areas. Exchange Traded Products (ETPs) is just a term to encompass both Exchange Traded Funds (ETFs) and Exchange Traded Notes (ETNs) – the difference between … Read more
Asset allocation is the cornerstone of any long-term investment plan. But when it comes to retirement planning, it becomes more than just a spreadsheet exercise—it’s a strategy that balances risk, income, and longevity. Whether you’re ten years away from retirement or already drawing down your portfolio, asset allocation shapes everything: how much risk you take, … Read more
Investors often face a crucial decision when building their portfolios: should they focus on growth stocks, which are expected to expand rapidly, or value stocks, which are typically undervalued relative to their fundamentals? Both growth and value investing have their merits, but the decision depends on an investor’s risk tolerance, market conditions, and financial goals. … Read more
When it comes to investing, most people obsess over returns. But elite investors understand that how you combine assets is just as important as the assets themselves. Welcome to the concept of the Efficient Frontier—one of modern portfolio theory’s most enduring insights. The Efficient Frontier shows us how to construct portfolios that offer the highest … Read more
Every sophisticated portfolio in existence—whether run by a pension fund, robo-advisor, or high-net-worth wealth manager—rests on a set of core principles. These principles form the backbone of Modern Portfolio Theory (MPT). Contents Devised by Nobel Laureate Harry Markowitz in 1952, MPT revolutionized investing by quantifying the benefits of diversification. It was the first time investors … Read more