As shown, the iron condor, butterfly, and calendar are all delta-neutral option income strategies, which are so-called “non-directional.” But are they really non-directional? Their current profit and loss line (also known as the T+0 line) has the concaved downward curve typical of such strategies. The current price dot of the underlying is at the top … Read more
Contents Asset allocation is a crucial element of successful investing. It refers to dividing your investment portfolio among different asset classes—primarily stocks, bonds, and cash-with the goal of balancing risk and reward. The right allocation strategy aligns with your financial goals, risk tolerance, and time horizon, making it a cornerstone of long-term investment success. Unlike … Read more
Before the advent of AI, if we wanted to write a custom indicator in TradingView, we would need to learn how to code PineScript while referencing TradingView’s documentation on technical indicator functions. Or you can hire a programmer. Contents Today, using the free version of ChatGPT, we can have AI write the code for us. … Read more
While Peter Lynch did not coin nor specifically use this metric for evaluating the value of a company, it got this name because others have created this quantitative measure based on his investment principles. Peter Lynch is a well-known successful investor and the former manager of the Fidelity Magellan Fund. His investment principles are to … Read more
When selling out-of-the-money put credit spreads for premium, one of the most important questions to ask is what delta to sell them at. Contents As a review, here is a put credit spread on Microsoft (MSFT), currently trading at $429: We are selling two contracts that expire 34 days out on February 21, 2025, with … Read more
Options trading is inherently probabilistic, where traders aim to profit by balancing risk and reward. High probability trading refers to strategies designed to deliver consistent profits by leveraging statistical probabilities and favorable setups. These strategies focus on generating income or capitalizing on small market inefficiencies rather than chasing large, speculative payouts. Let’s explore the principles, … Read more
As a review, an iron condor is an out-of-the-money put spread plus an out-of-the-money call spread. Contents Here is a typical iron condor on the RUT index with the short put and short call at around 15-delta. It started out with 49 days till expiration. Put spread: Sell one contract 2175 putBuy one contract 2150 … Read more
The strategy commonly referred to as “buy the dip” is where an investor buys (or goes long) an underlying asset that has dropped in price but is expected to rebound and continue on its longer uptrend. Contents In order to buy the dip, the first step is to have a longer-term uptrend in place. You … Read more
At certain times, certain brokers have blocked the trading and investment of certain stocks and ETFs of certain types of accounts based on government regulations or the particular bank’s risk policies. Contents The types of accounts in which these restrictions have been placed are usually more conservative retirement accounts (such as IRA accounts) with lower … Read more
Rolling an options position for credit involves closing an existing position and opening a new one to collect additional premium. This technique is primarily applied to short premium strategies such as the short put, selling credit spreads, iron condors, and butterflies. The closing of the old and the opening of the new position can sometimes … Read more