Trading Game Plan

There are many considerations that must be brought together in order to determine the best way to trade options. Following the markets throughout the years has enabled us to make numerous observations concerning the trading activity of underlying securities as well as their related option markets. While we do not proclaim to be experts in the ways of option trading, there are certain items that we look for before we will trade a particular option market. Our plan of attack is not necessarily...

Markettiming Oscillators

Most traders are familiar with a set of market-timing indicators that are described as oscillators. Their goal is to identify trading opportunities which may exist whenever the oscillator indicates a market is overbought or oversold.* Those who use oscillators typically relate market price activity to oscillator behavior over compa * For those of you unfamiliar with the terms overbought and oversold, essentially an oversold oscillator reading will be recorded when selling has persisted over an...

Option Indicators Td F And Td Dollarweighted Options

One of the biggest complaints we have with many of the option trading strategies is that they are complicated, mathematically derivedformulas designed to sell or write options. Not only does this limit option traders 'rewards but it also leaves them vulnerable to an enormous level of risk. We have always felt that this approach is lopsided, and any technique that would work in favor of the option buyer, containing one's risk while unleashing one's reward, would certainly be welcomed in the...

Exercise the Option

As we just mentioned, one will only exercise a long option contract when one stands to make money from that position, otherwise one could simply let the option expire and lose the premium. When an option buyer exercises an option, he or she is choosing to take a position in the underlying instrument. Naturally, the position is determined by the option type and whether it is a call or a put. In exercising a stock or futures call option, the holder agrees to purchase the standardized quantity of...