Daily Option Trading Commentary

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Use SPY 126 As Your Option Trading Guide!

Every year I visit the Trade Free Zone (not to be confused with the Free Trade Zone). For the rest of July I will be turning my computer screens off so that I can decompress. This helps me to regain a fresh market perspective. I am expecting lots of action this fall and I will hit it hard when I return. At the end of this post I have left you with a set of standing instructions. Wednesday, the market posted its first decent rally in weeks. Wells Fargo, Northern Trust and Charles Schwab posted good numbers and that helped…
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Options Trading Chart of the Week

Option Trading Article of the Week

Option Trading - How I Trade Options - Form An Opinion - Magnitude

Posted by Pete Stolcers on July 18

At this stage I’ve nailed down the stock and I’m firm on the direction. Now I have to determine the magnitude of the move. Historical volatility, long-term technical support and resistance levels, relative valuation and overall market conditions guide me. Historical volatility - If the stock has had a habit of making large moves, there is a likelihood that the pattern will continue. Conversely, if a stock has a nice orderly grind to it, the chance of an explosive move is small. Long term technical support and resistance levels - These areas represent resting points for a stock. They include…

Stock Options Question of the Week

How Does Assignment Work?

Posted by Pete Stolcers on July 17

Question Robert states, "My question regards the assignment of options. I'm not exactly sure how the dynamics work and how to determine if I'm in danger of being assigned. Suppose I sell a call, when does the person on the other side get to buy the call you put up for sale?

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