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Market Commentary

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There is Something “Skewy” Going on Here

I have recently focused on the options-skew index as a tool to help me define overbought/oversold markets.  It is not the most conventional or even cleanest tool, since we’re talking about outlier trades.  By definition, the options-skew index measures the tail risk of the SPX 500 basically over 30 days.  Traders who add to the skew are looking for outlier moves of 2-3 standard deviations, which happen 5% or less of the time.  These are cheap bets, but, if they come through, they pay off nice...

Jan 30, 2015
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There is Something “Skewy” Going on Here

I have recently focused on the options-skew index as a tool to help me define overbought/oversold markets.  It is not the most conventional or even cleanest tool, since we’re talking about outlier trades.  By definition, the options-skew index measures the tail risk of the SPX 500 basically over 30 days.  Traders who add to the skew are looking for outlier moves of 2-3 standard deviations, which happen 5% or less of the time.  These are cheap bets, but, if they come through, they pay off nice...

Jan 30, 2015
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Day Trading Is Hard Enough

Day trading is tough enough as it is. Don't make things harder on yourself when you are using options.

There are a number of things you must concern yourself with if you are going to employ this methodology, but three are key – liquidity, delta, and theta.

I hear many "options professionals" tell their clients to just trade in-the-money options, as they offer a lot more leverage than going out and buying the underlying, and they act just like the underlying, as the market moves up and down.

...
Jan 30, 2015
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Why Traders Fail

There’s one main reason the vast majority of traders fail – they are undercapitalized.

Why should capitalization matter so much?

SCARED MONEY

Because, as I recently discussed, our attitudes toward money are anything but neutral. Undercapitalization means you are likely trading with “Scared Money,” which will trigger a host of underlying psychological issues.

Specifically, monetary fluctuations activate latent core issues having to do with security, power, status, self-worth, trust, etc. When...

Jan 30, 2015
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SPX: The Fed To The Rescue … Again

The S&P 500 mini futures got the oversold bounce we were predicting yesterday, thanks to what has become the “new normal” – an unofficial and sometimes covert intervention from the Federal Reserve anytime the market shows signs of faltering.

Yesterday it was a closed-door presentation by Fed Chair Janet Yellen to a group of congressional Democrats indicating that there will be no “immediate” increase in interest rates.

The US equity market, which had been trading lower, promptly reversed cou...

Jan 29, 2015
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Featured Stories

More Featured Stories
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Learn To Navigate Your Assets In Times Of Big Change

  • One Risk Aspect Often Overlooked When Assessing Risk

There are many aspects to trading risk. The risk to capital exposure due to excessive position size relative to one’s stops is obvious. Co-relation of your positions in today’s highly co-related markets is another aspect that must be considered, and, of course, you know about the risk of not diversifying your assets.

But have you ever considered the risk you are assuming from your brokerage account? I am talking about your brokers’ ability ...

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Why Smart Traders Do Dumb Things

"Everybody's got a plan until they get punched in the face."Mike Tyson

In the past 10 years, we have helped hundreds of retail traders learn to trade futures. Most begin by using a simulation account – paper trading – and most of them quickly learn to trade profitably ... as long as they aren't trading real money. But many of the same people who can accurately assess opportunities and fearlessly trade them using paper money turn into timid, indecisive losers the minute they have to do exactly...

Jan 27, 2015
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Three Questions With The Power To Transform Your Trading

There are three simple but powerful questions which can transform our trading when we ask them of ourselves consistently over time.  They are powerful because they form the basis of mental flexibility and mental agility.  Wouldn’t you like to be mentally more resilient and deft?

The three questions can be asked anytime you are preparing for trading, executing, and managing trades, or reviewing your trading results — in other words, anytime you are engaged in a trading-related activity.  The t...

Jan 26, 2015
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Look To Platinum And The PGM in 2015

Given a growing global demand for platinum, palladium, and rhodium, three of the six metals in the platinum metals group , and the increasing cost to mine platinum, we are focusing our efforts to accumulate platinum over the course of the year. PGM, specifically platinum, is an excellent store of value and it performs well as an inflation hedge.  One could argue that platinum – and the other meals in the PGM - are a better long term hedge than gold, as there are a number of industrial uses fo...

Jan 23, 2015
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Taking A Peek Inside (the) Box

The volatility roiling the broader markets has, at least thus far, kept a lid on the IPO market in 2015. To date, just two companies have braved the elements with County Bancorp and Patriot National going public on January 16.

This week, however, the IPO market will once again find itself in the spotlight as a well-known tech company makes its long-awaited debut in the public markets. Specifically, on January 22, Box, Inc. – a provider of cloud-based storage and file sharing services – is ...

Jan 22, 2015
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