Crude oil volatility blew past previous highs as the OVX (CBOE Crude Oil Volatility Index) that measures volatility in the crude oil market much like VIX does in the S&P 500, reached 216.89 earlier today. This comes on the back of news that oil futures contracts expiring on Tuesday turned negative.

Demand, and more importantly, supply side factors have contributed to the recent volatility in energy markets. …

This is what black-swan events and risk feels like for unprepared investors and traders. Global financial markets’ volatility and wild swings remind many of the financial crisis of 2008 that marked its 11th anniversary earlier this month. History’s a good reminder of markets’ inevitable ups and downs that can help establish key lessons for what to do (and not to do).

Manage risk at order entry: Whether you’re executing defined or undefined risk options investment strategies, appreciate your maximum loss potential at the onset. This is why position size matters and allocating risk per trade relative to the size of…

Apple cut its sales forecast because of the coronavirus that appears to have slowed production and demand for its hardware products in China. Given most of Apple’s future business is expected to take place on the internet, we remain bullish on Apple and don’t expect short-term events to hamper long-term growth. This is primarily because of the growth potential for iOS — Apple’s operating system — and its role in driving future revenue growth.

The iOS App Store is the main driver of services revenue for the company today. According to company financials, the iOS App Store accounted for approximately…

What if you could earn a stream of income on your options trades by letting time pass? With “theta,” this is a possibility, especially if you’re an options seller. In fact, theta has been a key indicator and metric in all our options credit strategies we’ve discussed up until this point.

Theta represents a phenomenon that occurs with all options contracts: time decay. In other words, options’ values decline through expiration and by selling options investors take advantage of time decay. So, every time options investors sell an option, a positive theta value is associated with their stock or ETF…

Standard deviation is one measure — and a good measure — of volatility. Standard deviation tells us how much individual data points of a sample vary around the sample’s mean (or average). In our options trading world, standard deviation (i.e. volatility) tells us how much the price of a stock might move up or down from its current price. Generally, lower volatility means a stock’s price won’t experience large swings, while higher volatility means a stock is likely to have big up and down swings.

Standard deviation is simply the square root of the variance of the data. Variance is…

The future of investable wealth creation is going to look very different

Do you know why commissions to buy and sell stocks are disappearing in the U.S.? Is it really because financial service firms are intentionally democratizing finance, or all of a sudden feeling incredibly generous? A key reason fees are going away is because institutional and retail investors are trading less stocks. Equity trading has become a throw in. A great validation for options and futures trading for retail investors!

Stocks were synonymous with finance, investing and wealth creation. If you loved a company, a product, an idea or…

Not quite…The problem is you’re following mainstream media clouded with emotion. It’s noisy out there and we get it! Without further ado, let’s take a look at the iShares 20+ Year Treasury Bonds Exchange-Traded Fund (TLT) — a proxy for long-term U.S. government bond prices (20+ years). The pushed back toward its all-time high of $148+ and is trading just above $143.

Even if you’re not trading bonds on a daily basis, this is an important niche within fixed income markets you should probably monitor. …

Saturday’s drone attack on Saudi Arabia’s oil fields is expected to see an uptick in crude oil volatility, and prices may jump $5–10 per barrel according to the Wall Street Journal. At the time of this writing and before futures markets open for the week, the crude oil volatility index (OVX) stood at $35.48 while implied volatility on front-month crude oil futures options hover above 35%. Saudi Arabia’s shutdown amounts to a loss of about five million barrels a day, or roughly 5% of the world’s daily production of crude oil, and officials believe they can get back to normal production by Monday. As such, any uptick in volatility is expected to be short lived. Depending on crude oil’s price jump when markets open, we are looking to deploy 1 standard deviation strangles on crude oil futures options expiring in the October cycle.