Options Strategies

Most investment academics will tell you that the market is “efficient.” These scholars believe that there is no reliable way to generate an “above market” rate of return without access to information that is not available to the public. This efficient market hypothesis rests on a key assumption. This assumption… Read More

When a trading strategy requires the use of options, it’s very important to understand how option prices will react to changes in the underlying security. At first glance, option pricing can appear relatively simple. The price of a call option increases as the underlying stock (or ETF) goes up, and… Read More

Stock charts are used by traders to forecast price action. These patterns are useful, but they are certainly not infallible. Rather than using them for market forecasts, I prefer to use patterns to develop complete trading strategies. Each pattern offers a forecast of the potential gain and a point where… Read More