Skew and Verticals: You’re Either with Me or Against Me
After the many years I’ve taught option trading, skew is probably one of the least understood concepts. In theory, applying skew is really easy. You want to sell thigs that are more expensive and buy things that are less expensive. Most people get that, but the issue with skew is that it’s not the price,…
IQ ‘Entertains’ Option Traders as Call Volume Surges
IQ Unusual Option Activity Report IQIYI Inc ADR (NASDAQ: IQ) is a Chinese online entertainment company that offers video games, online games, live broadcasting, social media platform, etc. The success of iQIYI's live action adaptation of “Hikaru no Go” made news yesterday. The first episode gained significant acclaim internationally and is shows the quality of…
Stocks Gone Wild: Float Analysis of Parabolic Movement
One the hallmarks of a frothy stock market are when a litany of stocks are going parabolic. A parabolic move is when the angle of stock price movement is north of 60 degrees. While that is a general definition, it doesn’t speak to the potential unsustainability of movement without other considerations. While price is “king,”…
AGNC Attracts Bearish Option Interest as Yields Rise
AGNC Unusual Option Activity Report The benchmark 10-year U.S. Treasury note saw its biggest intraday sell-off in a while and option traders for AGNC Investment Corp (NASDAQ: AGNC) appeared to take notice. AGNC is a company who invests in mortgage REITs and finds itself in a precarious position since selling off during the Corona Crash.…
Proof of Work vs Proof of Stake: Cryptocurrency 101
Proof of Work vs Proof of Stake If you’ve never heard of the terms of proof of stake (PoS) and proof of work (PoW) you’re probably in the super majority of investors. That’s because you’ve probably never entered the realm of cryptocurrency. Entering this world opens you up to a whole new set of investing…
XBI Option Traders Looking for a Bearish Close to 2020
XBI Unusual Option Activity Report Another Monday and another Vaccine story lifting biotech and ETFs like the SPDR S&P Biotech ETF (NYSEARCA: XBI). Today, it was Moderna Inc (NASDAQ:MRNA) announcing its vaccine was 94.1% effective and was 100% effective at preventing severe forms of COVID-19. Also, the phase 3 clinical study showed no serious safety…
Risk Ratios: An Early Indication of a Short Squeeze
Risk Ratios Intro Many years ago, I was working on ways to identify market trends using what I called “Risk Ratios.” The idea was to use ratio analysis of major market indices or index ETF products to gauge things like inflation expectations, market valuation, cyclical trends and large-scale short covering. Every Friday, I take time…
TLT Bears See Opportunity in Yellen Treasury Announcement
TLT Unusual Option Activity Report As Joe Biden continues to lay out his cabinet selections, one selection may have bond bears looking at the iShares 20+ Year Treasury Bond ETF (NASDAQ: TLT). The selection of Janet Yellen as Treasury Secretary is one that should be good news for inflationists. The diminutive but not di minimis…
Options 101: Options Dividend Risk and How to Avoid It
Dividends Meet Options If you’ve made an option trade, you’ve probably seen the disclaimer warning of potential dividend risk. Most probably gloss over that information and never consider how their option trades could be impacted. However, we got flooded with emails last week asking questions about this type of risk, which was a great to…
Plug Power Inc Surges on Charged Option Activity
PLUG Unusual Option Activity Report It hasn’t been a week since Plug Power Inc (NASDAQ: PLUG) dropped around 8%. The reason for the decline was on news of a $750 million share offering. However, that was then, and this is now. The share price surged 10.3% on Monday as Baron’s discussed the PLUG as a…