More about volatility skews, crunches and smiles
Regular readers will by now be familiar with the fact that one of the most popular options valuation models out there is the Black-Scholes model. Black-Scholes uses a number of inputs to calculate a fair market More...
Capital Requirements Directive
Developed by the Basel Committee on Banking Supervision to help resolve part of the global financial crisis, Basel III provisions came into force in the European Economic Area (EEA) in January 2013 following the More...
Managing an open options position
Introduction Some traders prefer to set up an options position and then forget about it until the expiration date. While this might be possible with strategies such as buying calls or puts, or even in the case of More...
Market Volatility
The volatility of a market is the measure of uncertainty associated with the price movement of an underlying financial asset. Volatile markets will see vigorous price movements regularly while asset prices in More...
Strike Price
The strike price is a term that is typically associated with stock and index options trading and is quite simply the price at which a contract can be exercised. With regard to options, this will be the price that More...
Options frontspreads explained
Introduction In a previous article options backspreads, which benefit from volatile trading conditions, were explained in more depth. Today’s discussion is about its counterpart, the options frontspread. A frontspread More...
5 Advantages to Trading CFDs over Stock
Over the last 20 years CFDs (Contracts for Differences) have become increasingly popular among traders in a long list of countries. There are good reasons for this state of affairs, a few of which are summarised More...
Forex Fundamental News Strategies
Government news releases containing important national economic data can have major effects on the Forex market causing price to sometimes spike by hundreds of pips within a matter of minutes. The volatility produced More...
Bear Straddle
A Bear Straddle is a derivatives option trading strategy that is considered speculative. A Bear Straddle Option position occurs when the options trader buys a Bear or short in both a Put and a Call of the same underlying More...
Option Collar
An Option Collar is considered to be a protective strategy that is usually used to lock in profit from an equity trade once it has experienced large gains. Options Collars are often entered upon by those who own More...