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 value for a European-style option. One of these inputs is the volatility. Modern traders, however, often use Black-Scholes in a different way: 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...
Another Bearish Sign for Gold?
The CME Group recently lowered its initial margin rates for gold, silver and platinum. That is a move that is usually supportive of prices rising in the future. In other words, it is a very bearish sign for More...
What is Copper Telling about The Future Price of Gold?
Things happen for a reason, which is why the exchange traded fund for copper (JJC) has been surging as the exchange traded fund for gold (GLD) has been plunging. Copper, The Red Metal, is used almost exclusively More...
Candlestick Strategies
Although candlesticks theory was invented over three hundred years ago by a Japanese rice trader named Sokyu Honma it is still considered to be so useful and relevant to present day trading that many Forex strategies More...
Gap Trading Strategies
Gaps are areas on trading charts where price has moved rapidly upwards or downwards without leaving any discernible evidence. Consequently, gaps are displayed on candlestick charts by a significantly large distance More...
Gold Prices Poised to Test Higher Levels
Gold prices edged higher and remained buoyed in the face of a relatively strong dollar. The dollar continues to benefit from interest rate differentials that are moving in its favor relative to German and Japanese More...
Asian markets rise in early trading, G20 to meet tomorrow
Asian markets got off to a good start on Thursday as traders returned after the Chinese New Year holiday. Hong Kong saw a rise of 0.75% in early trading while Japan’s Nikkei index was bolstered by a weakening More...