Perfect 2020 Hindsight: The Halftime Report

In 2020, one of the biggest winners has been the history books. Historians will look back at 2020 as the year the United States struggled with a pandemic, civil unrest, economic recession and the growing influence of technology on everyday life. Abnormality has also engulfed the global financial markets—arguably the most volatile period in market … Continued

Shanghai Sprang High on Beijing’s Blessing

Chinese stocks have been ripping higher the last couple weeks, and were stoked further on July 6, when the Chinese government appeared to give its blessing for the recent surge in speculative behavior. An article printed in the state-owned China Securities Journal last week suggested that Chinese citizens should look forward to the “wealth effect … Continued

Prophet to Profit: Turning Market Assumptions into Market Success

Investing and trading are about making money, but they also provide the personal satisfaction that comes with transforming ideas into positive returns.  Coming up with investment and trading ideas is referred to as “forming a market assumption,” or “building a market assumption.” Traders and investors build assumptions by developing a market idea that’s consistent with … Continued

Trading VXN, the Nasdaq’s Version of VIX

Investors and traders use the VIX, a well-known gauge of market volatility, to track “fear” in the marketplace. An increase in the VIX signifies that near-term options prices in the S&P 500 are rising, which can be an indication that “insurance” on the stock market is getting more expensive. Earlier this year, the VIX spiked … Continued

Vaccine Urgency Increases With Extension of First Wave

The United States is still fighting the first wave of the coronavirus pandemic—not the dreaded “second wave.”  “When you have 20,000-plus infections per day, how can you talk about a second wave?” says Dr. Anthony Fauci of the National Institutes of Health. “We’re in the first wave.” Echoing that perspective, Dr. Arnold Monto, a University … Continued

July Earnings Season: Will Double Volatility Double the Fun?

Americans love the Fourth of July’s fireworks, warm weather and celebratory beverages. But this time, an ominous feeling has taken hold. The pandemic has made large gatherings dangerous, and the financial markets remain extremely volatile. Stocks staged an epic rally in April, May and June that saw many return to their previous highs or even … Continued

Trading a Weakening Greenback With the New Small Dollar Index

The greenback can fluctuate in value based on a variety of complicated factors. These might be related to the U.S. economy, the global economy or a variety of major trends impacting the financial sector. But when it comes to recent behavior in the value of the dollar, many of those complexities appear to have been … Continued

Volatility Risk: It’s All About the Vega

When implied volatility moves up and down a lot, as it has been in recent months, many traders and investors become more attuned to their portfolio’s exposure to vega.   For those seeking to reduce their exposure to vega, a couple easy choices include closing open positions with high vega, or reducing them, as well as … Continued

Velocity Dominates: VIX Remains High

Understanding velocity in the markets is key to truly mastering the options/volatility trade. In the options world, it’s generally accepted that downside puts are more expensive than upside calls because markets have historically crashed more quickly than they’ve rallied. The additional risk premium observed within downside put pricing is frequently referred to as “volatility skew.” … Continued