Short Puts in Small Stocks

Low-priced stocks and short put strategies are essential ingredients for active investors, but challenges arrive when mixing them A contrarian options trader might see a bullish opportunity when a stock gets pummeled to a low price. It’s a Pavlovian reaction, but there’s nothing wrong with that. There’s money to be made by taking on risk. When … Continued

Having a Meltdown Over Nuclear Energy?

Fortunately, there’s a formula for that. Let Poisson help you decide.  Humans function like pattern-recognition machines, and that’s generally a helpful trait. For example, they learn early on that cheeseburgers are delicious and don’t kill them, so they save time by zeroing in on cheeseburgers when they’re hungry. There’s a high probability that the cheeseburger … Continued

Pro Traders Know Probabilities Like Poker Pros Know Pot Odds

Many seasoned traders were not taken in by the meme stock hype It’s not opposable thumbs, extra cranial capacity or the ability to walk on two feet that separates humanity from animals. It’s hype. OK, maybe bees and ants let their friends know about the picnic. But humans have the unusual anti-competitive quality that spurs … Continued

The Tick is the Trade

… and Other Essential Trading Advice A pro trader dissects the three pillars to successful active investing Everyone who trades options wants to make money doing it. But how does someone reach that goal? A lot of strategies, techniques and products might work. Or not. Yet, three ideas can tilt the odds in favor of … Continued

Probability Reigns

Unless we know the chances they’ll come true, predictions mean almost nothing  The new year brings resolutions and predictions. Spend time with friends or family in late December or the first few days of January, and you’re likely to hear about their plans to get more exercise, lose weight or save money—all admirable choices.  But … Continued

Watch These 3 Inflation Indicators

I remember seeing the “WIN” buttons when I was a kid and having my parents explain inflation to me. The buttons, distributed at the behest of President Gerald Ford in 1974, stood for “whip inflation now.” Inflation was bad and whipping it was good. I also asked them what “burn the bra” meant, but they were … Continued

BIG TECH & THE LAW OF LARGE NUMBERS

HOW EXACTLY DID BIG TECH GET TO BE SO … BIG? To paraphrase ben franklin, those who would give up essential privacy to purchase temporary convenience deserve neither privacy nor convenience. Throughout history, humankind has used opposable thumbs and excess brain capacity to make daily existence easier. A line of convenience could be drawn from … Continued

Trading Digital Currency’s Volatility

Trading Digital Currency’s Volatility Volatility. Without it, the world would be pretty dull. It’s what makes cryptocurrencies so appealing to traders and so frightening to regulators. Dramatic price swings—both up and down—make cryptos some of the most volatile assets around.  But volatility breeds risk as well as rewards.  Traders look at the big rallies and … Continued

Trading with a Casino’s Edge

Active investing isn’t gambling for traders who know the odds When someone’s interested in options trading but doesn’t know quite how to approach it, ask a question that provides context just about everyone understands. “Who makes more money, the casino or the gambler?” They always get the answer right.  Casinos make more money than the … Continued