Trends
The Smartest Guys in the Trade
By Tom Preston
Traders don’t need the highest IQ in the room—they can succeed with discipline, quick calculations, confident decisions and a little online help

People are sensitive about IQ. It’s a metric that purportedly reveals intelligence, and everyone wants to be thought of as smart—or at least smarter than average. And in the 100 years or so since IQ tests arose, proponents and opponents have argued vigorously for and against them.
One of the most contentious discussions of IQ centered on the 1994 book The Bell Curve by Charles Murray and Richard Herrnstein. The authors analyzed and plotted IQs and saw that they fell nicely along the shape of a bell curve, more properly known as a normal distribution. Most IQs were clustered around...
The Normal Deviate
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Counting on Volatility
By Tom Preston
|Scientists can only guess when the next pandemic or earthquake will strike, but with the help of volatility traders can quantifiably predict stock prices The year 2020 will be remembered… -
Bulls, Bears & Agnostics
By Tom Preston
|Which party will control the White House and Congress? The dirty little secret is the markets really couldn’t care less. You know Xi Jinping? General Secretary of the Communist Party… -
Stocks That Rock
By Yesi D
|Want to make a living from music? Put down the guitar and start picking music-related equities. As AC/DC said, it’s a long way to the top if you want to… -
Home Economics
By Tom Preston
|Even when it comes to a house, active investors don’t have to be passive Sitting down? Good. At home? Even better. Because beneath you lies your biggest single investment. Or… -
When Models Fail
By Tom Preston
|Models aren’t just for pricing options—they can (sometimes) predict the spread and mortality of a pandemic. Just keep expectations in check. Models, by definition, are not precise and, inevitably, the… -
Testing Vaccines and Trading Strategies
By Tom Preston
|Yes, active investment strategy has a lot in common with testing vaccines As though real-life were imitating a medical drama, COVID-19 is providing a glimpse into vaccine development. Testing a… -
Forget the Darknet
By Tom Preston
|The markets can provide the excitement active investors want—without risk of prison time Ah, the so-called darknet. The Wild West of the internet. Where anonymity—or as close as anyone outside… -
Day Trading in China
By Tom Preston
|Even in a communist country, people like to make money The Chinese began gambling at least 4,000 years ago, and they’ve made it a tradition ever since. It’s the reason… -
Options Trading: An Antidote for Division
By Tom Preston
|Smart options traders know that life—and markets—aren’t zero-sum games Trading can bring the country back together. That’s right. Trading. Anyone can see all the anger out there. Over politics, culture,… -
Volatility: Trading’s Best Crystal Ball
By Tom Preston
|Volatility provides a clue about what the future may hold for a stock Long-term stock trader? Short-term options trader? Medium-term money machine? No matter how an investor plans to extract… -
Auto Industry Autopsy
By Tom Preston
|If the average age of a car on the road increases 15% every 10 years, half a century from now the average car would be 23 years old and might… -
The Weather Trade
By Tom Preston
|Unlike the weather, probability-based investment strategies prove surprisingly predictable. Not everyone wakes up thinking about proactive investing—but most contemplate the weather almost every day. In fact, the Weather Channel is… -
Sports Wagering on the Money Line
By Tom Preston
|Exploring the probability of just about anything Exchange-traded option markets enable investors to play the role of a casino, taking the high-probability-of-winning side of a bet instead of playing a…