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A new book has just been released, that will the world of risk "outside-in."The Uncertainty Advantage (Leadership lessons for turning risk outside-in) is written by Gary S. Lynch, a career expert in risk management and related topics. Lynch's latest…
One of the strongest forms of confirmation is a double reversal signal.For example, the current chart of Wal-Mart shows how two bullish reversal candlesticks show up on the price chart, and how to interpret them. In this case, candlesticks provide…
The trader’s dilemma: Even when you see a strong reversal pattern on a chart, how do you know it’s the real thing? The answer is that any indicator needs to be independently confirmed. This is where East (candlesticks) meets West (traditional…
A one-day session with a variety of interpretations is the spinning top.This is a session with a relatively small real body of either color, showing up about mid-range in the session, and with both upper and lower shadows longer than the real…
When it comes to chart analysis, unusually large and small ranges have a lot of meaning. Measuring the distance between opening and closing price tells you a lot when trends develop or begin to lose momentum. Some specific patterns are excellent…
In Japanese, "marubozu" means "with little hair." This is a reference to the expected small or non-existent upper or lower shadows on this candlestick.The black marubozu is one variety of a long black candlestick and may have small upper and lower…
The federal tax rules concerning options are among the most complex sections of the tax code. This has led to many misunderstandings. For example, many traders have heard that some covered calls are "unqualified." What does this mean?It means that…
The naked call is probably the highest-risk option strategy of all, right?Not necessarily.Most options traders associate risk with specific strategies. But you might want to question this assumption, based on a different definition of risks in…
"You are welcome. These topics can become complex and careful definition of terms and explanation of trading mechanism are essential in development of assets and pricing models. I appreciate your feedback. I hope you will also take a look at the…"
Traders, especially covered call writers, love the forward roll. It helps avoid or defer exercise, creates additional income, and helps keep ownership of stock that is on an uptrend.But there are potential problems. Among these are the following…
"Thank you for your comments. I would expand on the definition of calls and puts by pointing out that both can be bought or sold. In other words when you buy a call, you buy the right to buy shares; and when you buy a put you buy the right to sell…"
Options - Alternative To Black-Scholes - by Michael C. ThomsettUsing the Black-Scholes pricing model for pricing options is not the best system for trade timing. Given the numerous flawed assumptions in Black-Scholes, traders may consider an…
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