ZoharCho

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The Implied Volatility is very high near the 200% percent. Rarely it stays long above this number. The range between the break-even line at expiration is relatively big. 60% probability for some profit. If the IV will drop sharply It will be wise to get out. I diversify my portfolio, it is never "ALL IN".

ZoharCho

NVDA tested the support line, made a false breakdown. In addition, news that NVDA got picked by NIO for its self-driving solution. We are after a period of balance. All of this supports that a strong move up is possible. Also, this pattern is very similar to AMD, before it made its huge move up... Stop loss @ 504.96 if it gets there, there is a strong...

ZoharCho

PLTR is forming a triangle and also is at the bottom of an uptrend channel. The market is slow today, but when it will resume its uptrend, this stock could pop, nicely :) Expensive can get a lot more expensive, as many great traders used to say.

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The ratio call spread for debit is the same strategy as ratio call spread credit. But now, the upper and lower strike price are farther apart. This change, give different mathematical results as you can see on the chart. If you didn’t read the previous post, please do. In the chart we see a ratio spread of 2:1, in this case, the options that were sold are now...

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A ratio call spread is a neutral strategy in which we buy several calls at a lower strike and sells more calls at a higher strike. In a ratio call spread with credit, there is no downside risk. The ratio spread that we see on the chart has a ratio of 2:1. We can see from the chart the non-linear behavior of options. Inputs: MA (Mastercard) Credit received -> 3.1...

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A lot of traders don’t understand why when they entering a spread they don’t receive most of the money even if the stock price is going their way immediately, in this post we will see why. A spread is a position in which we buy one option and sell another option on the same stock. All the options are Calls, with put spreads all the options are puts. There are...

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Iron Condor - a spread with limited risk and limited profit, using four different striking prices but the same expiration date. The position is a combination of puts and calls all of which are Out of the money. The maximum profit is realized between the two inner strikes, and the maximum loss is realized outside of the higher and lower strikes. This strategy is...

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In the chart, you see the strangle strategy when sold, I will show what will happen if the implied volatility changes, you can see this strategy being bought in the next post. You can come back to this post and watch how things play out. As a rule of thumb, strategies are sold when implied volatility is relatively high and bought when implied volatility is ...

ZoharCho

Just wanted to pay your attention to a phenomenon called: Visual Perception in Psychology. Your brain is always looking for patterns, it craves patterns! So why use camouflage on your charts? When you are using multi-color candles/bars, you are decreasing your ability to detect patterns, it is just science. Your brain looking for patterns, one of the...

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Hello traders, in this post I will explain different types of ETFs and what is an ETF (Exchange-Traded Funds). ETF for example is a package of different stocks that have similar characteristics. One characteristic could be that they all are in the same sector. Some ETFs track indexes, commodities, and more. Those packages are listed on an exchange and are traded...

ZoharCho

Hello traders, a couple of facts on the VIX that you might didn’t know. VIX is a 30-day volatility measure. The calculation is based on two strips of SPX options that are used in the VIX calculation (now for example November and December option strips), the strips have a different weighting each day. Every day that passes we have fewer days in the current month...

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I decided that before explaining complex strategies, I need to explain call options and put options and differences between buying and selling. (I'm adding down calls chart) The term "the option is worthless" meaning that the stock price didn’t finish above the strike price in calls or finish below in-puts. Buy Calls – Bullish “strategy”, you need to select a...

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Hello traders, Volatility is a measure of how quickly (the speed) the stock (but can be any security) moves up or down in price. Statistically, it is usually calculated as the standard deviation of stock prices over some time, usually annualized. This statistical measure is expressed as a percent. A stock that has a 90% volatility is more volatile than a stock...

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Hello traders, In my previous post, I wrote about, At the money / In the money / Out of the money call option, basic definitions, and the 6 factors that determine the option pricing. I remind you that options pricing is based on the partial differential equation from the Black–Scholes model, the solutions to this equation are not linear, which means it is hard to...