Home > Blogs

Blog Posts

RSS Feed Subscribe  RSS details

Michael Thomsett

Options: Comparison of Risks in Synthetic Stock

By Michael C. ThomsettJun 28, 2012

The use of offsetting option positions creates "synthetic stock" - the no-cost or low-cost option combination behaves just like stock. The risks in the position, by the way, are the same as those risks in 100 shares, but for much less cash outlay.

Michael Thomsett

Options trading: Confusion about the Meaning of Volatility

By Michael C. ThomsettJun 27, 2012

So many traders are confused when they hear about "volatility." Why? Because there are so many different meanings of the word, five to be precise. Understanding the differences helps to manage options trading.

Michael Thomsett

Options Trading: Dangers of Rolling Covered Calls

By Michael C. ThomsettJun 22, 2012

Most covered call writers know how to roll a covered call to avoid or defer exercise. But this can create unintended losses or even have serious tax consequences.

Michael Thomsett

Options Trading: Is Diversification Necessary?

By Michael C. ThomsettJun 21, 2012

Traditional wisdom tells us that diversification is a foundation of wise portfolio management. Is this still true? Or are there ways around it? Can you put all your eggs in one basket without any risk of loss?

Michael Thomsett

Options Trading: A Style Guide

By Michael C. ThomsettJun 21, 2012

The world of options involves a complex jargon, listings, and nomenclature. Following is a suggested style guide for consistency is how options information should be expressed.

Michael Thomsett

Options Trading ? Another Look at Risk

By Michael C. ThomsettJun 20, 2012

Options traders need to constantly revisit the issue of risk. No one can escape the various kinds of market risk, and options are exceptionally associated with this reality. Even though many strategies are very conservative, every trader needs to know the risk levels involved in a strategy -- before they commit cash.

Michael Thomsett

Options: Credit Puts in a Swing Trading Program

By Michael C. ThomsettJun 15, 2012

Swing traders normally use shares of stock; but do they short sell to play a bearish trend? or do they hold and wait for the next bullish move? If they do, they're missing half of the swings. Options make more sense, anjd short optinos could make the most sense of all.

Michael Thomsett

Options Trading: Why Buy Insurance Puts?

By Michael C. ThomsettJun 13, 2012

The insurance put protects your appreciated stock by limiting losses in the event of a price adjustment. But it only works under specific circumstances.

Michael Thomsett

Options trading - Confusion About Time Value

By Michael C. ThomsettJun 12, 2012

Are there two types of option premium? or three? Many define only intrinsic and time value, but the truly important portion of premium is neither of these.

Michael Thomsett

Options Trading: Are Uncovered Positions Always High Risk?

By Michael C. ThomsettJun 12, 2012

Options traders have been cautioned from the beginning that uncovered options are always high-risk. But this belief should be challenged. It's not the nature of a strategy, but when it is opened or closed that determines risk.

Michael Thomsett

Options trading: What Exactly Is a Synthetic Derivative?

By Michael C. ThomsettMay 24, 2012

Everyone heard about the problems at JPMorganChase - losing $2 billion or more writing "synthetic derivatives" - but what exactly does that mean?

Michael Thomsett

Options Books

By Michael C. ThomsettMay 1, 2012

I invite everyone to check out my options books ... these are written to provide useful education and strategic information on  a range of strategies.

< Prev Page 1 2 3 4 5 Next >