Forex Is Crazy

The above interview is only about 15 minutes long with Tom Sosnoff (of TastyTrade.com ) and Tim Sykes . Tim Sykes got his fame in trading penny stocks after he turned his $12,415 Bar Mitzvah money into $2 million bucks. He is character to say the least. Although he has done well trading penny stocks and training his students to do the same. Tom Sosnoff argues  that he is an outlier and that over time the statistical change of trading directionally and doing better than 50/50 is zero. As anyone who has watched Tom speak, he is all about increasing your probability of success (increasing your edge), doing this by selling premium and reducing cost basis.  Its an interesting video and very entertaining to listen to two very outspoken people in the trading space. And 1 favor that we ask:  If you like the hard work we put into our blog posts and videos, PLEASE help us out by sharing them. Click the share links below and share them on FB, twitter, etc. It really helps u...

I know that many of you out there reading this blog, wonder what happens when the call options you sold against your stock position get exercised? And then the next thing you are likely asking yourself is what you have to do? As you can see from the screen shot, I was notified via email from my broker at TD Ameritrade that my calls that I sold against my 1,000 shares of NLY were being exercised early. It was a good ride, I was able to collect a few dividends, but what would had been the 3rd dividend was called away from me right before the ex-dividend date. The call was in the money by at least a $1/share, so it made sense for the buyer of that option to exercise his/her option to collect the dividend. "Option Assignment is just a fancy term describing the fact that the owner of the option as exercised his right to buy your stock, since you as the seller of the option have the obligation (in the case of being short calls)." So what happens now? Everything from this point on i...

I didn't get a chance to see this interview when it first aired, but all I can say is WOW! The funny thing is the comment that Tom makes about the fact that professional SPX pit traders don't even know this lady exists and wouldn't believe that there is a retail trader that has made this much money. The video is about 52 minutes, but is really interesting and worth your time. Oh and by the way if you are not already a tasty trade member you should check it out here ! This is the best education you are going to find on trading, I personally don't think you could find a paid service that beats what Tom and Tony give each and every day. Look the membership is free when you sign up for a free account at think or swim. Good Luck Trading! In The Money Trades And 1 favor that we ask:  If you like the hard work we put into our blog posts and videos, PLEASE help us out by sharing them. Click the share links below and share them on FB, twitter, etc. It really helps us get more...

Chart Multi-Month Downtrend in AAPL: As anyone knows that has been trading AAPL for any length of time, it has been in a strong and decisive down trend for months (since September 2012). I know many, myself included are wondering when the move lower will be over. So I have decided to take a closer look at how AAPL stock has been performing technically. In the above chart I have drawn in support at $419 and resistance at $485. Once you draw these support and resistance lines, AAPL seems to be trying to digest the cliff dive it took from $705 back on 9/21/12. Because of the hear mentality my guess is a lot of people got hurt playing APPL and will be licking their wounds for sometime. With that said I do think AAPL has bottomed, but I also think it will trade sideways in this new consolidation channel for sometime to come. Option Trade Ideas: As you can see on the chart, AAPL stock is trading in the middle of its new trading range with implied volatility around 33%. I think impli...

Over the course of the past few years my activity (# of trades I make) and duration (how long I hold positions) has changed a lot. There are many reasons for this, but most of all the original reason I got involved in the financial markets was to find another stream of income. Due to my personality when I start something I get a little obsessive which was great for getting up and over the learning curve quicker than I probably would have otherwise. The past 2 years or so my involvement has been much more passive as I have put less positions on and with longer duration. Now part of this is the fact that the markets have progressively calmed down in terms of volatility but the other part is my desire to manage a more passive income stream. But another part of this has been due to the fact that the majority of my income that I am using to trade and invest with over the past 2 years is in a self directed IRA. My wife and I are now in a position where we have a large stash of cash ...

A few weeks back I wrote a post about mini options coming available, well guess what...they are finally here. If you use the think or swim trade platform than you probably got an email letting you know that they were available and a short list of the underlying's that would have listed mini options for you to trade. What you probably did not get is that the CBOE has decided they will not charge retail investors any fees to trade them. Here are the stocks you can trade minis on: GLD, SPY, AAPL, GOOG, AMZN. Although I am very excited to finally have a comfortable way to trade options on these "Big" guys, There are two things I need to happen before I do: 1) Volatility to come back 2) And time to pass to see how liquid they will be Until both of these criteria are met I don't anticipate I will be trading them anytime in the next couple of weeks. But I will say that if you all ready have some small positions in any of these names, it may make sense depending on your posit...

I remember selling my first covered call very vividly as it was a life changing experience. It was early 2000 just before the NASDAQ bubble burst and the stock was CSCO. A friend of mine had called and sent me to Yahoo Finance website and tried to explain to me how a covered call worked. The option chain and terminology was too confusing for me, I didn’t get it. He tried again a few weeks later and it was still Chinese to me. For some reason the third time through it clicked and I had the same experience that many have, you ask “Why doesn’t everyone do this?” I thought there must be a trick, I couldn’t be understanding it correctly because I would have heard about this by now, etc. You have to remember this was the year 2000, long before self-directed investing was the norm. Commissions were high relative to today and not every broker even offered you the ability to trade options. I remember having to jump through hoops signing documents and taking a test just to prove I knew what I wa...

I honestly wish I had more to share, but with volatility so low and markets at their highs I just don't see a lot of opportunity. And like I have been saying for the past 6 weeks or so, I continue to believe that the markets have a general theme of moving higher for 2013. Which to me means that volatility will remain at the low end of its range. Today we made yet another 52 week high at $156.10: With that thesis in tact I continue to prefer to hold my high yield covered called positions and collect the dividend and premium as I wait for opportunity to come back into the market by way of increased volatility. This is true for my IRA account. As far as my trade account is concerned the only position I have on is the short VXX with a short put on (covered put). Lastly I continue to believe that we are destined to take out the all time high set back in 2007 at $157.52: Good Luck Trading! And 1 favor that we ask:  If you like the hard work we put into our blog posts and videos, PLEASE h...

If you've taken the path that many retail traders have journeyed you probably started with buying stocks, then options, then futures. If you haven't yet made your way to futures this post is for you. Recently I've been looking through my past trades going back to 2008 before the financial crisis hit and I had just started to trade something other than a covered call. Prior to the end of 2007 and early 2008 I had solely been a covered call writer for about six years. I was looking through past trades to try and get a feel for what I used to trade and how my numbers were so great for so long. In a past post I commented that most of this was luck as I was long and writing calls from 2002-2008. But I found something that contradicts that. I got bearish in February 2008 and started dabbling in buying puts for the first time. Clearly I didn't know what I was doing and I'll show you why. Below is a screen shot from my trade log. Though I did great that month as the market ...

As we have recently taken out the highs on the year I continue to stick with my thesis that the theme for this market in 2013 is onward and upward. In a recent post I mentioned that I used the recent pullback when we had a spike in volatility to add some more positions. I am basically 95% invested in my IRA portfolio and will likely remain invested throughout 2013. I will however keep capital available in my trading account to make other trades as I see opportunity. I think we likely continue marching higher until the SPY reaches its highs from back in 2007 at $157.52 before we see any meaningful pullback. At some point I will likely get some short deltas mixed in the bunch to offset my long directional bias as a hedge. Good Luck Trading! And 1 favor that we ask:  If you like the hard work we put into our blog posts and videos, PLEASE help us out by sharing them. Click the share links below and share them on FB, twitter, etc. It really helps us get more exposure and grow IN THE M...

If you missed Part I you can find it here . I promise it won't be a trilogy. I left of by saying I got out of a large bet at exactly even sometime in late 2009 and was feeling extremely lucky. While my friends and family were down 50% or more in their retirement accounts I was feeling a bit guilty but also selfishly happy for myself. I'll be honest and say I was very nervous as the jobs I was preparing myself for in grad school simply weren't going to be available as the labor market shed 200K plus jobs a month. I sat in cash for a while more than happy to drawn down $2000 per month until I could figure out what to do with my life. I had no solid idea what I wanted to do, just something finance oriented, hopefully investment related. It hadn't yet occurred to me to try and trade the market for a living. It wasn't until a full year after school, a bunch of unanswered job applications, and a few failed interviews that I decided to take the plunge. If you haven't y...

I have mentioned in previous posts that I am teaching a few co-workers about trading and investing in the financial markets. The first few weeks was really all definitions to build a foundation that would leave them on solid footing to understand a real trade. In my opinion after you have a basic understanding of options the first strategy to play with is the covered call. Even if this was the only strategy you ever employed you would have edge of 80% of the other retail investors/traders out there. The covered call is a natural first strategy because it is the closest thing to doing what most people understand well, and thats buying stock. With the one difference is now we are going to sell a call against that stock that limits our upside, while at the same time providing us with a reduction in cost basis and an increased probability for success. I like to call the reduction in cost basis the "Cushion" or "Downside Protection". Lets take a look under the hood and s...

Well this has been a long time coming for me. I avoided it purposely for a long time but I'm definitely ready now a time has lessened the pain of past events. This has the potential to be a long post and I don't want to bore anybody so I think I'll probably break it up and maybe expand or share more as time goes on. If anybody wants more info or details feel free to email me at jasonandrewhaas@aol.com. The short story goes something like this, though I never set out to trade the markets for a living, it was only in retrospect that my account balance and trading activity suggested I had already been doing just that for about seven years. But to be clear when I say making a living my standard at the time lies somewhere far lower than most people. I was single with no debt and low overhead, about $2,000 per month. I also wasn't paying capital gains taxes as I had a large capital loss to make up for. I had about $250,000 in my account and though there was nothing you would ...

Reading Jason's post about how he is trading his position in the /ES along with the segment that I caught the tail end of this morning on TastyTrade.com got me thinking about a short position in volatility via the VXX. Being that both VXX and options are a decaying asset I just love the idea of this. With that said I am selling 100 shares of VXX and the Apr '13 $24 put against it for $2.46 giving me an effective short price of $26.46. And here is a chart that really gives you a visual of what I was refering too with respect to VXX being a decaying asset: This should be a fun experiment. We have 49 days until April expiration. My break-even is my short price of $26.46, which is only about 40 cents shy of the recent high that printed this week when the volatility popped more than 30% in a day. As I continue to see a long bias in the market I don't see a real threat of volatility getting way out of control. And if I am wrong, due to the nature of this particular product I woul...