Trading Options and Volatility

By Donald Scott

In this article we'd like to explain adjustment beliefs which can be practical in running an options account. This individual strategy can be practical to each and every type of option spread such as the Credit Spread, Iron Butterflies, Iron Condors, Double Diagonals, as well as others.

Right now as we write this article in 2008, the VIX is at its higher range for the last couple of years, causing options to be expensive. So if making adjustments at the present time, each trader needs to check where volatility is and forecast where it is leading to. Should we really purchase expensive, inflated options, or should we sell them to somebody else? What is the most recent volatility forecast in today's stock market?

A very common mistake that option traders make is buying or selling options at the wrong time. If we buy options when the volatility is at a high, we are entering a trade with odds against us. Option traders that do this don't realize why their options lose value so fast. Every option trading adjustment should be made by thinking of the option Greeks and volatility. We really need to understand these fundamentals to succeed in the options market.

A STUDY IN TODAY'S OPTION MARKET

For example, we have on a Butterfly spread and the market has been up-trending for a few days. In this case we might need to make an adjustment on the Butterfly or possibly on our whole portfolio. Options trading requires some management or we can take on great amounts of risk. So, if this is the situation, we'd be looking at adjustment ideas with IV in mind. We'll study our price chart and also the IV chart. Perhaps we'll find that the IV is on support now, and it looks like it's going to rise again.

Options have endless possibilities. Many traders have no idea what adjustment to make when they see their portfolio in danger. If we learn and deeply understand the fundamentals, then adjustments are much easier. They just make sense. So in this case we may see the VIX is about to rise. We could place a long debit spread on the VIX itself as insurance. We could also use a Calendar spread to the downside. We could also use a Broken Wing Butterfly to the downside. Each of these mentioned strategies can take advantage of a rise in IV since they are positive Vega. Also, if your current portfolio is negative Vega, adding positive Vega can help you hedge any loss that you might incur from a rise in IV. Remember, with option trading we are trading direction, volatility and time.

There are many positive Vega option strategies, but some of the most common ones are Debit Spreads, Broken Wing Butterflies, Short Condors, Short Butterflies and Calendars. In our options mentoring course we cover them in great detail.

To conclude, if the stock market moves against you when you are in an option spread, then always study the IV of your underlying asset. Knowing what is going on with volatility can really help you make better decisions on managing your portfolio. This will definitely reduce your exposure to risk while increase your chances of being a profitable trader. - 23199

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How Forex Trading Is Better Than Stocks And Futures

By Rakesh Tambe

Now a days everybody knows about Forex Market or Currency Trading. Everyday the value of a particular currency changes with respect to other currencies. In Forex Markets some currencies may outperform others giving consistent gains. Most of the people believe that they they know enough about the financial markets and stock markets. Trading forex can be good option if you have experience in stock markets. But before jumping into the forex the difference in the two markets must be understood.

You can start trading forex with Fap Turbo. This is an automated currency trading robot and makes money without you having to do anything.

The most notable difference between stock trading and currency trading is that forex market is not regulated or governed by any central authority. The trades are not governed by any government body. This results in eliminating the arbitration in case of a dispute in trade. The trades are mostly based on mutual agreement. The forex market thus works on the trust among traders.

This trust among the traders make the forex market to work at the same level for all the traders giving everyone an equal chance to make gains. This is very much different from the well structured stock market. As the traders have to rely on each other for trading, they have to cooperate with each other while they are also competing against each other.

The second key feature that separates the currency trading from the stock market is to take advantage of the inside information from the contacts in the industry or business. While using such information is restricted by law in the stock market, you can use it freely in the currency trading. You can position yourself for gains if you know certain facts in advance. Ironically, this insider news and facts are leaked to the traders in forex market days before making them public.

Stocks and futures are traded through a broker who makes a nice commission on the transaction. Currency trading markets do not use commissions, so the investor must know this fact. For this very fact, currency trading might not be the first choice for the novice trader. You can start your portfolio with some solid standing stocks while working with a broker, and then slowly start diversifying after gaining some
market knowledge and some basic financial education. Once you are ready for currency trading, know the same simple rules that apply to all trades: know your market, know your limits and understand the risks involved.Only invest the money that you can afford to lose and won't need for the period of investment.

The other advantage of currency trading is that there are a number of automated robots available that can handle all the work involved and trade automatically. Fap Turbo is the leading robot in currency trading.You can learn all about Fap Turbo here and make yourdecision after reading user feedback. Most of the people recover their investment in a couple of weeks. - 23199

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Debt Consolidation

By Bob Jones

Where can you get debt consolidation information? It's really not that difficult to find; and the debt consolidation information is usually available free in some places! If you have a bad credit score, then you can get debt consolidation information by reviewing the free do-it-yourself kits at the local libraries. Debtors can go to the public library and find debt self-help books that will lead you from beginning to end through the steps of paying off or consolidating your debts all the way to credit repair.

Most libraries will let you photocopy or print the forms inside the guides. This means that you can simply fill in the lines and submit the papers to the right sources. By doing this, you will soon be on your way to debt relief. This is probably one of the easiest sources of debt consolidation knowledge.

Creditors prefer debt information in the form of a letter rather than a phone call, since the letters explain in more detail than an ordinary telephone message will and it is also hard evidence as well. In addition, letters are also better for you too, since, if you are being taken to court for the debts you owe, you will have hard evidence too showing that at least you made an effort to repay your debts. Written information holds up in court and is better in any situation than word of mouth.

So, you should keep photocopies of all the letters you send to and all the letters from your creditors. This should include recording phone conversations it is worth getting a machine, recording dates, recording time, and definitely recording the name of the person who called you and his/her location. You should provide a brief outline of the conversation and store the files in a safe location. This could all be very useful debt consolidation information.

If you discover errors on your statements or anything that seems a bit weird, don't hesitate! Contact the creditors immediately. Furthermore, if you own a credit card, and they try to force you to pay for damaged packages, remember that it is illegal in the USA for anyone to try to make you pay for damaged goods, just as long as you did not damage the goods yourself.

The Internet can be just as good source of debt consolidation information, but not everyone has a computer or is competent at using it and debt is such a personal and often embarrassing subject that many people would be hesitant to ask someone to assist them search the Internet for debt consolidation information.

Debt consolidation is usually a long process, but if you get the right debt consolidation information, you will find a way to relieve your debt gradually and you will eventually reap the benefits of your efforts when you finally become debt free. - 23199

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Factoring in Busies Finance: Avoid This Mistake!

By Asem Eltaher

What does the concept of factoring in business finance tell you?

The idea behind is to sale commercial accounts invoices to other people at lower prices. This person who is interested to get this invoice is also known as a factor. Traditionally, this buyer should be in the state to hold the whole responsibility. In few words, he has to collect the payments and he has to take the risk of having some credit losses on the accounts.

Does it worthwhile to invest your time doing this?

Factoring in business finance is one of the most common saving money tips. This option is different from normal loans and you do not have to shell money out for commercial loan rates.

In the mean time, this deal is very welcomed by a wide range of merchants. Nevertheless, the tremendous increase of this concept is sometimes overlooked or even ignored. This is really the case in spite of the attractive discounts offered on the receivables.

Well, which risks should you probably consider?

Nothing is ideal and do not accept the first offer you find. Indeed, the biggest problem with the merchants is the non-availability of the cash needed for different investments. This would consequently lead to a problem and, therefore, they have to wait for a long time till they make any profit.

Should this disadvantage prevent you from going on?

Honestly, it should not! If the merchants are lucky and look well for the perfect buyers, then they will definitely find people who are interested to pay them immediately and, therefore, there is no any need to wait. Then, they can use this paid cash to invest in raw materials or pay off debt or cover payrolls.

If you do this mistake, you will definitely fail!

Whether the quality of these services is high or low, it is strongly related to the kind of business your company provides. However, never forget that many companies that claim professionalism to do factoring in business finance are just facilitators. They play the role to sell leads and it is your duty to check the reputability of this company.

The only thing that these companies end up doing is sending your application to a lot of companies and all you end up receiving nothing but spam emails. They might also introduce you to companies beneath yours or companies you would never like to work with.

So, what would be the optimal solution?

From my personal experiences, the optimal solution is recourse factoring. In this method, the buyer does not risk bad debts. In few words, he will be able to get his money back from you in case the customer does not pay up. An agreement needs to be drawn up that specifies the number of days after which advances should be returned. - 23199

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Currency Profile Of British Pound (Part I)

By Ahmad Hassam

British Pound is also known as the Cable. The name most probably struck in the late nineteenth century and the early twentieth century. United Kingdom (UK) is the fourth largest economy in the world. UK has a service oriented economy with manufacturing representing a small part of GDP. Manufacturing is only equivalent to one fifth of GDP.

The British capital market systems are one of the most developed in the world and as a result finance and banking has become a strong contributor to the GDP. London is still the forex center of the world. London Stock Exchange is still the second most important stock exchange in the world after the New York Stock Exchange.

Although majority of UK GDP is from services, UK is the largest producer and exporter of natural gas to EU. The energy production industry accounts for 10% of GDP which is one of the highest shares of any industrialized nation.

Trade deficit is an important economic indicator for determining the strength or weakness of a currency. Overall, UK is a net importer of goods with a consistent trade deficit. Increases in energy prices such as oil will significantly benefit the large number of UK oil exporters. This is important for forex traders as energy prices are positively correlated with GBP.

The United States on an individual basis still remains UKs largest trading partner. However, the largest trading partner of UK is the EU with the trade between the two accounting for almost 50% of UK imports and exports activities.

Trade surplus or the trade deficit is determined by the difference between the exports and the imports of a particular country. The leading import sources for UK are France, United States, Germany, Belgium and the Netherlands. The leading exports markets for UK exporters are the France, Germany, Ireland, United States and the Netherlands.

The possibility of Euro adoption will still be in the backs of minds of pound traders for many years to come. UK had rejected adopting Euro as its currency in June 2003. Now, if UK decides to join EMU, it will have significant ramifications for its economy.

The most important of which is the adjustment of UK interest rate with the Eurozone interest rate. One of the primary arguments used against adopting the Euro is that UK has sound macroeconomic policies that have worked very well for the country.

UK is a highly political country with government officials highly concerned about the voter approval ratings. There are many arguments in favor of Euro entry and many against. However, if the voters do not support Euro entry, the likelihood of EMU entry will decline. Right now Brits are not in favor of a Euro entry. The voter opinion can change overtime.

Bank of England: The monetary policy of UK is under the control of The Bank of England (BOE). BOE is the UKs central bank. BOE is one of the oldest central banks in the world. The Monetary Policy Committee is the nine member committee that sets the monetary policy for UK. The committee was granted operational independence in 1997. It consists of a governor, two deputy governor, two executive directors of the central bank and four outside experts. - 23199

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading stocks and currencies. Try These 1500 Pips A Day Forex Signals From Heaven. Know Forex Rebellion!