Option Information.


Dear Insider—Jeff Bishop here.



Meme stocks have been all the rage this month. And while this trend will come and go—there is one theme that I believe will have greater staying power—options and the incredible leverage they offer the retail trader.



In previous posts we’ve had Jason Bond explain what gamma squeezes are.



But today I want to pull back a little...and talk about some of the basics option principles.



Why?



Because I believe there is a lot of opportunity for everyday folks to take advantage of them...but without a proper knowledge base...they’ll either get discouraged or make avoidable mistakes.



So let’s get started…



Below is a screenshot of an option chain for NUGT from a few years ago, when the ETF was trading at $7.64. The closest calls to being at-the-money are Feb $8 calls. The yellow highlighted rectangle, along with the in-the-money $7 calls, are displayed below.



Greek Interaction.png



In this lesson I’ll discuss the behavior of an option based on the Greeks. Keep in mind these changes are not constant. With every tick, every one of them changes.



Let's start with a review of the four main Greeks: Delta, Gamma, Theta, and Vega.



Delta


Delta is the most straightforward of the Greeks. It tells you how much your option will move if the underlying stock moves $1.00 (in either direction). When an option is at-the-money, Delta is approximately 50. The more out-of-the-money the option is, the lower Delta will be. The more in-the-money, the higher it will be.



An excellent way to look at this is this: One option contract leverages 100 shares, all things being equal, an option with a Delta of 50 is like holding 50 shares. A very deep in-the-money option will move very much like a stock position.



At expiration, the Delta of an option will be either 0 or 100 for a call. In other words, calls expiring at least one penny in-the-money will be converted to stock and options. For put options, the Delta ranges are 0 to -100 and work the same way.



Gamma


Gamma tells us the amount by which Delta will change for every dollar move in the underlying stock. The higher Gamma is, the bigger the move in Delta will be. Gamma is expressed in fractions of a dollar. So, the Delta of an option with a 25 Gamma will increase or decrease by .25 for every $1.00 move (up or down) in the price of the underlying stock.



Gamma is the same for both puts and calls. Gamma is positive if you are long and negative if you are short. Gamma is highest when an option is at-the-money and decreases as an option gets deeper in-the-money or deeper out-of-the-money. As with all the other Greeks, Gamma changes as the price of the underlying stock changes.



Gamma can be very sensitive as we approach expiration. As noted with Delta, an option will either close in-the-money or expire worthless. That said, Gamma can move the final week of expiration.



You've probably noticed with AMC and CLOV recently.



Gamma is essential to watch as we approach expiration. For example, traders who short options with low Delta's might think it's safe. However, they forget to consider how quickly that can change. By reviewing your Gamma exposure, you'll avoid making that mistake.



Theta


Theta tells how much the price of an option will change over one day. This number is variable and accelerates as we approach expiration.



It is highest when an option is at-the-money only because there is no intrinsic value in the option, making up only time value. While it is highest when an option is at-the-money, Theta will decrease as the option gets deeper in-the-money.




Theta Value vs Price.png



An option that is deep in-the-money is made up of mainly intrinsic value. On the other hand, Theta may be small in nominal terms for an out-of-the-money option but relative to the option price Theta is high.



Theta increases over time at an exponential rate as the option nears expiration. At expiration, at-the-money and out-of-the-money options will expire worthless as Theta erodes.



And, finally, as the image below demonstrates, the further away from expiration an at-the-money option is, the smaller Theta will be.



Distant Thetas.png




Whether you're long a call or put, your position will have a negative Theta--- time is working against you. On the other hand, a seller of options has a positive Theta. Option sellers benefit from time decay.

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=164310614

PI Cryptocurrencies

https://minepi.com/white-paper

Ray Dalio 03/19/21

Cost saving tricks.

https://www.zerohedge.com/personal-finance/29-tips-fighting-inflation-home?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+(zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero)

Options Courses

https://academy.investopedia.com/products/options-for-beginners

SILVER CME

https://www.cmegroup.com/trading/metals/precious/silver_contract_specifications.html

COPX

https://seekingalpha.com/news/3667115-copper-tumbles-off-10-year-highs-as-spiking-yields-shake-investors

AGQ

https://seekingalpha.com/article/4409670-proshares-ultra-silver-etf-bullish-leverage-volatility-low

https://stockcharts.com/freecharts/symbolsummary.html?sym=agq

$KNDI Now $2,500 rebate for its Electric Vehicles in Texas USA.

$ALYI "Hemp Battery " https://finance.yahoo.com/news/alyi-alternet-systems-confirms-hemp-143657565.html

George Gammon

https://www.zerohedge.com/news/2021-01-11/george-gammon-prepare-endless-qe

2021 US Dollar

https://www.zerohedge.com/news/2021-01-11/2021-may-be-year-world-loses-confidence-dollar

Louis Gave 2021

https://www.zerohedge.com/markets/huge-reversal-louis-gave-warns-inflation-will-come-back-vengeance

https://twitter.com/TheMrDev

https://experts.richdadworld.com/assets/files/rd_pdf7-5_ways_to_boost_financial_outlook_in_2021.pdf

Full Year-Ahead Calendar: All The Key Events In 2021

https://www.zerohedge.com/markets/full-year-ahead-calendar-all-key-events-2021?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+(zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero)

$MJNA $.05 coming

2021 Inflation estimates

https://www.calculatedriskblog.com/2020/12/question-5-for-2021-will-core-inflation.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+CalculatedRisk+(Calculated+Risk)

https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20201216.htm

2020 ETF winners

https://www.investing.com/analysis/etf-winners-and-losers-in-2020-200549160

SILVER

https://www.investing.com/commodities/silver

https://www.zerohedge.com/markets/dollars-demise-boom-2021?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+(zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero)

Things You Need to Know About The Mediterranean Diet

Need to 'copy and paste' the flowing link.

www.medicalnewstoday.com/search?q=Mediterranean+diet&p=1

Everything you need to know about hypertension

https://www.medicalnewstoday.com/articles/150109.php#management-and-treatment

10 Foods That Help Lower Blood Pressure, yeah it's that time.

https://10faq.com/health/foods-that-help-lower-blood-pressure/

10 Foods to Avoid with High Blood Pressure

https://10faq.com/health/foods-to-avoid-with-high-blood-pressure/

10 Signs of High Blood Pressure

https://10faq.com/health/signs-of-high-blood-pressure/

10 Ways to Lower Your Blood Pressure

https://10faq.com/health/ways-to-lower-blood-pressure/

During the next recession.

Buy a U.S. index fund when markets are down 20 to 25%; add a developed global index fund when markets fall by 30%. And if we are lucky enough to enjoy a 35 to 40% decline (that's assuming you prepared for this moment), buy emerging-market stocks.

https://www.google.com/search?client=opera&q=best+U.S.+index+fund&sourceid=opera&ie=UTF-8&oe=UTF-8

https://www.google.com/search?client=opera&q=best+global+index+fund&sourceid=opera&ie=UTF-8&oe=UTF-8

https://www.google.com/search?client=opera&q=best+emerging+market+funds&sourceid=opera&ie=UTF-8&oe=UTF-8

MJ ETF

MJ Chart, Weekly

MJ crash after Canada legalizes.

https://www.zerohedge.com/news/2018-10-22/pot-stocks-crash-most-record?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29

HEMP Inc.

MUSIC

David Gilmour - Comfortably Numb Live in Pompeii 2016

Of the 2017 total $820 million U.S. hemp market, Hemp Business Journal estimates that hemp foods accounted for 17% ($137 million); personal care products for 22% ($181 million); textiles for 13% ($105 million); supplements for 5% ($45 million); hemp-derived cannabidiol (CBD) for 23% ($190 million); textiles for 13% ($105 million); industrial applications for 18% ($144 million); and other consumer products including paper and construction materials for 2% ($16 million) of the market.

https://www.thesimpledollar.com/best-home-equity-loan-rates/

From NAV at TT

"I am in cash and will make my decisions based on how this plays out on Monday.

My plan is simple. If the gap up, i will buy the gap with a very small stop. If they reverse i will be out in a heartbeat. If it moves higher and sustains i will hold for a swing trade. If it gaps down, i will wait for a retrace and sell setup." 12-01-17

The Black Swan

"Many of the prediction failures come from hedgehogs who are mentally married to a single big Black Swan event, a big bet that is not likely to play out. The hedgehog is someone focusing on a single, improbable, and consequential event, falling for the narrative fallacy that makes us so blinded by one single outcome that we cannot imagine others." The Black Swan by Nassim Taleb

Trading Info Sites

Stock Money Flow
http://wsj.com/mdc/public/page/2_3022-mflppg-moneyflow.html

ETF Money Flow
http://www.etf.com/etfanalytics/etf-fund-flows-tool

From Fib at TT

"OK Arb...thanks for the response.

I like to try to keep things as simple as possible when it comes to indicators. Although the math behind many analytical tools can be complex, what this or that does in direct relation to price itself is all that matters.

With this in mind, here's how I like to look at the McClellan's:

The information for both of these measures come from the cumulative A/D or U/D lines themselves. So knowing the direction of this same cumulative breadth and volume information is first and foremost in understanding what the Oscillator and Summation Index are providing us analytically at a glance.

With this same information, one then applies a 19 day EMA (10% Trend) as a short term moving average of this same cumulative total, and a 39 day EMA (5% Trend) to measure the intermediate term time frame. This would be the same concept as applying both of these EMA's (or like many do, a 20 day and 50 day EMA) to any or all price pattern sequences to help us in ascertaining direction on two different time scales. Knowing then where the cumulative line is in direct relation to these EMA's then provides clarity on the direction of money flow itself...that is...the fuel that is in the system that can be used to move stock prices either higher or lower.

OK...now that's out of the way...

The McClellan Oscillator measures the SPEED in which these two EMA's are either moving towards or away from each other. So when the Oscillator is at the zero line, this tells us that the net gain (or loss) between the two "trend lines" is balanced (as in there is balance between buyers and sellers) at that one particular point in time. So when the MCO is above the zero line, the bulls are in control, and vice versa when this accelerometer is below the zero line.

The McClellan Summation Index measures the DISTANCE between these same EMA's. So when the Summation Index is at the zero line, the 19 day and 39 day EMA's are literally crossing each other depending on the direction of the Summation Index itself. Going below the zero line then would have the 19 day crossing below the 39 day and vice versa when the MCSUM moves above zero. This would also mean that the zero line shows us that there is intermediate term balance between buyers and sellers.

Now, with these basics out of the way, here's one interpretation of the current numbers:

With the MCSUM as high as it is, it is very difficult for the short and intermediate term EMA's to move further apart as it would be as it would if you stretched a rubber band to the point of breaking. But at the same time, it would be even more difficult for price to just collapse since there is so much liquidity either coming in or remaining in the market that will generally keep prices buoyant. In other words, it will take time for this high amount of imbalance to correct itself, and because of this, prices can continue to move higher in spite of the MCSUM moving either sideways or toward its zero line to correct this same imbalance.

So...based on this...it's highly unlikely to see a blow off, or a parabolic move, because these events can only happen when there is a sharp and dramatic shift in sentiment resulting from a change in money flow balance between buyers and sellers. This would also mean that, more times than not, these type of events will only happen when the MCSUM crosses or is within 250 points of its zero line.

Correction? Possible. However, with the A/D and U/D lines making higher highs, and with the MCSUM as high as it is (the distance between the EMA's is constant), this kind of event will either be a high level consolidation or (as we have seen now for the last several months) quick and hard wash outs before higher highs are seen once again.

Griding up. Probable. In fact, this has been the most likely outcome since August and continues today. Just like in a price pattern, the longer a TREND is moving in one direction, the longer the two measured EMA's will remain constant in this same direction. Under these conditions then, any sell signals given are really HOLD signals (hint for IYB), and based on what happens next, THEN you can make your decision on positioning...slowly, but surely.

The bottom line to all of this is that the trend is your friend, and until money flow moves in the opposite direction, there's no sense in trying to be a hero in picking a top as the percentages show you will fail in this effort. Better to wait until there's enough of an internal breakdown first before allowing your hard earned money to be exposed to a possible top in the making. The market will do this in its own time, its own terms, and it really doesn't care what you think it should do...and when.

I hope I was helpful in this limited amount of time given.

Best
Fib"

http://www.traders-talk.com/mb2/index.php?/topic/112105-giant-move-brewing-which-way/?p=487553

CLAYTRADER / TRADERFEED

https://claytrader.com/lp/Free-Guide-Trading-Tools/guide/

____________________________________________________________________

Describing four (4) market indicators used during the trading day, Brett Steenbarger, Ph.D.

http://traderfeed.blogspot.com/2008/02/nyse-tick-using-sentiment-to-trade.html (click 'traderfeed' for current post.

Tracking Instantaneous Supply and Demand in the Stock Market
http://traderfeed.blogspot.com/2016/12/tracking-instantaneous-supply-and.html

Tracking Multiday Patterns of Supply and Demand in the Stock Market
http://traderfeed.blogspot.com/2016/12/tracking-multiday-patterns-of-supply.html

Using Breadth to Assess Market Strength and Weakness
http://traderfeed.blogspot.com/2016/12/using-breadth-to-assess-market-strength.html

A Unique Measure of Market Strength Utilizing VWAP
http://traderfeed.blogspot.com

Posted by NAV at Fearless Forecasters.


"Since the correction from 12/3, there's not been a sell signal even on 1-min charts. It's hard to short a market that strong and make money. Saying "This is not a top" is as much a prophecy statement as "This is a top". Anything can happen in the market anytime. But as a trader the risk/reward is always in the direction of the trend in one's timeframe.

It's not complicated folks. To short we need to break at least the nearest pivot (SPX 2242) and have a retracement failure. And that requires time on the part of market and patience on the part of trader.

Until then just buy the friggin' dips."

This Fearless Forecast by AChartist

"The update looks like a good chance to crash for two weeks.

Next 9 week high in 8 weeks is much less supported by other cycles as the last election rally was. Say a recovery until this time in Feb, after a two week mini crash, then the next decline looks long to September, with no supporting cycles.

But, I am of the opinion that even bonds are worse because stocks will live another day and debt will not, and the 401k will be long stocks with large hedge in the short fund. And a heavy dose in gold funds. Tomorrow I will build up the short fund from 7.5% to 10%.

If it works this way buying stocks in Sep could be the retirement trade.

My new position is short real estate MEK etf, will add to if bonds up sometime in next two weeks if they get scared out of stocks.

If it works out how I think the gold funds and bitcoin will be capital for stocks in Sep.

I should know if I'm on track if stocks turn down again from a bounce attempt late jan to first of Feb, that is my marker to proceed with this plan as the cycles look.

But I want to say the election bounce was supported by two cycles and going forward is zero support and it could get real ugly all the way until Sep. The ideal pattern would be down hard now, bounce end of Jan with inauguration hope, then a long trend down most of the year. I still think inauguration will be sabotaged too and end of Jan first of Feb bounce may be a late inauguration relief reflex."

Classic fib_1618


Posted Today, 02:49 PM

"All that is being said here doesn't really matter...it's all guessing about the future.

Better to follow money flow in what it's doing now, whether moving in or out and where it's being applied, and let others worry about the why's and wherefores.

The market's functionality, how it goes about pushing prices higher or lower, is the only thing that matters when you look at your statement each month.

Everything else is just a distraction in an effort to take you away from accomplishing this goal.

Our objective then, as traders and investors, is to make money on a consistent basis, and not succumbing to what is being said by others or our emotions."

Fib

www.traders-talk.com/mb2/index.php?/topic/164881-wierd-action-this-week-as-vix-drops-largest-on-record/

http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:money_flow_index_mfi

Gold outlook.

http://mishtalk.com/2016/02/28/golds-message/

Long Term

http://stockcharts.com/articles/decisionpoint/2016/02/stocks-looking-long-term.html

Still in Bear market.

Thanks Ed :)

Hi, long time no type! LOL!!!

Well the industry has so many different faces! Each face has it's own leader!

These are stocks I'm doing well in...LATF, DEWM, ERBB, PHOT, GRNH, MNTR, CBGI

I have about 25 MJ / MMJ related stocks including sub-pennies.

Holding 4,084,123 shares of AEGY which is on tract to merge with SKTO around the 1st week of April. They will have a new ticker symbol and board of directors. I have no idea how many shares of the new company I will receive. Today's after market news showed a joint effort in advertising. Look at recent news for each.

Bye for now.

Hi Ed,

Who do you see as the cannabis industry leader?

Perry

Gold / Silver

CURRENT Mary Jane Potfolio :0)

"Watching for news, a gap up possibly, maybe some profit taking first off at open. Then if the bid is supported, the ask is getting hit hard and big buys are coming in I will begin adding to my position. JMO and good luck to you. I am a conservative trader. Learned that the hard way."

learninfast

Best Stock Market Indicator

The $OEXA200R (the percentage of S&P 100 stocks above their 200 DMA) is a technical indicator available on StockCharts.com used to find the "sweet spot" time period in the market when you have the best chance of making money.



Latest Indicator Position

According to this system, the market is now un-tradable. The OEXA200R is above 65%, currently at 85%, up from 83% last weekend, but all of the three secondary indicators remain negative:

RSI is NEGATIVE (below 50)
Slow STO is NEGATIVE (black line below red)
MACD is NEGATIVE (black line below red)

Background on How I Use This Indicator
The OEXA200R is a valuable metric used to accurately assess the state of the market in order to make profitable trading decisions. That is, whether we are in a bull, a bear or transitioning from one to the other, as well as market volatility and risk within each of those situations. Historically, it has also given traders a clear early warning signal of impending serious market downturns and later safe re-entry points. While not intended as a day trading tool per se it can certainly be used as background information by day or highly speculative traders. Simply put, the OEXA200R gives traders the ability to identify the most opportune conditions within which to execute their various long, short or hold strategies.

Definition of Terms:

"Tradable" refers to the point at which it is most advantageous to enter and continue long trading.

"Un-tradable" refers to the point at which it is advisable to exit all long positions that have not already automatically closed with a trailing stop loss. Please be aware that the OEXA exit points are not always timed at the exact top of any run up, that is impossible to predict. However, a trailing stop will follow the price to the highest point and close out as it falls from there, meaning most positions should have closed before the OEXA exit signal appears and thus should close at a point higher than at the exit signal.

Following a major market correction, the conditions for safe re-entry are when:

a) Daily $OEXA200R rises above 65% (I follow the Daily but do not publish the chart here).
And two of the following three also occur:
b) Weekly RSI rises over 50
c) Weekly MACD black line rises above red line
d) Weekly Slow STO black line rises above red line
Without the solid foundational support of two out of three Weekly secondary indicators it is unsafe to trade even if Daily OEXA200R edges above the 65% line. The market is considered safely tradable as long as Daily OEXA200R remains above 65% and two Weekly secondary indicators remain positive. Volatility and risk for long traders are relatively low. The trend is on their side.

Conversely, when Daily OEXA200R drops to 65% and / or two out of three Weekly secondary indicators turn negative it, is taken as the conservative signal to exit all long positions, even if the previous Weekly OEXA is above 65%. Volatility and risk increase substantially. In the past, this has often been a "tipping point" condition presaging a substantial market drop.


(c) John F. Carlucci

CURRENT Mary Jane Portfolio :0)