The word “rules” is a bit harsh, but “guidelines” is too soft. Maximum premium is around ATM Buy-writes held to expiration have delta of 0 above the strike, -1 below the strike Don’t mess around too much with bid/ask spreads Don’t use credit / debit orders for covered call transactions unless it is a very slow moving market or if the spreads are unreasonable. Otherwise …
Well: High fees Lack of transparency (what are they holding) Trading rules (how long you have to hold them before they don’t extract a penalty) Only bought or sold at the end of the day A track record no better, and usually worse than indexes over time Sometimes ugly tax consequences (e.g., having the value drop considerably over time and getting stuck with a capital …
Exchange Trade Note TVIX and its Exchange Traded Fund cousin UVXY are 2X leveraged funds that track short term volatility. To have a good understanding of TVIX (full name: VelocityShares Daily 2x VIX Short-Term ETN you need to know how it trades, how its value is established, what it tracks, and how VelocityShares makes money on it. How does TVIX trade? For the most part TVIX …
The live action is over on the blog tab, but you might be interested in some of the most popular posts I’ve written over the last four years. Trading in an IRA and Avoiding “Free Riding” Taming Inverse Volatility WIth a Simple Ratio Top 15 Questions about Trading in an IRA Top 10 Questions about Dividends Ex-Dividend and Pay Dates for Lots of ETFs Dividend Capture Strategies …
Published 1-November-2009 The current SPY trend line obviously can’t continue indefinitely. Although I don’t think charts predict the future, they do show previous psychology, so I took a look back at 12 years of data. A couple of interesting things stood out to me. In that time span there have been three fast recoveries after significant corrections. The one in Sept 98 …
