Gambler’s Fallacy
| Why Smart People Go Broke | You’ve just thrown 20 heads in a row; what are the chances of the next toss being a head? Of course, we all know the answer – at least, in our logical brain. The coin has no memory, no motive, and no awareness of what came before. The […]
Paying To Lose
Zero Commission Fraud. Zero commissions seemed like a dream when I started trading many years ago. I cut my teeth on the ASX (Australia) but quickly realized that it was a loser’s game. The brokerage on an options trade was $45. So, buying and selling meant $90. Buying and selling a spread was $90 on […]
Closing Only
When Your Broker Becomes The Risk There have been reports from some traders that TastyTrade has set SPYG to closing only – in other words, you can sell any positions you have, but you can’t open any new ones. Their explanation: low priced, illiquid symbols used for fraud. Breathe. This looks alarming – but it […]
Nuts & Bolts
Choosing Options. Three golden crosses – these bulls are pretty excited. An 11% rise in 13 trading days (open 31 Mar: $639; close 17 Apr: $710). That’s a fast bull run if ever I saw one. As I said last week, it makes me twitchy. Not “regression to the mean” – that’s a statistical concept, […]
What a week . .
What a week to publish a book! Could there be worse timing? The SPY golden cross has been confirmed, and that is our IN signal. Yes, we will be buying in at a higher price than we sold. Not ideal – the ITM OUT signal gets us out early if things deteriorate. But not all […]
Not So Fast!
Golden Cross? Yes a golden cross has formed – but is not yet confirmed. The white space between the SMAs is only 0.6% (see chart). I am extremely twitchy about this rally – SPY has even made a new high! Crazy. But the last four days, while the market was going up sharply, the volume […]