Leverage & Strikes
Leverage & Strikes Why choose a 60% strike rather than a 50% strike? Why not 70%? Or 80%? When should we roll up? I thought that I would go back to basics this week and go over choosing options and the leverage that gives us. Leverage I know that our ITM signal came last November […]
Bull Runs
Bull Runs & Bear Markets. I used the term ‘bull run’ last week which may have caused confusion, as a bull run is not the same beast as a bull market. Let me explain. Bear Markets Let’s start with bear markets. The start of a bear market is when it has fallen 20% from recent […]
Joining the Bull Run
Too late to join the bull run? The bull run for SPY is now almost a year old. Before this bull, we had a mini-bull run from April – July 2023 at the end of the Biden bear market, but that came to a very sticky end between August and October 2023. Right back down […]
ITM on Stocks
ITM on Stocks? I have often been asked whether you can use the ITM strategy on stocks. The answer is, of course, absolutely. There is not reason not to. There is just one big problem: we don’t know what the results will be. Let me explain. ITM on Stocks? The ITM Strategy has 3 parts: […]
Endowment Effect
The Endowment Effect. The endowment effect is a psychological tendency for people to place more value on something we already own, even if it isn’t actually worth more than something we don’t have. It is often attributed to loss aversion where the pain of losing something is felt more strongly than the pleasure of gaining […]
Don’t Fight the Fed!
Don’t fight the Fed! This week was dominated by the 50 basis points cut in interest rates – something that had a very low probability just a few weeks ago. The saying ‘Don’t fight the Fed’ was attributed to Martin Zweig, and means that betting against the Fed’s policies, especially when it is moving interest […]
