As usual, I like to share good stuff, which I think can be useful for my readers here. Check out this trading tips video!I like this video, as it shares many practical trading tips in the real example, such as:* The use of Fibonacci Retracement* Identifying support and resistance* Where to place the stop loss* Estimating price target* What you can infer when the certain stock/market shows “abnormal” behavior as compared to the overall market sentiments.* etc.I think I’d deem myself “selfish” if I don’t share this video with you, because I can learn...
Saturday, February 28, 2009
Saturday, February 21, 2009
Option’s TIME VALUE – Putting It Together – Part 2: Main Factors – Degree of Options Moneyness
Go back to Part 1: Understanding What Time Value is.MAIN FACTORS THAT AFFECT OPTION'S TIME VALUEAs discussed in the previous post, Time Value of an option will be mainly affected by:1) Degree of Options Moneyness2) Implied Volatility (IV)3) Time Remaining to ExpirationLet’s see how all these factors affecting Time Value can be explained by “the level of uncertainty as to whether or not an option can finish ITM”.1) Degree of Options MoneynessAs discussed...
Sunday, February 15, 2009
Market-If-Touched (MIT) Order
Market-If-Touched (MIT) is an order to buy / sell a security when the market reaches / touches a predetermined price level (i.e. Trigger Price) that is lower than current price for buy order, or higher than current price for sell order.This order is held in the system until the Trigger Price is touched. Once Trigger Price is touched, the order will be submitted as a Market Order to buy / sell at the best available market price.The same advantage & disadvantage of Market Order apply to MIT Order as well.There are 2 types of MIT Order:a) Buy...
Saturday, February 7, 2009
Option’s TIME VALUE – Putting It Together – Part 1: Understanding What It Is
As mentioned in “Option Price Components”, option price or premium consists of:For ITM Option:Option Price = Intrinsic Value + Time ValueFor ATM and OTM Options:Option Price = Time ValueWhereas:Intrinsic Value of ITM CALL Option:Intrinsic Value = Current Stock Price – Strike Price.Intrinsic Value of ITM PUT Option:Intrinsic Value = Strike Price – Current Stock Price.As can be seen in the above formula, it is only ITM options that have Intrinsic Value component, whose value is simply the difference between option’s strike price and current stock...
Thursday, February 5, 2009
Major BEARISH Candlestick Patterns – Summary
Similar to the previous post on Major Bullish Candlestick Patterns, the following pictures could also help you to differentiate between one pattern with another more easily.For example:Notice the difference between Evening Star, Evening Doji Star & Abandoned Baby Bearish (See pictures no 7, 8 and 9 below).Click the following links to read about each Bearish Candlestick pattern in detail:1) Bearish Engulfing2) Dark Cloud Cover3) Harami Bearish4)...
