It is often difficult to know which price to set when placing an order for illiquid ASX options. This can sometimes lead to paying too much when buying or receiving too little when selling. This is how I place my ASX ETO (exchange traded option) orders to get the best prices.
It is surprising how widely the option strategy of writing naked puts is advocated. That option strategy is also referred to as writing uncovered puts, or writing cash secured puts, or selling naked puts. If you want to learn how to trade options you need to be aware that some strategies are not so good.
Question: “What will be the effects of the Dubai World crisis on the market?” I treat financial news delivered with such emotional over-reaction with suspicion. The media often elaborates news out of proportion. The Situation: The Dubai government controlled “Dubai World” can’t repay interest on at least US$60B of debt, possibly more than US$80B.
When you trade stock options you need to forecast where market prices might go. We use technical and fundamental analyses to make our forecasts. It is important to understand how the global financial crisis will affect future sentiment.
Global markets became extremely volatile last year. Stock, commodity and foreign exchange prices started to fluctuate wildly. The S&P500 index ranged from 800 up to over 1500 and then down below 700. The VIX volatility index, also known as the fear index, reached a sharp peak, shown below. How will [...]
The purpose of this article is to try to understand the oil price. It is not possible to make a price forecast here, but if we can understand the factors which influence the oil price we’ll be in a better position to make investment decisions about energy stocks.
It has been very difficult to understand how [...]
Nation after nation in the west is slipping into recession. This raises the obvious question for investors: which market sectors should be invested in or avoided?
All times of change provide opportunities for the nimble. Recessions are part of the normal economic cycle. Recessions serve a purpose. They are necessary because they remove inefficient practice, and [...]
I’ve been asked frequently lately: what’s going on with this financial crisis, and why does this happen? So today, I thought I’d talk about tulips.
Tulip Mania 1634 – 1638
In the 16th century Holland’s maritime reach and interests were expanding around the globe. They were exploring and discovering far and wide. In 1593 Conrad Guestner imported [...]
I’ve been asked a number of times: “What is short selling?”, so I’m going to answer that here.
Imagine my colleague Paul is fortunate enough to be in possession of 10 large boxes of beer, freely available from our local liquor store. Imagine also that I enjoy parties, and in an impulsive fit of haste I [...]
Events in the US financial sector are unfurling dramatically. Or should I say unraveling? And it appears that there is more to unfurl. To understand the US financial sector at the moment we need to understand the chain of money, finance, debt, risk and trust which interlinks homebuyers, retail lenders, investment banks, financial insurers, speculators, [...]
