Sunday , 18 April 2021

Tag Archives: options

Black-Scholes "Volatility Smile" Suggests S&P 500 Could End 2012 15% Higher – Here's Why

According to all sorts of financial media, the end of the fiscal world as we know it is about to occur. All rational individuals surely would come to the same conclusion, right? Wrong! For the past 3 years, the "world has been ending" according to nearly every publication. The market however, simply does not agree with this prognosis. Throughout the past 3 years, despite the negative headlines, the markets have rallied over 50% in wave after wave of briefly interrupted momentum. Given this continuous counter-intuitive bullish onslaught, and according to the volatility smile and the current positioning of money in the options market, I believe it is entirely possible for the S&P 500 to end the year...up 15% from its current price. [Let me explain.] Words: 829

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Black-Scholes “Volatility Smile” Suggests S&P 500 Could End 2012 15% Higher – Here’s Why

According to all sorts of financial media, the end of the fiscal world as we know it is about to occur. All rational individuals surely would come to the same conclusion, right? Wrong! For the past 3 years, the "world has been ending" according to nearly every publication. The market however, simply does not agree with this prognosis. Throughout the past 3 years, despite the negative headlines, the markets have rallied over 50% in wave after wave of briefly interrupted momentum. Given this continuous counter-intuitive bullish onslaught, and according to the volatility smile and the current positioning of money in the options market, I believe it is entirely possible for the S&P 500 to end the year...up 15% from its current price. [Let me explain.] Words: 829

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Options Are a Gold Bull’s Better Play Than Owning High Beta Miners – Here’s Why (2K Views)

Whilst it is true, more often than not, that mining stocks move in the same direction as gold [and historically outperform that of the physical metal based on their better beta statistics] there are periods where this relationship does not hold. That is one of the reasons we currently have no interest in trading or investing in mining stocks. Why form a bullish view on gold and buy mining stocks based on this view, only to see gold rise and mining stocks fall? [Instead,]... our preferred strategy to optimize and maximize potential profits... is using options that are directed based on the price of gold with no other factors influencing their performance. [Let us explain why.] Words: 1235

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How to "Play" a Parabolic Move in Silver (+2K Views)

In order to successfully identify bubbles and profit from them, one needs to know the tipping point at which a bubble [in this case a silver bubble] is unsustainable and begins to breakdown...This article focuses on just one of a myriad of factors that determine when a bubble may pop - momentum - and addresses what trading strategies may be suited to the situation. [Let me go on.] Words: 1475

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GDXJ Junior Gold Miner ETF: The Devil is in the Details

I had previously expressed personal interest in buying into this fund – as a relatively “safe” and diversified investment (within this sector). However, should the fund managers choose to invest heavily into derivative investments, the actual holdings of mining equities could be limited, and thus not offer an amount of diversification to justify experienced investors into putting money in this fund – and certainly the “safety” I had hoped for is also not present. Words: 868

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