The Option Alpha Podcast

Show Notes: http://optionalpha.com/show175

Stock trading is easy to understand conceptually because it's one-dimensional. Either the stock goes up or it goes down. Clear and simple, at least from a trading and profit or loss perspective. Options trading, however, is multi-dimensional. Price, time, and volatility all impact the value and price of an options contract. On today's show we're selectively choosing to highlight the impact that volatility has on options because, as we've seen in the 2020 market collapse, if you're not managing volatility, it could become your worst nightmare.

Show notes: http://optionalpha.com/show174

Earnings season comes around four times a year for stocks, and as traders, we've always loved the idea of trading these events for the crush in implied volatility and quick potential moves in option strategy positions. However, after analyzing 1,546 earnings events across 40 underlyings over 10 years we decided to stop trading earnings events completely. In today's podcast, I'm going to walk through the research on earnings moves, and how different options strategies performed under various setups and conditions.

Show notes: http://optionalpha.com/show173

We're excited and honored to have a very special guest this week on the podcast, Richard Hudson, co-founder of the London and Brussels-based Science Business Publishing Ltd. He's the co-author of The (mis)Behavior of Markets: A fractal view of risk, ruin & reward which he wrote with famed Yale/IBM mathematician Mandelbrot. Our discussion frankly should be required listening for any investor and was recorded in January of 2020 immediately preceding the market crash that occurred just weeks later.

Show Notes: http://optionalpha.com/show172

This week on the podcast we're doing something a little different and turning this podcast episode into a full-blown audiobook. Today I'm recording the newest book we released entitled "Mastering Covered Calls". I encourage you to pick up your copy now, did we mention it's 100% free, and follow along as you listen to this audiobook. We've included dozens of charts, tables, and graphs to help as part of this new book and we hope you enjoy listening or reading your copy.

Show notes: http://optionalpha.com/show171

Today on the show we welcome special guest, Rob, who's the co-author on our recent research report on Covered Calls. On the show this week we go over the top three performance insights we learned from our massive study on Covered Call Performance. If you trade covered calls right now or plan on using them at any point when dealing with assigned stock, then this show should be required listening.

Show notes: http://optionalpha.com/show170

Factor-based strategies and trading systems are all the rage these days. We've been promoting these for many years now but it seems that more and more investors are catching on. As a result, we wanted to cover the 5 critical factors that your trading strategy should have. To us, these serve as the foundational elements for choosing which investing vehicles, indicators, or systems most appropriately fit your portfolio.

Show notes: http://optionalpha.com/show169

This week we're very excited to share our exclusive interview with Kevin Davitt, a special guest with tons of experience not only as a former market maker, but as the Senior Instructor for The Options Institute at CBOE. As many long time listener's know, we are highly selective with people we choose to bring on as guests for interview and Kevin raises the bar yet again for us with an amazing discussion. During the show we'll touch on everything from his time as a market maker, transitioning to the retail side of trading, though processes on managing positions and controlling risk, and so much more. You're going to love this candid and wide-ranging discussion as much as we enjoyed the time with Kevin.

Show notes: https://optionalpha.com/show168

Did you know that fear has nothing to do with logical or cognitive reasoning? It's actually a completely physical response that originates in our body. We fear to be wrong because that might mean we will be alone and people will leave us, which means that we won't be part of a tribe or community, which means it'll be dangerous and we might die. Okay, that's extreme but taken to its logical conclusion we fear because of conditioning we've had as humans for thousands of years to survive on a physical level.

As options traders, we have fears about trading that manifest in dozens and dozens of ways. Today, as we circle the Halloween season, I wanted to tackle the 27 biggest options trading fears that we hear in our community. And, more importantly, how to overcome and conquer these fears. Just saying them out loud and talking through them together might just be what you need to set yourself free and on the right path as a trader. 

Show notes: http://optionalpha.com/show167

Oh, profit targets. The double edge sword of confusion for many traders. Take profits too early and you feel like you left money on the table. Too late and you kick yourself because the trade could have moved against you. And because we've been getting so many questions on when and why we've let positions go beyond traditional profit targets, we wanted to record today's show to talk about the top 3 market setups that would lead us to break profit-taking rules. Yes, you heard me right, and longtime members have known this for years, but we don't always take profits at 25% and 50%. Shocking? Shouldn't be because our Profit Matrix research 2 years ago laid the foundation for holding positions generally longer towards expiration.

Show notes: https://optionalpha.com/show166

When it comes to market signals and timing indicators, the Put Call Ratio is one that naturally jumps to the top of many lists. Because the indicator looks at volume in both put and call options, the logical conclusion is that we can interpret the ratio to signal us from an impending top or possible market bottom. But, is that really the case, and if so, how should we use Put Call Ratios moving forward in our analysis. All this and more on this week's podcast episode.