Author: The INO.com Team

IV Rank - Key To Successful Long-Term Options Trading

Posted on by The INO.com Team

After posting my recent options article “High-Probability Options Trading Thrives” where I demonstrated an 87% options win rate throughout the bear and bull markets in Q4 2018 and Q1 of 2019, respectively, I received a lot of questions. I previously walked through how powerful options are and how you can be wrong about the direction of the stock and still make money. This is because options are a bet on where stocks won’t go, not where they will go. When coupled with IV Rank, options provide a high-probability win rate while generating income, mitigating risk and circumventing drastic market moves. Many questions that arose were centered on implied volatility rank (IVR) and how this can be leveraged appropriately when engaging in options trading. IVR is by far the most important and most essential concept to understand when it comes to long-term success in options trading. Here, I’ll discuss how implied volatility and IVR can impact options pricing and provide options traders with a statistical edge over the long term.

Purpose and Implied Volatility (IV)

The whole idea behind options trading is to sell options and collect premium income in a consistent and high-probability manner. Enabling your portfolio to appreciation steadily month after month without guessing which direction the market will move. The main key for options trading success is leveraging implied volatility and time premium decay to your advantage. Since options premium pricing is largely determined by implied volatility, it’s this implied volatility component when used appropriately that provides options traders with a statistical edge over the long term.

Implied volatility is the market’s prediction of how volatile the stock will be in the future or the expected volatility of a stock. Implied volatility has many implications and relationships that should be grasped. Continue reading "IV Rank - Key To Successful Long-Term Options Trading" →

NASDAQ Hits Record High As China Steadies

Posted on by The INO.com Team

Hello traders everywhere. The NASDAQ hit a record high of $8,052.40 in early trading as market sentiment was lifted by stronger-than-expected corporate earnings and solid economic data out of China. China's economy grew at a steady 6.4% pace in the first quarter, defying expectations for a further slowdown, adding to optimism that the economy may be starting to stabilize even as Beijing and Washington appear moving closer to a trade deal.

NASDAQ Hits Record High

On this side of the trade conversation, The U.S. trade deficit fell to an eight-month low in February as imports from China plunged, suggesting President Donald Trump's "America First" agenda was starting to bear fruit. Continue reading "NASDAQ Hits Record High As China Steadies" →

Weekly Futures Recap With Mike Seery

Posted on by The INO.com Team

We've asked Michael Seery of SEERYFUTURES.COM to give our INO readers a weekly recap of the Futures market. He has been Senior Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.

Michael frequently appears on multiple business networks including Bloomberg news, Fox Business, CNBC Worldwide, CNN Business, and Bloomberg TV. He is also a guest on First Business, which is a national and internationally syndicated business show.

Gold Futures

Gold futures in the June contract is currently trading at 1,295 an ounce unchanged for the trading week as the trend remains sideways. If you are long a futures contract, I would place the stop loss under major support which now stands at 1,284 as an exit strategy as I still have a bullish bias towards gold, but the risk/reward is not in your favor to take a position at this time. Gold prices are trading slightly under their 20 and 100-day moving average as the trend is lower to mixed as prices have gone nowhere over the last three months. Volatility remains average as prices topped out last month slightly above the 1,350 level as I still think longer-term gold prices look attractive. However, all the interest remains in the U.S. equity market which is hovering right near all-time highs once again. For the bullish momentum to continue prices have to break the March 25th high of 1,330 in my opinion so be patient and let's see what next week's trade brings as I do believe bullish trends across the board will start to develop soon.
TREND: MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE
Continue reading "Weekly Futures Recap With Mike Seery" →

Big Banks Boost Stock Market

Posted on by The INO.com Team

Hello traders everywhere. Earnings season started with a bang early Friday as two major U.S. banks shared better than expected Q1 results which propelled the market higher at the open. The S&P 500 pushed above $2,900 for the first time since October of 2018, the DOW up over 290 pts in early trading and is trying to post a weekly gain after being quiet for much of the week and the NASDAQ continues to march higher gaining +.47% on the week making this three straight weeks of gains.

JPMorgan Chase earned $2.65 a share in the first quarter, easily beating third-party consensus estimates of $2.35. Revenue—which many analysts had expected to decline—rose 5% to $29.9 billion as the company appeared to benefit from higher interest rates and strength in consumer banking. Shares rose more than 2.5% in pre-market trading.

Wells Fargo was the other big bank reporting early Friday, and its results also topped third-party consensus. Earnings per share of $1.20 beat the average estimate of $1.10, while revenue of $21.6 billion out-performed the average estimate of $20.99 billion. Shares climbed about 2% right after the company released results.

post a weekly gain

The U.S. dollar retreated as the week ended with investors dumping haven assets turning to riskier assets like stocks after a strong round of earnings releases. The dollar will post a weekly loss of -.48% Continue reading "Big Banks Boost Stock Market" →

Gold And Silver Still On The Road To A Low Risk Setup

Posted on by The INO.com Team

From a post on gold and silver on Tuesday…

Very simply, if it’s an H&S it’s a minor one with a target to the SMA 200 or short-term lateral support. Gold has curled back up to test the underside of its SMA 50. A takeout of 1310 and then the March high could put yeller back in business. Otherwise, don’t personalize it. A test of the SMA 200 would be normal.

The H&S was not my thing. I tend not to get overly excited about short-term patterns and surely do not announce them far and wide to stir people up. It was a product of the gold community, some members of which have been flipping in head-spinning fashion between bullish and bearish views. I note it again because I don’t want that stink on me. The upside and downside parameters above were my stuff.

Per the NFTRH Trade Log, I shorted a chunk of GLD yesterday (while remaining long gold stocks and even more so, cyclical assets on balance) as gold poked the SMA 50 per the Futures chart below. Gold’s pullback today was not engineered by the Fed or da Boyz or da PPT, PtB, Trump, Mnuchin or some nefarious super algo. It’s normal. Okay, conspiracy mongers? N.O.R.M.A.L.

Click the chart for a clearer view of gold’s situation at the SMA 50. If it does not clear the March high the SMA 200 (at least) continues to yawn with its gaping maw. 1240 is also doable.

gold

Silver looks particularly lame, but ironically this is the metal I am expecting to bottom first with the question being the two noted (green) support areas. Don’t rule out 14.50. Continue reading "Gold And Silver Still On The Road To A Low Risk Setup" →