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Guy Cohen

Support & Resistance with Straddles

by Guy Cohen 21. April 2008 18:18
Hi everyone. I recently received this email which I thought was worth sharing. "Hi Guy, I have another question. I had a trade on GE the other day (58% profit in one day straddle and strangle). I bought GE because of all the usual suspects (cheap, volatile, tiny bid/ask) but the thing that convinced me was the fact that the breakevens fell well within the high low range of recent months. With most of the options I've looked at, even when they're cheap, they require a break through of quite long term support or resistance. So this has become one of my vetting strategies… ie checking if the breakevens fall within the high/low range of recent months. The question is… is this a good idea i.e. does it increase the probability of a profit, or did i just get lucky with GE? …and will I be missing out on too many other trades because I'm being anal about breakevens relative to range?" [More]
Guy Cohen

Recent bull flags

by Guy Cohen 14. April 2008 18:20
Hi everyone. There have been quite a few decent flags out there recently … here are a few that TradeFinder has spotted for us. Notice that NONE of these bull flags was occurring in a downtrend.
Hi everyone. There have been quite a few decent flags out there recently … here are a few that TradeFinder has spotted for us. Notice that NONE of these bull flags was occurring in a downtrend. [More]
Guy Cohen

More about flags and prognosis for 2008

by Guy Cohen 8. March 2008 18:15
Hi everyone. First, thank you for your emails with your success stories! I love hearing about your great trades and overwhelmingly this has been the case. Of course with trading there are also challenges too, and I want to respond to an email I've just received, highlighting a challenge or two.
Hi everyone. First, thank you for your emails with your success stories! I love hearing about your great trades and overwhelmingly this has been the case. Of course with trading there are also challenges too, and I want to respond to an email I've just received, highlighting a challenge or two. [More]
Guy Cohen

Trade Flag Patterns with Illuminati-Trader

by Guy Cohen 19. November 2007 18:08
Did you know you can use Illuminati Trader not just to trade straddles and strangles around earnings season, but also to trade stocks up or down at any time of the year! This means you can use the site to trade stocks with your broker and, for UK traders, even trade through your spread betting account! This is part of the incredible value of Illuminati Trader and it’s so easy to do using TradeFinder. Let me show you how. [More]
Guy Cohen

Time Decay with Options

by Guy Cohen 18. November 2007 18:05
Theta T The characteristic of option prices to change purely as a result of the passage of time is known as time decay. Theta is a measure of how time decay affects the option premium. As such, theta is nearly always negative for bought options (although it can be positive for deep in the money puts in certain circumstances). This makes sense because time decay erodes the option value as time to expiration diminishes. [More]