Entries by Dan Sheridan

Dan’s New Class Just Started

October 3, 2013 in , , /by

Dan’s newest class “How to Manage a $30,000 Portfolio” kicked off yesterday with a 2-hour session by Dan. Dan covered the three strategies to be familiar with: 1. Monthly Calendar 2. Directional Butterfly 3. Iron Condor For each strategy, Dan outlined what vehicles to use, trading plans, adjustments and more. We started using a new template to track class trades that summarizes the information about the trade.  Here’s an example: This new format tracks collects the trade information for you in one place.    As Dan makes updates to the trades, they will be immediately available on the class web page and emailed to you so you have them as soon as possible! The class just started so there’s still time to join by clicking here.

Using Volatility to Time Trade Entry

September 30, 2013 in , /by

For the positive theta trader, implied volatility levels are one of the key elements to consider and watch before and after trade entry. The profitability of positive theta trades, meaning those where the passage of time and option value time decay are beneficial, is affected by time, price movement and implied volatility of the options that are part of the position. Timing trade entry to day-to-day movements in implied volatility as well as overall market volatility can enhance trade profitability. The primary way to watch volatility of the broader market is the VIX. The VIX reflects the implied volatility of the SPX (S & P 500). Since most of the market is highly correlated to the SPX, the VIX is a useful tool to get an overall market volatility weather report. Considering VIX levels and as well as the implied volatility of the underlying you are trading is key. Now that we have talked about what implied volatility to monitor, the question is what to do with the information and what does it mean? A trader should look to enter positive Theta, long Vega (volatility) strategies at a time when the IV of the underlying is over all in mid […]