Education

How I Define Pinning for Tracking Purposes

As some of you know I have begun tracking when SPY pins on Wednesday and Friday. I began tracking Wednesdays since its inception and Fridays a bit after that. This next part is important – I am not defining pinning as the perfect pin. I am defining it in my own way that gives a range […]

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How Monday’s Drop & Open Interest Set-up a Long Trade

Over the weekend I posted that there was a good probability of the market going lower before finding a bottom. I’m still not sure if we hit a cycle bottom, but based on the quarterly index open interest and 20-day lows, the risk/reward for a bounce was too good to pass up. As a reminder here […]

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Important Lessons From Last Week – Delta Hedging & Options

Last week was a good example of what can happen when price begins to fall through heavy put strikes and something that short term traders should be aware of even if they don’t trade options. Last week here, I posted the open interest for the start of the week which had a more bullish look […]

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Identifying Market Trends in its Simplest Form

At the heart of technical analysis is the so-called “trend.” You can simplify the market trend into three categories: up, down, and sideways. They can further be categorized by time: primary – months or years secondary/intermediate – weeks or months short-term – days intraday – minutes or hours The trend length of interest is determined […]

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No Such Thing As MaxPain Huh? Fine, Let’s Call It SassyPain

I’ve seen some stuff floating around twitter lately that maxpain doesn’t work. Well, I would agree if you use traditional maxpain, which uses dollar value as opposed to open interest and volume. You can read more about that here. After a couple years of tracking open interest on high beta stocks and watching stocks pin […]

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A Note on Pinning & Open Interest + OI updates – March 5th

Pinning can be a great tool to see where your stock may end up at the end of the week. Even though I give you the open interest at the start of each week and often mid-week, it’s still best used at the end of the week. However, there are many caveats to the workings […]

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Risk Management and Your Emotions

Well last week wasn’t very fun. Despite my joking around on twitter Friday, I was not having a good day. I got stopped out of some positions and most of the ones I was able to hold onto lost value. Overall a crap day for my account; but hey it’s part of the game right? […]

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What Happens to Your Ego When the Market Says You Are Wrong

  Last weekend I wrote this about the overall market: My bias is leaning toward a breakdown before a breakout. Having said that, if we do get a correction, I think it will be very minor consisting of about 2-3% or roughly between 1785 and the low 1800′s. From Friday’s close to the low on […]

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What is MaxPain or Options Pinning?

Investopedia defines maxpain as: the point at which options expire worthless. The term, max pain, stems from the Maximum Pain theory, which states that most traders who buy and hold options contracts until expiration will lose money. According to the theory, this is due to the tendency for the price of a underlying stock to […]

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How One Strike Can Act as a Magnet During Option Expiration – TWTR

On Thursday evening of last week (December 19th), I posted this regarding SPY’s open interest along with the graph below: This conversation followed: SPY closed Friday at 181.56. I thought this would be a good time to try to explain when a large strike could become a magnet for a stock or ETF.  I’m going […]

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This will end badly, but in the meantime enjoy the ride

Did Bernanke make a mistake by not tapering? I don’t know and frankly it’s not my job to try to figure it out. My job is to trade what is in front of me and I think I am going to get to experience a mini dot com bubble. Perhaps it won’t be as epic, […]

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Is Dow Theory the New MySpace?

Despite the title, this post is not going to be a complete bash of the Dow Theory, but it did come up recently due to the controversial call made by Ralph Acampora, which can be found here. What I will be discussing is different ways to gauge the market, a little about Dow Theory, and […]

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How Options May Have Contributed to Thursday’s Sell-Off

The sell-off that commenced on Thursday (8/15/13) seemed to take people by surprise, including myself. It wasn’t necessarily that we had a down day that was surprising, but that we so easily broke SPX 1675 support to end the day at 1661 or 166.38 on SPY. Furthermore, any attempt at a bounce during the session […]

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How $SPY Options Prepared Me For a Pullback Last Week and What’s Up For Next Week.

I have received a couple of questions regarding my tweets last week since it was the first time in a while I had directed caution based on what I was seeing in the SPY options market. I decided to write about it for anyone that wants to know my thought process going into last week. […]

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Can the Options Market Help Guide You During Earnings Season?

I personally like to look at the options market (particularly open interest) to help me find ranges for pinning on expiration days.  Just like technical analysis nothing is guaranteed, but I find it to be useful as a tool to use in conjunction with other tools (especially for trading options through different strategies). I also […]

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Where Do People Think These Stocks & ETF’s Are Going in 2013 (in terms of open interest)

Here is a look at the January 2014 open interest of some of our high flyers along with a few of 2012’s best performing sectors. Take a look at where people think these stocks/ETF’s are going over the next year. AAPL Highest call: 600         Total calls: 370,104 Highest put: 500          Total puts: 176,249 […]

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Hey Institutians, Thanks for the Free Money – Options

I’m like you, I want to score big with some long or short naked option buys. It’s a great feeling when I buy calls or puts and I get in just at the right time and get out before the trend moves against me. That kind of trade requires a great deal of attention to […]

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The Psychology of Why I Went Short on Election Day

As a former psychologist, market sentiment (a lot of which I can sense through twitter) is one of the things that I consider when making trades. Recently those of us that trade the charts haven’t had strong conviction as to whether to be long or short. Many of us have stayed in cash or made […]

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If Only Pinning on Apple Maps Worked as Well as Option Pinning

I’m going to save us both time by not rehashing the excitement, or lack of, today’s highly anticipated earnings releases. The real excitement came earlier this week with GOOG’s bombshell. Although today was an anomaly in that both AAPL and AMZN didn’t provide huge movements in the stock once it settled down after hours, what […]

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Open Interest as a Map for Weekly Trading

Last week I wrote here about taking Thursday’s open interest and using it to help you find a range to trade Fridays stock action. The point was to see how well pinning worked using open interest. This week I decided to start a little earlier and begin looking at the range in OI after Monday. […]

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Where The Pin Drops – Open Interest & Weekly Expiration

Where the Drops Open Interest & Weekly Expiration The increase in weekly options has caught the attention of many investors as a potentially quick way to make money without the larger premiums coupled with monthly options. Many people are already familiar with and use maxpainas a way to gauge what the price of a stock may […]

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