Investment Strategies

Last decade saw an implosion of volatility-related products, Among the myriad Wall Street legacies of the soon-ending 2010s has been the emergence of market volatility – or the magnitude of security price swings over short time spans – as an asset class unto itself. It is all the more notable against the backdrop of the…

CBOE recently reported that the market volatility is at its low again, All kidding aside, with about three weeks remaining, it’s been a fairly wonderful year for the S&P 500®. The large cap index is higher by about 25%. If the year ended today (12/6), this would be the best annual performance for the S&P…

Volatility is a measure of the rate and magnitude of the change in the stock’s value (up or down) of the underlying which is stated as a percentage over one-year. A higher volatility means there is more than average price changed during a trading day and a lower volatility means there is less than average…

Reuters describes the lessons from Charles Schwab, “1. While you’re young, get out there and work every job you can. 2. Take the risk – even if you are not totally ready. When trading commissions were first deregulated decades ago, no one – including Schwab himself – truly knew how a low-cost brokerage strategy was…

Value walk thinks that it’s now a good time to invest in gold “Global trade tensions between the USA and China, the uncertainties around Brexit in Europe, increasing tensions between Iran and Saudi Arabia, and a return to monetary easing by central banks may very well mean that now is the time to begin accumulating…

Marketwatch outlined an option volatility trading strategy developed by a former market maker, “The Black-Scholes model used in options pricing exhibits a log normal distribution, a consequence of the fact that prices cannot go below zero. This distribution presently exhibits a fat tail to the downside, Harwood said. “That’s kind of how selling options works; you’re going…

Forbes warned that we should look beyond the volatility index, Many investors make the mistake of not looking beyond the CBOE Volatility Index, known as the VIX, in their assessment of volatility and by extension, market risk. But the VIX is just a gauge of equity risk. Any market with traded options has its own…

BI recently argued that the recession risk is over, Campbell Harvey, the Duke professor who pioneered the inverted yield curve’s use as a recession signal, says his beloved model will break one day. That hasn’t happened yet. A negative spread between three-month and 10-year Treasury yields — also known as a yield curve inversion —…

Marketwatch analyzed the recent corporate earnings, Kramer points out that the earnings multiple of the S&P 500 SPX, +0.41% on a trailing 12-month basis recently touched 19.7, the lowest level since June 2016 — a time when “the world literally felt as if it was on the verge of a meltdown”. (That multiple is a…

Barrons discussed index options trading, “Zem Sternberg, one of the options market’s most respected traders, is using the low-volatility investing craze to power a strategy designed to produce returns that match the stock market’s upside while outperforming when the market swoons. He does this by actively trading index options and futures to hedge portfolios. The…