The correlation of the $RUT to the $SPX and $DIA has recently taken a nosedive. Correlation is a way to see how synchronized two markets are moving. In the chart below, you can see that the correlation indicator on $RUT vs. $DIA has moved to slightly below 0.00; signaling a low correlation. A zero correlation represents randomness. A correlation closer … Read More
Broken Wing Butterfly Trade Example on LNKD
For decades, expert options traders have been relying on a variation of the ever popular butterfly trade to enhance their monthly income and allow them to safely include a directional bias to their trading. The Broken Wing Butterfly (BWB) is a more advanced trade, not because it is difficult to understand – but because there are more nuances that require … Read More
Video: How to Short A High Flying Stock
This is one of the videos from our recent series on “How to Be Wrong and Still Book Profits”. Calling tops is generally frowned upon. But this strategy quite possibly may be the safest way to take a counter trend position. No relevant positions. Hypothetical trades are simulated using historic market data. Option Risk Disclosure.
Are You Ready to Build an Automated Trading System? Here’s How
Automation is at the heart of technological innovation. Automatic transmissions Automatic coffee makers Automatic soap dispensers … You get the idea In trading, automation is what allows you to become ultra-efficient, find your best opportunities, scale up with more trades, control risk with less emotion, and become more consistent. As a trader, you already take advantage of automation in today’s markets. … Read More
Mastering Market Orders in Options Trades: A Comparative Guide (RUT vs. IWM)
Limiting risk is critical to the long term success of your trading. Every strategy has a downside. Every trade is subject to having you on the wrong side of a big move. It’s important to have a plan to keep that risk in check. Some options strategies have built in risk. Meaning there is no way to lose more than … Read More
Free Video Series for Systems Trading
We are preparing to develop a series of free videos on the topic of Systems Trading. Systems are applicable for equities, options, futures, and forex traders. They can be as simple as a set of guidelines for entry and exit — or as complex as a fully automated black box. Our focus with SMB Systems is to accelerate your process … Read More
Handling Short Term Noise
The S&P 500 is knocking at the door of the highest close in over a month. The path to this point was not straight. 7 of the past 12 sessions saw the index down significantly at some point during the day or pre-market. Do you get trapped into this noise and make adjustments based on the current tape rather than … Read More
John Locke’s Super Simple Spreads Course to be Available Later this Month
We’re excited to announce our upcoming options trading course that teaches: FOUR systematic strategies that options traders can use to trade high probability spreads that actually have a high probability of success… WITHOUT taking excessive risk. John Locke is one of SMB’s top options traders — and our firm backs several traders that use John’s strategies. We put our money where … Read More