Blog Posts

Options expiration statistics help understand how options contracts behave as they approach their expiration dates. In turn, this can influence trading strategies and risk management. Understanding these patterns can be useful for traders using various types of options trading strategies.   Key Takeaways – Options Expiration Statistics 10% of option contracts are exercised early.  50–60% […]

Options strategies can provide income through various means, such as selling premium, hedging, or through market movements. These strategies try to efficiently balance risk and reward and offer consistent income while managing potential losses. Options strategies for income generally entail concepts such as the covered call and other “covered” concepts involving some combination of having a […]

The Wheeling strategy is a simple yet effective options trading technique.  Based on selling put options and covered calls, this cyclical strategy allows traders to generate income regardless of market trends.  Here, we’ll look at how the Wheeling strategy works, its risks and rewards, and how to use it.   Key Takeaways – Wheeling Strategy […]

Every decision that you make in the financial markets should be formulated as an expected value calculation. Every trade or every bet can be thought of as a probability. There is a probability and reward for being right and there’s a probability and penalty for being incorrect. In other words, how to calculate expected value […]

Max pain is a concept in options trading that relates to potential price movements as options approach expiration. It’s rooted in the idea that market makers, or option writers, have an incentive to minimize the payouts to options holders at expiration.  This idea suggests that, in the final hours or days before options expire, the […]

For options traders, Call Walls and Put Walls offer insights into support and resistance points in the market, particularly as option expiration dates approach.  These levels mark large areas of options open interest and can provide clues about potential reversals or continuations in price trends.  This article explains how Call and Put Walls shape daily […]

Financial markets are complex systems that have long fascinated economists, mathematicians, and market participants.  There are many conceptual frameworks and mathematical approaches to understanding financial markets. One of the frameworks for understanding these markets is through the lens of chaos theory, particularly the concept of level 2 chaotic systems.  This approach helps us understand conceptually […]

In the 1970s, structuring portfolios was much simpler, often following a straightforward “60/40” rule – 60% equities and 40% bonds. Most US investors stuck to domestic stocks and bonds, trusting that this approach provided sufficient diversification. The idea was that equities would drive growth in the portfolio, while bonds would offer stability and income. Fast […]

Paul Tudor Jones, the legendary trader and founder of Tudor Investment Corporation, is known for his market acumen and consistent success over decades. He’s most famous for shorting the market just before the crash of October 19, 1987. In college Jones was very into games like backgammon and chess, which involve probabilities (more the former) […]

Louis Moore Bacon is known for his expertise in global macro trading and risk management.  His trading strategies delivered impressive returns with relatively low volatility.  Bacon’s ability to make calculated, bold bets on global markets has set him apart as one of the most successful macro traders in history.    Key Takeaways – Louis Bacon Trading […]