All posts by Max Ganik

3 Reasons Why I Love Trading Butterflies

Leave a comment

Over the last few weeks I have started to trade butterflies more frequently. I have been trying out a new strategy to fit my risk profile while increasing my profits exponentially with little added risk. The one thing that is needed to trade butterflies is patience. As I mature as an option trader I have learned that the one thing that has made me successful is patience, and without it, many of my trades would have never reached their potential, or I would have exited with losses to soon and not give myself a chance to recover. There are three reasons as to why I love trading butterflies: there is very little time decay, you have a phenomenal risk/reward, and you do not need a big move to be profitable.

Keep Reading

Trading Spreads: Spread Trades Vs. Outright Calls and Puts

9 Comments

Trading Spreads or Trading Outright Calls?

One of the biggest problems that an option trader faces is assessing whether an option is worth buying/selling. This is especially true when the implied volatility in a name is very high. For example, when the weekly straddle on the SPY costs $5 on a Monday (like it was today), if you wanted to play the SPY for a directional bet, you must be wondering whether it is a worthwhile play. In times like these a trader must consider trading spreads instead of just trading outright calls and puts.

Lets look at an example of how a spread would be beneficial when trading SPY when the IV is high.

Keep Reading

Is the Real Breakdown Coming, or is this Another Fake-out?

3 Comments

Today the S&P 500 had a range of over 2%, starting out the day up .7%, only to then close down 1.3%. Most, including myself, thought that the incredible AAPL earnings would have given way to a strong session for the broader market. It sure seemed like it would at 11pm last night when the S&P futures were up 1% and the Nasdaq futures were up 1.5%. However, the “sell-the-rip” theme came back into play overnight and throughout the morning. Today’s session tells us a few very important thing about the weeks to come for the broader market.

Keep Reading

Breakout/Breakdown Coming Very Soon for S&P 500

4 Comments

For the last few weeks the market has been range bound with a slight negative bias. We are currently sitting in-between the 50dma and the 100dma, but more importantly we are only $7 above the 200dma. With the VIX at 20, I believe that we are heading for a breakdown, probably on the heels of either inaction on the part of central banks, a further breakdown in oil, or weak earnings. There are a few technical signs that point to a bigger breakdown. First of which is a head and shoulders pattern.

Keep Reading

Why This Year’s Santa Claus Rally Could Be Very Strong

Leave a comment

This last week the market took a tremendous hit. The S&P 500 had its worst week in a few years, down 3.5% while the VIX shot up over 80%. This has left many Wall Street analysts questioning whether there will be a Santa Claus Rally. I may be the only one saying this, but I actually think that this pullback increases the likelihood of a Santa Claus Rally. So why do I feel this?

Keep Reading