Options Trading

Market Sentiment

Durable orders report shows a weakening economy but if we exclude the transportation sector that declined in nondefense aircraft orders, every remaining sector showed substantial growth. In total, durable orders excluding transportation indicate substantial 0.6% growth.
New home sales 288,000 in August same as July these numbers could be false, because of statistical manipulations.
All in all, yet, there is no certainty to both directions of the economy, neither a double dip recession nor sound growth, and that for itself are good news.

Market Sentiment

On the news today: Consumer sentiment commentary: This Sentiment is reflected by well known factors such as unemployment rates and gas prices. It relays on a simple psychological sentiment and does not correlate statistically with consumer spending, therefore it has little analysis value to understand the broad economy's direction.  At 10:00AM EDT is the Consumer Confidence Index will be announced, on August it was 53.5 higher than July 51.2. Market analysis estimates are a possibility of a double-dip recession and the Index will pull back to 50.0.  Most of the impact on the consumer confidence comes from a weakening in the labor market, as we recall the labor index decreased from -40.7 to -41.9.

We all know how to use options and profit from stock trends, but how can you tell at a glance, what is the realistic probability of the trade becoming profitable? The answer lies on few stock metrics, namely: Volatility, and technical status, as well as the breakeven point of the trade in terms of stock price percentage movement... read more