Let's start off with a discussion on volatility (vega), which is one of your greeks. When there are unkown events, vega can be driven up and as that unkown event takes place (is known) volatility, aka uncertainty drops.
RIMM has been beaten up bad (and probably rightly so as I am a Crapberry owner and it is a malfunctioning, sick product), but they do have some positives to their product lineup. Is the stock oversold at 35 (a 50% discount from recent highs)? I am not sure and I really don't care. What I want to get across though is the volatility game. It is a widely traded stock and lots and lots of pent up excitement means big premiums. Big premiums for sellers and expensive premiums for buyers. Here is a snapshot of the volatility chart for RIMM. Remember, volatility up, stock prices down (and/or some big event).
Past performance is not indicative of future results.
If you own the stock, you can protect it by buying out of the money (still expensive due to an increase in volatility) puts. If you want to trade the earnings event, you buy puts and calls and hope for a HUGE explosion one way or the other. All I know is if you aer buying out of the money puts and calls and it turns out to be a dud, you are out of luck - hard to believe it will be a dud. Here is a great article explaining that.
To the overall markets and the SPY. So far the March low is holding. Until it is broken, the 1260ish level is acting as support. Lots of people are calling for a pop back to 1300 in SPX - hallelujah! if that happens as I will be buying protection like crazy for the June-July period as well as thankfully writing my June-July portfolio management trades. Here's the snapshot of that support:
Past performance is not indicative of future results.
Moving into forex, it was a day full of DOUBLE FALL LINE TRADES as the equity markets rallied, fell, rallied, fell and finally rallied. Lots of movement in a relatively small range for equities and forex, but if you are patient and wait for the "edges", you can put on some low risk, high reward (and high probability) trades. It makes for a long but productive day in front of the computer. All snapshots are the USD/CAD:
Past performance is not indicative of future results.
Past performance is not indicative of future results.
Maybe we will get a double bottom on the equity close:
Past performance is not indicative of future results.
I have a hard time traders will go home long and maybe, just maybe if oil can sell off early, there may be a bit of a risk trade to buy the dip. I am watching USO and a couple of individual stocks. Check out the at the money premiums. 1% for one day if you are willing to take ownership. Not too shabby. Thank you VIX for returning premiums to decent levels.
Finally, I have to thank the Salt Lake Trading Club. You guys are a talented crew with great enthusiasm and knowledge and I look forward to speaking to you again soon!
Happy Trading and Be Environmentally Cool
Coach Brian
Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.
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