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Intro to Volume Profile and Value Areas

History Behind Volume Profile The volume profile is a study that goes back many decades to the days of floor trading. Very similar to “market profile” which uses time or “TPO’s” (Time price opportunities), the volume profile simply aggregates where the majority volume...

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Intro to Greeks Part 2: What is Theta?

Furthering the discussion on Options Greeks, after my last post about Delta the next most important Greek to options traders is Theta. Understanding how time passing affects an options price is crucial in determining how you select an expiration cycle and what strike...

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Intro to Greeks Part 1: What is Delta?

If you are an option trader, chances are that you have heard of the Greeks. But if you don’t trade spreads or more multi-leg options strategies you probably don’t care about what they are or how to use them. Some are more crucial to understand than others but if you...

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Trading Vertical Credit Spreads

The prior post I wrote discussed the basics around Vertical Debit Spreads and how to use them. Now let's look at essentially the opposite of a debit spread, which is a credit spread. The beauty of options is that you can construct all sorts of trade strategies based...

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Trading Vertical Debit Spreads

Vertical debit spreads are a great way to lower initial cost on higher dollar stocks that still offer a directional bias on a trade. They are a defined risk trade where the debit paid is the most that one can lose. The long option that is purchased is more expensive...

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Trading with Trendline Analysis

In my recent post on Support and Resistance I pointed out some great ways I like to evaluate key price levels for inflection points and how to anticipate where buyers or sellers might be present. Another extension of this type of chart analysis is using trend lines....

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Intro to Implied Volatility and How to Use It

Implied Volatility or “IV” as I will refer to it for most of this post, is the way the options market prices in the potential movement of a stock price during a specific timeframe. It's not a perfect calculation that forecasts the future volatility of a stock but it...

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Identifying Support and Resistance Price Levels

Following up on the first post I wrote on an Intro to Chart Analysis, the next logical way to analyze price charts is by understanding how to identify support and resistance. These are pivotal aspects to knowing when to enter and exit directional trades and be...

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Why Volume and Open Interest Matter to Liquidity

In a few recent posts I discussed Options Bid/Ask Spreads and Liquidity as well as Expirations and Strike Prices. I mentioned that volume and open interest factor into liquidity when it comes to bid/ask spreads but I wanted to expand more about how and why these two...

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