In Day Trading Options, expert option trader Jeff Augen shows you how to continue to profit even in these chaotic times. You’ll learn to structure short-term trades that exploit well characterized price distortions and anomalies. You’ll discover a breakthrough technique for utilizing volatility to identify the beginning and end of short-lived trends. And, you’ll gain the knowledge to use this innovative technique to take advantage of financial news and planned events, rather than being at their mercy.
This book is a product of one of the most challenging times in world financial history. Stated bluntly, the world’s financial markets have become a gambling casino where equity, bond, commodity, and currency prices have virtually no predictable direction. Stock prices have become particularly unstable in the sense that they have virtually no relationship to the underlying performance of the company they represent. In the very week these words were written, the Dow fell 330 points on Tuesday, rallied 280 points on Wednesday, and fell another 250 points just after the open on Thursday morning. Worse still, the collapse on Tuesday was caused by a sell-off in financial stocks—the very stocks that fueled the rally the following day.
At the time of this writing, trillions of dollars had been lost by both bulls and bears. The markets were often described by both the financial press and national politicians as being in a “meltdown” with no end in sight. Investors who have never experienced a crashing market often believe that it is easy to generate profits in this environment with short positions. The result has been a new generation of exchange traded funds (ETFs) designed to rise when specific classes of investments fall.
There are ETFs that short gold, oil, bonds, indexes, and equities in various sectors. Many are labeled “ultra-short” because they are structured to rise at twice the rate of decline of the underlying instruments. These investments are available to anyone with a brokerage account or an IRA and, unlike with traditional short positions, no margin is required. An investor can readily use these vehicles to short homebuilders, retail stores, banks, or just about any group of stocks, indexes, or financial instruments desired.
- Basic Concepts
- New Directions in Automated Trading
- Trading Volatility Distortions
- Working with Intraday Price Spike Charts
- Special Events
Day Trading Options: Profiting from Price Distortions in Very Brief Time Frames By Jeff Augen pdf