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Improved Market Liquidity and How to Identify These Opportunities
Tony Zhang
Liquidity is a very important factor when trading options as it determines how easy it is to be filled at a competitive price when entering the trade, as well as how easy it is to exit the trade. Volume and open interest tend to be the first things retail traders look at when considering liquidity, but these do not give the...
Should you take advantage of unusual options activity?
Montréal Exchange
Savvy investors are always scanning the market to find opportunities that can be exploited for profit. One such strategy consists of taking advantage of unusual options activity. Learn the ins and outs of unusual options activity in an article sponsored by National Bank Direct...
Benefits of a covered call option strategy
Montréal Exchange
Covered call options refers to holding a stock as part of your portfolio while simultaneously selling a call option on the same stock. Owning the stock outright is quite simple but deciding which option chain to sell can be a challenge. There is no one-size-fits all approach to selling call options. Some of the variables to...
Using Bollinger bands to optimize option strategies
Montréal Exchange
Bollinger bands are among the most widely used technical indicators when analyzing a stock and can also be used by options investors to develop strategies. The bands may reflect a trading range for an underlying stock based on recent volatility patterns, similar to how market makers price options. Option investors who are able...
Risk management tips for active traders
Montréal Exchange
Professional investors, especially billionaire hedge fund managers, spend a lot of time carefully reviewing their portfolios to ensure risk is minimized. Unfortunately, many investors fail to take the necessary steps to do the same and evaluate their holdings. One of the most important questions investors need to ask themselves...
Using options to invest in value and growth stocks
Montréal Exchange
Value stocks, as the name implies, offers investors exposure to a company that is valued at a lower price relative to its fundamentals. Growth stocks often refer to small companies that operate in a new market that is likely to experience higher than average growth rates. Investors may want to seek out a mix of growth and value...
What is covered call writing?
Montréal Exchange
A covered call strategy consists of an investor selling a call option on a stock that they own. While this may sound complex, covered call strategies are quite simple and suitable for some beginner options investors. A covered call writing strategy offers the investor a form of hedging against downside risk. Essentially, the...
Three mistakes to avoid when trading options
Montréal Exchange
Option investors of all shapes and sizes, from billionaire hedge fund managers to new investors managing $500, make mistakes. To suggest that it is possible to avoid errors when investing is simply foolish. But what is true is that these investors can take steps to understand how to avoid careless mistakes which minimizes the...
Should you buy a put option or a call option?
Montréal Exchange
When determining whether to buy a put or call option, investors owe it to themselves to study and develop their own individual investment strategy, particularly with respect to the options market, which might appear more complex when compared to buying shares. Learn more about buying put options and call...
Risk and Money Management in Trading
Montréal Exchange
There is always a level of risk when investing in securities, whether it be options, fixed income or forex. The risk associated to each asset class depends on the characteristics of the asset itself and how it is affected by the factors that relate to it. For example, fixed income is generally deemed a very safe asset class...
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