Index Options
Option Selling – It’s a Good Business to Be In
Hans Albrecht
When observing option pricing, we should always remember that premiums, while certainly linked to reality, are somewhat of an imperfect predictive tool. Option prices attempt to forecast movement in equities or indices for a given period into the future, but they are unlikely to be entirely correct in the end. For...
Options in a Recessionary Market
Jason Ayres
Many investors are becoming increasingly concerned that a recession may be on the horizon as North American markets continue to climb higher despite global trade concerns. A recession is defined as a temporary economic decline during which trade and industrial activity is reduced. It is typically identified by a fall in Gross...
Hedging With SXO Options Using Portfolio Beta
Jason Ayres
This year has been one of headline risk and investor hypersensitivity to say the least. Yet despite all the market moving tweets and the ongoing trade tantrum, both U.S. and Canadian markets continue to climb a wall of worry. In fact, I would suggest that global markets in general have been climbing a wall of worry since 2008....
Beginner’s guide to options trading
Montréal Exchange
If you’ve been trading stocks, you should have a pretty good understanding of the mechanics of buying and selling. Getting started with options trading is fairly simple. Here are a few things to know to get started. Step 1: Setting up an options account with your broker The options account can be in a margin or...
Is Gold Breaking Out of its 4-Year Consolidation?
Patrick Ceresna
Over the last few years I have not been shy about my conviction that the gold bear market has ended. There is no denying that the December 2015 lows for gold bullion at $1050.00 are now history, but the enthusiasm for the shiny metal has been left for the diehards as most of the speculative money has turned its attention to...
The Da Vinci Code: The hidden messages within the option chains
Montréal Exchange
Traders are very opinionated and have their own view on everything. This is why we have a market of buyers and sellers. Otherwise, everyone would be on the same side of the trade. This behaviour is built over time from experience and knowledge. You can do it too. For example, you are able to tell if the stock is trending up or...
Evolution, Revolution or Convolution: The Changing Landscape of Exchange Market Structure in North America
Alan Grigoletto
Bill Gates once said, “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.” There is some argument as to which nation created the first exchange....
Option Myths and Misconceptions
Jason Ayres
For those readers who are just beginning their options education journey, I am sure you have been presented with many opinions from other investors and investment professionals alike, regarding the value and risk that options bring to a portfolio. Unfortunately, many myths and misconceptions have arisen due to a lack of...
Risks Stemming from Current Low Volatility Conditions
Patrick Ceresna
Over the last year we have seen an incredible period of low volatility that is arguably building systematic liquidity risks when we enter a period of normalization. These risks were highlighted in the Bank of Canada’s November 2017 Financial System Review. In that review, the BoC discussed the assessment of...
Bulling the Market with a Ratio Call Spread
Patrick Ceresna
Investors have had a good run over the last two months as we have seen the Canadian TSX 60 index roar higher 9% from a September low of 877.00 to its highs near 955.00. The question on everyone’s mind – is it over or is there more room to go? Is it too late to buy or should an investor wait on the sidelines for a...
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