Lessons from When Genius Failed: The Rise and Fall of Long-Term Capital Management
Lessons from When Genius Failed: The Rise and Fall of Long-Term Capital Management As options traders we need to pause and learn the limitations of the Black-Scholes options pricing formula and other mathematical models, and learn to expect the unexpected.I recently finished working my way through When Genius Failed: The Rise and Fall of Long-Term
Vomma and Your Options Trades
What Is Vomma? Vomma is a second order option pricing Greek that describes how Vega will change given a one point change in implied volatility, but understanding that is just the start of opening the doors to a deeper understanding of volatility. We do not typically hear much about Vomma, as it is not one
Theta and Time Decay
Theta and Time Decay Time Decay and Implied Volatility are two key considerations in the option trading decision making process.Stock options have limited life spans. As an option nears its expiration date it loses time value. Understanding this loss of time value, allows us to increase the probability of seeing profits in our option trading.
Stock Option Pricing and the Greeks
Stock Option Pricing and the Greeks Option Prices Are Effected By Several Factors Called The Greeks, And It Is Critical You Understand What They Are. Options are derivative securities. They derive their value from some underlying security or index and their price is affected by a number of factors. Because of their derivative nature, they
