Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Should We Anticipate a Long December?


Sticking to spreads in these modest dips may help pass the time -- a little.

If we've learned one thing this week, it's that pre-anticipating pins rarely works well. See Reviewing Four Tech Stock Pins.

Even with yesterday's mini excitement, it's still not a volatile week. Yet of the stocks we've highlighted this week, most flipped toward a strike that looked unlikely as recently as Tuesday night.

And keep in mind, it's not like we crashed, SPY was down all of 1.27% yesterday.

But we're not here to talk about the past. It's time to start pre-anticipating December volatility carnage!

Well maybe. I noted the other day that when I ran numbers for my book, December pops out as the month where options consistently overprice "reality" by the widest margin. Keep in mind options almost always price higher in volatility terms than stocks actually move, it's just more pronounced in December.

Of course price matters too, and with index volatility hovering near 52-week lows, and many individual names trading at 18 month lows, it's tough to pull the trigger too aggressively on sales. So I'm sticking more to spreads, shorting put spreads for the most part into these modest dips.

Take a 2 week FREE trial to OptionSmith by Steve Smith to access Steve's options portfolio & receive trade alerts

Register For Minyanville's Holiday Festivus '09 Here
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos