Multiple criteria are typically used to analyze potential individual equity option trades. In this first of two parts, we introduce the most efficient approach for selecting these criteria: the Pareto-optimality.
Continuously modifying the weights of an options portfolio — dynamic hedging — suffers from high transaction costs and the existence of price gaps. A better way to hedge may be with a static-replicating portfolio.
Wedge patterns are a favorite of intermediate-term traders. However, these simple price patterns also develop on the smallest of time frames, offering up numerous scalping opportunities throughout the trading day.
A Virginian by birth, Bob Kapp’s lived in London for more than a decade and is now the senior carbon trader at Macquarie Bank, a career that began while studying government and economics at the College of William and Mary in the early 1990s.