The Utility Player: How Big
Should My Options Trade Be?
Figuring out the size of your options trades takes
more than deciding what percentage of your total
capital to allocate. It has to do with how much your
account grows and your risk tolerance. Look at your
portfolio as a whole before sizing up your positions. Cover Photograph by Dan Saelinger
Pairs Trading: The Third
Dimension of Trading
When you think of pairs trading, you
might be thinking of trading two correlated stocks by shorting one and
going long on the other. Find out about
other strategies you could use.
Vega: It's Not the Number
Traders live for volatility, and vega may
help you understand your exposure to
volatility. Here are some long vega strategies you may consider trading when
there’s a pop in vol, plus short vega ones
to try trading when there’s a vol crush.
All in the Ratio:
Fundamental Analysis for Futures
Short-term opportunities or long-term
trends—futures traders use unique
ratios to assess their plays. Even if you
don’t trade futures, find out how you can
use the crack spread, beans/corn
ratio, and yield spreads as secondary
indicators for trading the equity market.
Think of vega and volatility
as siblings—related, but each
doing its own thing.
Vega: It’s Not the Number
You’re Thinking—Page 24