Viewing entries by
Josh Fabian

Allocating Capital

Allocating Capital

Intelligently leveraging capital gives traders an advantage. When used properly, margin is not risk, in fact, it is key in limiting risk.

Building a Core Portfolio

Building a Core Portfolio

Creating a large portfolio can be intimidating. It begins with selecting “core positions” and then hedging against them.

Passive Investing is Destructive to Wealth

Passive Investing is Destructive to Wealth

An active trader is an engaged trader. Active trading is educated trading. The only way to change the connotation around the word “active" is through education.

Recovering From Losses

Recovering From Losses

Losses are an unavoidable fact of trading. Understanding how long recovering from losses generally takes helps set expectations and reinforces the argument for staying small, trading often and staying in uncorrelated products.

Probability of Touching Both Sides

Probability of Touching Both Sides

Probability of touch (POT) expresses the likelihood of a stock reaching an option’s strike price between today and the option’s expiration. Using POT can help us assess risk in trades such as strangles while at the same time, combating cataracts! 

Short Straddles in Sector ETFs

Short Straddles in Sector ETFs

Sector-specific ETFs offer diversification and require less buying power than index ETFs. Selling straddles in these products also offers a statistically high probability of success.

Probabilities Never Lie

Probabilities Never Lie

Numbers have no agenda. Numbers do not know what they did the day before. They simply communicate the most up-to-date market information and it’s up to us how we use that information.

Cost of Buying Wings

Cost of Buying Wings

There is a direct correlation between risk and reward. The greater the risk, the greater the reward. We can limit our risk, but doing so means taking less profit and accepting a lower probability of profit.  

Options Jive | Where to Place Wings

Options Jive | Where to Place Wings

Setting up wings on a defined risk trade can be done at a fixed width or based on probabilities. How you choose them is up to you.

Alternative to Managing Losers

Alternative to Managing Losers

Managing losing trades is much like containing a disease threatening the trees in your backyard. The earlier we manage the problem, the better off we usually become.

Selling Puts in Beat-Up Stocks

Selling Puts in Beat-Up Stocks

We already know selling out-of-the-money puts can be a consistently profitable strategy. We can increase our probabilities of success if we sell puts in large cap, liquid stocks, following a sizeable pullback.

Delta Hedging: When and How to Take Action

Delta Hedging: When and How to Take Action

Neutral trades are not concerned with direction. Their goal is capturing premium as it erodes over time. Sometimes, however, a stock moves and a neutral trade takes on a directional bias. To keep a trade neutral, we have several different options.

How to Save Buying Power

How to Save Buying Power

Smaller accounts can be challenged to create enough occurrences with limited capital. But that does not mean those accounts cannot create occurrences if they place trades in ways that limit the buying power being used.

Liquidity Trumps All | 10 Reasons to be a tastytrader

Liquidity Trumps All | 10 Reasons to be a tastytrader

After fifty episodes of Tom and Dylan debating active versus passive investing, it was time for a change. This week, Dylan hosted a discussion about the first pillar of the tastytrade method: liquidity.