As the trading year comes to a close, we wanted to take this chance to thank our viewers for being a part of the tastytrade community in 2015.
As a part of our holiday celebration, we are highlighting 4 Market Measures segments from the past year that you might have missed.
We invite you to watch these episodes when your schedule allows (maybe a nice binge-watching session over the holidays???) and also encourage you to send us any questions or feedback from the past year that might help us refine our programming for 2016.
Without further ado, we turn to a brief review of some popular Market Measures segments from 2015 that you might have missed!
Segment #1: Covered Calls: Comparing Strategies
Why We Like It:
One of the most utilized options strategies in modern trading is the covered call - a strategy that combines a long stock position with a short call.
This episode of Market Measures provides a more advanced rundown on covered call writing and different approaches traders can take when deploying this strategy. Hosts Tom Sosnoff and Tony Battista compare a traditional long stock position with an at-the-money covered call and an out-of-the-money covered call, as outlined in the slide below:
Even veteran traders can benefit from some of the data presented on this episode as it clearly illustrates the risks and rewards of the three different positions - as well as the type of volatility a trader can expect to experience holding them.
Segment #2: Healthcare | Trading Biotechs
Why We Like It
Having managed options portfolios in the pharmaceutical and biotechnology industries for many years, I may be a bit biased toward this particular episode.
Aside from the jagged decline in oil prices, the biotechnology sector has been another big story this year. After reaching all-time highs in July, the closely followed ETF in biotechnology (known by its ticker "IBB") has experienced significant volatility throughout the third and fourth quarters in 2015.
This episode of Market Measures provides an overview of the biotechnology sector, breaks down recent trends, and highlights potential pitfalls in this often-volatile sector.
Through a wide-ranging discussion, Tom and Tony explain why high implied volatility in this particular sector can actually be less attractive due to the high frequency of binary events that drive stock movement.
For more information on trading options in the biotechnology sector, this episode represents a great starting point.
Segment #3: Large Moves in the Market
Why We Like It
According to tastytrade research, larger moves in the market have been more muted in recent years. In 2015, the market saw a couple large downdrafts in June/July and then a more extreme move lower in August/September.
Since Fall, the market had been steadily rising until another bout of volatility materialized in early December. It will be interesting to see if the market once again shrugs off negative momentum and finishes the year near or above all-time highs.
This episode of Market Measures helps illustrate how large moves in the market have been observed less frequently in recent history as compared to the rest of the decade.
The graph below provides clear evidence of this trend:
Once again, we want to thank you for your participation in the tastytrade community and for your support in 2015. What’s been your favorite segment of 2015?
We look forward to continuing the journey with all of you in 2016!
Sage Anderson has an extensive background trading equity derivatives and managing volatility-based portfolios. He has traded hundreds of thousands of contracts across the spectrum of industries in the single-stock universe.