Volatility

Volatility Crush: A Misunderstood Term
June 23, 2021
Concepts

Volatility Crush: A Misunderstood Term

Montréal Exchange

Volatility crush is among the more common but poorly understood terms used by new options investors. They mostly place irrational bets on options ahead of earnings because they do not fully understand what they are doing. These investors will take a look at a high-priced stock that is set to report earnings in the near-term and...

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3 years ago
Long Straddle with Cineplex
September 11, 2020
Trading Idea

Long Straddle with Cineplex

Patrick Ceresna

Before the corona crisis hit, Cineplex was scheduled to be taken over by UK-based Cineworld Group in a $1.65 billion transaction. Cineworld was going to pay $34 per Cineplex share. However, the closing of the Canadian economy due to the coronavirus crisis led Cineworld to claim that there had been a material adverse change...

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4 years ago
Bear Call Spread in the XIU Market
September 09, 2020
Bearish Outlook

Bear Call Spread in the XIU Market

Patrick Ceresna

The stock market has rallied a long way from the March lows. The iShares S&P/TSX Equity 60 ETF (symbol XIU) is up almost $8 from that scary day on March 23, 2020 when the market reached bottom. The rally has been steady, with few pullbacks. However, it is completely natural to expect that, eventually, there will be a...

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4 years ago
Using options in times of market uncertainty
July 07, 2020
Bearish Outlook

Using options in times of market uncertainty

Martin Noël

In times of market uncertainty like we are seeing now, many investors turn to options for the protection they can provide. Although the markets have recouped a good portion of their losses of the past few months, we cannot rule out another plunge that could test the depths of the recent decline. The high volatility in today’s...

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4 years ago
Butterfly on Shopify
June 10, 2020
Concepts

Butterfly on Shopify

Patrick Ceresna

Recently the Royal Bank of Canada lost its title as our country’s most valuable company in terms of market capitalization. For two brief weeks, Shopify sat at the top of the heap.   Chart 1: Royal Bank vs. Shopify May 31, 2020 Source: Bloomberg   SHOP’s run has been a sight to behold.   Chart 2: Shopify...

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4 years ago
Understand the “Rule of 16”
April 23, 2020
Concepts

Understand the “Rule of 16”

Steve Sosnick

Professional options traders are really good at dividing and multiplying by 16.  That seems like a weird skill, but it is a crucially important one for anyone who wants to fully understand the terminology used in options markets.  No matter how you utilize options, the “Rule of 16” is critical for analyzing volatility,...

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4 years ago
Making the most of volatility in these uncertain times
March 26, 2020
Bearish Outlook

Making the most of volatility in these uncertain times

Martin Noël

In our last article we discussed how to reduce the risk associated with the time-value decay of options in a directional position. Now we will take advantage of the market meltdown to discuss the implied volatility in the price of an option, how it reflects the degree of market uncertainty over future price movements in the...

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4 years ago
What do Cannabis, Nelson Peltz and Hedging Have in Common?
April 04, 2019
Protection

What do Cannabis, Nelson Peltz and Hedging Have in Common?

Jason Ayres

On March 13th, Aurora Cannabis Inc. (TSX: ACB) announced that they had appointed Nelson Peltz as a Strategic Advisor to help explore potential partnerships and advise on the company’s global expansion strategy. This is a big deal given Mr. Peltz’s business history and reputation for delivering results. For more details...

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5 years ago
Perspective on the Volatility on Cannabis Stocks
October 01, 2018
Volatility

Perspective on the Volatility on Cannabis Stocks

Patrick Ceresna

Speculation is enthusiastically running wild in the Canadian cannabis industry over the last 2 years.  This has led to extraordinary volatility and gains for investors who seek a stake in the industry.  For this article I will refrain from offering my opinions to the merits of this investment and rather focus on sizing up the...

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5 years ago
Is Gold Breaking Out of its 4-Year Consolidation?
April 24, 2018
Volatility

Is Gold Breaking Out of its 4-Year Consolidation?

Patrick Ceresna

Over the last few years I have not been shy about my conviction that the gold bear market has ended.  There is no denying that the December 2015 lows for gold bullion at $1050.00 are now history, but the enthusiasm for the shiny metal has been left for the diehards as most of the speculative money has turned its attention to...

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6 years ago
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