Drivers Ed … But for Options
Hey Traders, Do you know what sign this is? It’s a stop sign, obviously. But you didn’t need to see the word STOP written in all-caps to know that, right? EVERYONE needs to know that is a stop sign — even without words. Just knowing, though, doesn’t mean you’re a good driver. Or that you […]
Win Rate?
Hey Traders, “What is your win rate?” It’s a common question from those interested in Option Pit services … Personally, I’m surprised people care about this so much, because it misses the big picture. For me, it has always been about how much money I can make in total, not individual wins and losses. But […]
Sometimes You Just Buy the Stock
Hey Traders, I almost never prefer stocks over options. Why would anyone buy stock, when they can get the leverage that options create to express a long or short position. I was able to return over 90% on a $5,000 account in my Littlejohn options trading program between Nov. 1 of last year and the […]
Should You Stay or Should You Go?
Hey Traders, Trades go down sometimes … It happens to the best of us. Believe it or not, every now and again … even I put on a losing trade. In fact, this week I put on a loser in BlackBerry (Ticker: BB)! I bought puts and two things happened: The stock stopped dropping Implied […]
How the GameStop Saga Ends
Hey Traders, While the WallStreetBets community absolutely kneecapped a couple of hedge funds, those holding the stock now that the “squeeze has ended” (or are buying more) need to go back and read about how short squeezes expire. They are not a new phenomenon; they happen all the time. And the result is almost always […]
The Real Secret Behind GME
Hey Traders, Newsflash: The Great GameStop Saga of ‘21 is actually closely related to … my Facebook page? Allow me to explain … When I look at my Facebook newsfeed, I see what all my friends, annoying lovely neighbors and crazy relatives are up to. But in between dance recital pics and cat memes, Facebook […]
Sour Grapes? You Bet!
Hi Shoppers, Back in the day when there was only one exchange for an order to go to, individual market makers provided the liquidity to fill customer orders. Those market makers competed with each other for price discovery. This is how it worked on the Cboe … A broker walked into a trading pit of […]
Hunky-Dory VIX? Not Quite
Hey, Traders. With a decent market rally move of the day Thursday, the VIX had a precarious drop. Even with the end of day rally, the VIX finished down 7 points … And the drop pulled down the entire VIX curve with it. As you can see below, the VIX futures went from a full […]
The Worm Has Turned… What’s next?
Hey There Income Hunters, Well, the patience paid off … And, boy, was it worth it … a recent put spread play produced a 60% profit — in just six days — for a 3,500% annualized return! This is how the divergence between price and relative strength of price played out: On Jan-08, SPY set […]
Tuesday’s Make or Break Session
Hey Traders, While the headline on Wall Street is Game Stop, at Option Pit we know that the VIX is what really tells the story for the markets. When the VIX is saying “look out,” those in the know heed the warning. This is why Tuesday’s session was so important. The VIX Light closed Monday’s […]