Posts By: Steve Claussen


Today’s volatility highlights the problem with stop orders!
The tremendous movement, i.e. volatility we have experienced today, in the markets highlights the multiple problems with the reasoning that using stop orders is good discipline to limit your downside in your stock positions. Using stop loss orders simply cannot provide the dynamic hedge that options provide. GAP risk By far the biggest issue with…

liveACTION Scanner Can Help Sort Through The Noise!
What a week! Friday’s fall in the SPX was the 8th largest point decline, but the 3.1% the index shaved from its value didn’t come close to making the top 20 percentage sell-offs. Monday morning the pre-market futures (-75 points) are indicating a very weak open to trading. Volatility is higher everywhere, but where should…

It’s getting a bit scary out there!
Discipline for a volatile (bearish?) market. Last week the major market indexes showed remarkable resilience actually gaining in the face of the Chinese central banks devaluing the yuan and oil prices falling. This week the market is not holding up nearly as well as evidenced by Thursday’s 2% plus declines in Dow and S&P 500…

Option Expiration, Assignments and Exercise
One of the more misunderstood aspects of trading options for new investors is the option’s expiration process, exercise and assignment of their open contracts. Since we are coming up to the monthly August expiration this Friday, it seems timely to address this and shed some light on these option terms and actions. Expiration Date Listed…

The US Stock market has proven to be remarkably resilient
The U.S. stock market is proving to be a resilient creature. Even with the volatility caused by the Chinese Central Banks surprise devaluing of the yuan last week, the major U.S. averages stabilized and actually posted weekly gains. The Dow Jones Industrial Average and the Standard & Poor’s 500 gained just over half a percent,…

Trading Elevated Volatility During Earnings Season
I wrote this blog last Thursday at noon, before Amazon’s surprise earnings announcement and subsequent spike in the pre-market the following morning. Now, what is interesting is we can look back on the actual results and Monday Morning Quarterback my premise. (Spoiler alert: I couldn’t have been more wrong with the magnitude of the price…

Monday Morning Musings
What a difference a week makes! Last Monday investors were coming off of a Tech inspired rally which put the Nasdaq composite at an all-time record on the back of a massive positive earnings move by Google. To me, it felt like investors were a bit giddy waiting on Apple earnings Monday. Apple’s silence on…

Monday Morning Musings
Last week, the major market averages showed some sustained positive price movement. The S&P 500 index up almost 2.5%, the Russell small cap index lagged a bit but still posted a weekly gain of 1.2%, but the star of the show was clearly technology! The Nasdaq Composite rose almost 1% Friday to close the week…

When can a Credit Call Spread cost you more than the difference between the strikes? Watch out for dividends!
I have seen pretty experienced option traders get caught in a losing trade thinking that a credit call spread can never be worth more than the difference between the short and long strike prices. Credit Call vertical trades are typically taught as limited reward limited risk trades, where the difference between strike prices is the…

Monday Morning Musings
A roller coaster is the best description for the price action last week as the combo of the Greek debt crisis and the bear market in China sent major averages sharply lower Monday and into Tuesday. However, this market has been nothing if not resilient. Dovish Fed minutes, a reversal in Chinese share prices, bolstered…

Low Volatility Is Not Guaranteed
There is a great article today from the Wall Street Journal cautioning traders against allowing the recent history of low volatility of returns in the U.S. equity markets to cloud their better judgment with the assumption that a low volatility environment with positive returns will continue. The headline focus has now shifted from the Greek…

Monday Musings
Overseas markets have taken a beating today and the pre-market futures in the US imply a drop on the opening of over 1% this morning as negotiations in the Greek debt talks fell apart over the weekend. Any market rallies last week were attributed to optimism that some compromise would occur and the harsh reality…

Monday Musings
The Fed was the star of last week holding rates steady as expected but indicating that it would begin to increase the Fed Fund target rate sometime this year. The market’s immediate reaction was muted on Wednesday immediately following the announcement. The statement included a reduced economic growth forecast from the Fed and indicated that…

Nervous about a market pull back? How to take some chips off the table.
Many investors seem increasingly nervous about the market’s prospects. Just when traders felt that any more upside was limited due to the fact that the major indexes seemed stuck in a downward funk, with 3 straight down weeks, the Bulls enjoyed a sudden 1.3% rally on Wednesday this past week. Just as quickly, Friday morning’s…

Monday Morning Musings
Thanks to a big up day last Wednesday, the Dow Jones Industrial Average and the S&P 500 were able to scratch out small gains last week, but the technology NDX (Nasdaq 100) was not as fortunate for the bulls and experienced a small weekly loss.   Greece was the headline concern. The IMF said that…

Monday Musings
Markets tend to move in trending fashion. “The trend is bullish, the trend is bearish,” normally pretty obviously identifiable for traders. This is why moving averages are so important, to assist active investors in identifying what type of market environment we find ourselves. Well despite a third consecutive weekly decline in the major averages, this…

Options 103 For Stock Traders – Buying Stock at a Discount
Today’s blog will discuss another cool thing that can be done with options for our stock traders out there. I call this one the ‘Priceline’ method of using options to buy stocks. Priceline – where you get to pick your price for airplane tickets. Awesome business model right? You might not get the flight, but…

Enhanced Position Window Icons – Keeping You Informed
On your OptionsHouse platform, we use ICONs to quickly give you visual notices within the position window. We recently added two critically important, informative icons to the list showing upcoming earnings and dividend dates to keep you better informed as an active investor. Here is a quick rundown of what all of our icons mean.…

Monday Musings
The major indices were down again Friday (5/29), down 3 out of the 4 trading days in the holiday shortened week, but posted a gain overall for the month of May, disappointing the “Sell in May and go Away” short sellers. The headline reasons for the recent weakness centered around a contracting revision to first…

Stay in control when you are on the go! Alert Manager now available on mobile.
This last week of May has made it obvious. The markets can be volatile! The DJIA moved down triple digits Tuesday (5/26) and right back up the very next day. Additionally, the NASDAQ set an all-time record closing high; 24 hours after some analysts were screaming it is time to head for the sidelines. It…

Monitor & Manage Expiring Options
You can filter your position pane to easily monitor and manage expiring options! Expiration management is a critical component of successfully using options in your trading. If you have an option expiring on the upcoming Friday, chances are you received a friendly reminder email from us on Wednesday morning which looks something like this: The…

Monday Morning Musings (On Tuesday This Week)
Though last week only showed small gains for the major indexes, the S&P 500 set an all-time record high Thursday and the NASDAQ 100 came really close to setting a record of its own. Friday’s minor selloff only caused the DJIA to lose ground for the week. Last week, more mergers and acquisitions were announced,…

Platform Short Cuts – Position Window: Adding a Covered Call to your Stock Positions
If your position at OptionsHouse consists of straight long stock, I encourage you to read the recent blog post describing the Covered Call. In it I described how it is critical to have price targets to the upside on stock you own. Further, using a basic options strategy, you can actually get paid today to…

Options 102 For Stock Traders
What can be done with Options? Your first Options trade. Generating income from your buy and hold stock positions! One of the first options strategies employed by the typical stock trader is the Buywrite or as it is also known the Covered Call. Instead of the typical definition of the strategy I would like to…

Monday Morning Musings
The S&P 500 index rallied Thursday and Friday to set consecutive closing all-time highs. Recent bond market volatility less and towards the end of the week. Several M and A actions (Verizon buying AOL and Danaher for Pall) seemed to put investors in a buying mood. All but nine PPI numbers allowed investors not to…

Options 101 For Stock Traders
Why Options? If you are an established stock trader but have discovered OptionsHouse, you obviously are interested in learning more about options. Maybe you are tired of listening to your neighbor boast over cocktails at the block party about how he is killing it trading options and you want in on the action. Better yet…

Platform Short Cuts
Navigational Short Cuts: Did you know that the headers of the mini windows are clickable shortcuts to populate the main window on your OH platform? If you are like me, you want to see all of your pertinent account info at all times. I personally have one set of mini windows set up on my left-hand…

Monday Morning Musings
One of the principal reasons trading the markets is so interesting to me is the crowd-mentality riddle. How can everyone seemingly hate the market and SELL SELL SELL one day – then just as quickly, everyone absolutely has to own stocks the next? BUY BUY Buying stocks with both hands. What causes this market volatility?…

Monday Morning Musings
“Sell in May and go away” is an old Wall Street adage. Like most old adages, they get dusted off and repeated publicly when the current market conditions are demanding an explanation to the masses for the madness. Last week the markets were setting up for significant losses, especially in Tech due to some negative earnings results…

Don’t write off the VIX yet!
Among a flurry of articles stating that the VIX was broken, the old fear gauge finally shows signs of life today. After spending the last week with a 10 handle, levels not seen since pre-financial crisis in early 2007, a double digit decline in the S&P 500 futures yesterday caught some traders by surprise. The VIX…