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Day trading is risky, and the U.S. Securities and Exchange Commission has made the following warnings to day traders: [19] Be prepared to suffer severe financial losses; Day traders do not "invest" Day trading is an extremely stressful and expensive full-time job; Day traders depend heavily on borrowing money or buying stocks on margin
A short iron butterfly option strategy will attain maximum profit when the price of the underlying asset at expiration is equal to the strike price at which the call and put options are sold. The trader will then receive the net credit of entering the trade when the options all expire worthless.
While the S&P 500 was first introduced in 1923, it wasn't until 1957 when the stock market index was formally recognized, thus some of the following records may not be known by sources. [ 1 ] Largest daily percentage gains [ 2 ]
Mildly bullish trading strategies are options that make money as long as the underlying asset price does not decrease to the strike price by the option's expiration date. These strategies may provide downside protection as well. Writing out-of-the-money covered calls is a good example of such a strategy. The purchaser of the covered call is ...
The maximum profit of a protective put is theoretically unlimited as the strategy involves being long on the underlying stock. The maximum loss is limited to the purchase price of the underlying stock less the strike price of the put option and the premium paid. A protective put is also known as a married put.
Largest intraday percentage drops An intraday percentage drop is defined as the difference between the previous trading session's closing price and the intraday low of the following trading session. The closing percentage change denotes the ultimate percentage change recorded after the corresponding trading session's close.
Usually the performance of a trading strategy is measured on the risk-adjusted basis. Probably the best-known risk-adjusted performance measure is the Sharpe ratio. However, in practice one usually compares the expected return against the volatility of returns or the maximum drawdown. Normally, higher expected return implies higher volatility ...
Price action trading is about reading what the market is doing, so you can deploy the right trading strategy to reap the maximum benefits. In simple words, price action is a trading technique in which a trader reads the market and makes subjective trading decisions based on the price movements, rather than relying on technical indicators or other factors.