Blog Posts

MBS are essentially bonds backed by pools of mortgages. When homeowners make their mortgage payments, those payments flow through to the MBS investors. This offers investors a way to participate in the real estate market without directly owning properties. For traders, they offer a different type of fixed-income product to trade.   Key Takeaways – […]

A volatility surface is a three-dimensional representation of option implied volatilities across different strike prices and expiration dates. It’s an important form of visual analysis in options pricing and risk management. It provides a view of how the market perceives volatility for a particular underlying asset.   Key Takeaways – Volatility Surface Shape reveals market […]

Volatility trading is an advanced approach to trading. These strategies are primarily used in options trading, but they can also be applied to other financial instruments.  Focusing on the magnitude, speed, or variation of price movements – rather than their direction – enables traders to potentially profit in both up and down markets. It’s gained […]

The Percent Risk Model is a risk management, betting strategy, and position sizing framework that helps traders protect their capital while maximizing potential returns.  This approach focuses on limiting the amount of risk taken on each trade to a specific percentage of the total trading account.   Key Takeaways – Percent Risk Model Capital preservation […]

The 1-3-2-6 system is a betting strategy in trading for binary outcome-type instruments like binary options. Traditionally, it’s been a popular betting strategy used in various forms of traditional betting, in games like blackjack and roulette.  This system is designed to help traders manage their risk while potentially maximizing their profits through a structured approach […]

The Labouchere System – also known as the Cancellation System or Split Martingale – is a betting strategy used in trading. Developed by Henry Labouchere, a British aristocrat and politician in the 19th century, this system was initially designed for roulette but has since been adapted for various forms of trading and other betting games. […]

Behavioral finance is a field of study that merges psychology and finance to explain why people often make irrational financial decisions that deviate from traditional financial models. For traders, behavioral finance helps understand the cognitive biases and emotional responses that can lead to suboptimal trading outcomes. Overall, it looks to better understand the mental side […]

Trading provides value to the financial system and economy in several key ways. Some who don’t understand or like finance, markets, or trading might claim it’s a “waste of time” or that other industries should be getting more of the talent that the financial industry gets. What exactly is the function and value of trading? […]

Fibonacci betting refers to a position sizing strategy based on the famous Fibonacci sequence, particularly with instruments involving binary outcomes (e.g., binary options).  This approach is based on the Fibonacci sequence, a series of numbers where each number is the sum of the two preceding ones.    Key Takeaways – Fibonacci Betting Structured Position Sizing […]

The D’Alembert System is a betting strategy with applications in trading.  Named after the French mathematician Jean-Baptiste le Rond d’Alembert, this system is based on the principle of equilibrium in nature.  While originally designed for traditional betting games like roulette or sports betting, it’s found applications in various forms of financial markets trading.   Key […]