It Takes Two To Tango

The S&P500 closed today above 2000 for the first time, marking a major milestone in the post-implosionary bull market of 2009. No doubt, traders are nervous of the melt upwards in US indexes as the Fed trims their balance sheets. Perplexingly, the $VIX still indicates a...

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An Irrationally Exuberant Approach To Biotechnology

Frothy Valuations in the Markets and You August 24, 2014 We learn from our mistakes, at least I hope we do. Below is a chart comparing four of the biggest "bubbles" in US market history: Courtesy of Macrotrends.com I'm going to refrain from using the term "bubble" and...

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Tesla Contracts: Get 'Em While They're Hot

Contracts in Tesla are currently sitting at an implied volatility of 35.97, which indicates that Wall Street saw risk in owning shares in the company lower only 2% of the time since its IPO in 2010. A brief look at a chart in $TSLA shows pretty drastic price action this year,...

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What's In Store This Week, Lady Wall Street?

The S&P500 moved a whopping 1 point downward last Friday after seeing a high of 1964 and a low of 1942. A brief mid-morning rally that breached the critical 1960 resistance came to end when news of trucks exploding in Crimea caused a sell-off in the indexes. The 1940 level...

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From S&P Dusk Till Dawn

As we head into fall, the S&P500 and VIX have continued their respective churn up and retreat back. The end of the world was briefly interrupted today when Russia extended their proverbial olive branch with promises to ease aggression in Crimea, slamming crude oil futures...

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Tekmira Pharmaceuticals and a Lesson in Stock Volatility

Tuesday, August 12 - Shares in Tekmira Pharmaceuticals (TKMR) imploded 22% after today's opening bell with a 3.75% drop after-hours. That's a single-day drop of nearly 26%. Put another way, the market capitalization of the company fell $130,000,000 in about 10 hours and put...

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Ebola and the Volatility of Market Speculation

Tekmira Pharmaceuticals (TKMR) is currently the only company in the world that has access to a potential treatment for Ebola. Due to the urgency of the current Ebola outbreak, the FDA has removed a hold on its development through its phase 1 clinical trials in hopes of allowing...

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August 11th, 2014: Markets See Little Upside Risk in Crude Oil

To put it bluntly, crude oil got slammed pretty hard in the past few weeks. September futures on NYMEX for crude approached a seasonal high of $110 in June. Nothing unusual there. Historically speaking, oil trades higher in the summer months for various reasons (e.g. peak travel,...

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It's All Greek to Me: Options Delta (A Practical Guide)

In this series, I will give a brief overview of the option greeks. These values underlie options pricing in accordance to the Black-Scholes model. I'll try to describe how these apply to option valuation in the real world and some rules of thumb for using these values. The...

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The Only Thing to Fear is Fear Itself

The VIX closed today at 16.87 with a 30-day forward looking volatility of 100.42. The VIX has nested itself comfortably above 16, with the area between 14.5 and 15 acting as support. A few days ago, I talked about the volatility of the VIX itself (remember, the volatility...

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Visualizing Risk and Volatility: A Catastrophic Approach

"I like this concept of “low volatility, interrupted by occasional periods of high volatility”. I think I will call it "volatility". - Daniel Davies Risk and volatility are rather abstract concepts. They certainly exist in the world, but don't readily manifest themselves in...

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