The stock market tends to revert to its average price over time. This means that if stock prices move too far above or below their average, they are more likely to move back towards the average in the future. This is because many forces are at work in the market, including buyers and sellers, and…
The stock market has a habit of mean reversion, which means that stock prices tend to return to their average price over time. This is because there are many forces at work in the market, including both buyers and sellers, and these forces tend to balance out over time. Let’s look at the following scenario:…
OPEX, or options expiration, is the day on which stock options contracts expire. Stock options give the holder the right, but not the obligation, to buy or sell a certain number of shares of a stock at a certain price by a certain date. If an option is not exercised by the expiration date, it…
OPEX day in the stock market is the day on which most stock options expire. It typically occurs on the third Friday of each month, but it can be moved if that day is a holiday. As traders, it might be interesting to ask this: What has happened the day before options expiration day –…
We are approaching the end of September; historically, the end and beginning of a month have been positive. We have covered this anomaly multiple times for the S&P 500/SPY. Let’s find out how Dow Jones Industrial and its ETF (DIA) has performed since its inception in 1998. We use the following trading rules: Trading Rules…
The relationship between interest rates and stocks is crucial to understand if you are investing in the stock or bond market. How does the S&P 500 perform when interest rates are rising? Interest rates and the stock market have an inverse relationship. When interest rates rise, share prices fall, and vice versa. This is a…
Volume trading strategy is a trading method that involves analyzing the volume of shares or contracts that are being traded in a particular stock or market. The idea behind this strategy is that high trading volume can indicate strong buying or selling pressure, which can be used to make trading decisions. Successful trading is based…
To many, trading stocks is all about making a single buy of a stock, waiting for it to reach your profit target, and exiting your trade. While that is an effective way to trade, you may be able to make more profits by trading around a core position if both your technical and fundamental analysis…
Inflation is one of the most popular and important economic indicators. It is monitored by everyone — businesses, financial regulators, and investors. Not only does it guide regulators in their policies, but also, it affects businesses, which in turn, influences investors. But what exactly is inflation, and how does it affect stocks? And more importantly,…
September is a poor month for stocks, especially the week after OPEX day, which is the third Friday of the month. Trading Rules [am4show have=’p2;p3;p58;p59;p130;p138;’ user_error=’Premium Post Access’ guest_error=’Premium Posts’] Let’s backtest to find out the performance for the week after OPEX day in September. Amibroker code: We buy at the close of OPEX Friday,…
