Whether the market is exploding higher, diving or just treading water, traders tend to be nervous about the action in the next day, week or month. A bit of anxiety comes with the territory.One indication that the market is getting into nervous territory is the tendency for traders to jump in and out of high-flying stocks while spending most of their time parked in less volatile issues or cash. It?s called ?rotation.?When markets are stuck in a funk, chances are good for managers to sell somethin...

What is the first step (and often last) for the new daytrader? Turn on CNBC and wait for the news, of course (don?t deny it, you have been there). Then when you hear the late breaking ?real time? news, you buy good news (or sell short bad news) in an attempt to beat the other 8 million listeners. Sound like a winning plan?After realizing that is kind of hit or miss, you decide to fire up the ?real? real time news service. Of course, at this point, it hasn?t dawned on you. It is not just the fact...

A long time reader wrote in asking if you get more bang for the buck buying an out of the money option, or a deep in the money option on a stock that makes a big move. Interestingly the answer isn't perfectly cut and dry. Let's look.If you buy an in the money option, that option will indeed track the movement of the underlying stock more closely than an at the money option. The Delta or measure of value is much higher, so when the stock moves, the option tends to move also.If you buy an out of t...