Meme Stocks Clown Their Way to the Top | Weekly Recap
Meme Stocks Clown Their Way to the Top | Weekly Recap
By:Ryan Gaynor
A weekly roundup of tastylive videos offers the best trading tips from the network’s wealth of financial shows
Why You Should Ditch Stop Loss Forever | Options Backtest
In this week's Market Measures, Tom Sosnoff and Tony Batista discuss the efficacy of using stop-loss orders in trading.
Through a study comparing strategies of managing trades early against implementing stop-loss orders, they find that managing trades early generally yields better financial outcomes.
The analysis shows that using stop-loss orders can unnecessarily cut trades short when opportunities to manage and control risk might still be present. Specifically, setting a stop-loss at three times the initial credit was the closest in comparison to an early managed trade in terms of profitability metrics.
However, the primary benefit of stop-loss orders remains the defined-risk nature of the trade. Through this exploration, Sosnoff and Battista emphasize a preference for management strategies over stop-loss orders for better trading outcomes.
We Wish We Knew This About 0DTEs Sooner | Options Backtest
Amid all the discussion about GameStop (GME) and AMC Entertainment (AMC) Tom Sosnoff and Tony Batista discuss the profitability and risk associated with trading GME options, particularly focusing on zero-days till expiration (0DTE) trades executed near market open versus those near market close.
Sosnoff and Battista look at an analysis of 52 weeks of data, which revealed selling short premium (strangles and straddles) in the morning has been generally profitable with a moderate win rate and manageable losses.
In contrast, similar trades made in the final 30 minutes before the market close were unprofitable, characterized by a higher win rate but significantly greater losses due to outlier moves. The insight stresses caution and suggests potential strategies for retail traders engaging in high velocity 0DTE options trading.
Meme Stocks Round 2: What You Need to Know
The discussion on this edition of Let Me Explain revolves around the current phenomenon of meme stocks, emphasizing GameStop's (GME) situation and contrasting it with the 2021 market dynamics, delineating between gamma squeeze and short squeeze.
The conversation between Tom Sosnoff, Tony Batista and Chris Vecchio examines the intricate nature of market movements, the role of retail vs. institutional investors, and the strategic considerations for trading in such volatile conditions.
The panelists caution against expectations of a repeat of the GameStop saga due to different market conditions and share shorting percentages. Additionally, the dialogue touches on broader market trends, the allure of meme stocks to retail investors, and the potential impacts on the trading landscape. The nuanced exchange encapsulates the complexity and speculative nature of contemporary trading environments.
Ryan Gaynor is a video content specialist at tastylive.
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