Featured · By the numbers
A Butterfly Spread Is the Cheapest Way to Be Precisely Right
When you have a precise price target and a date, a butterfly buys that view for a small, fixed debit; wrong targets cost only the debit.
4 min read
Viewpoints
Opinion pieces that take a position on a trading or investing decision, run a hypothetical company or position through the numbers, and say where the position stops holding.
Stock Trading
Everything on stock trading →-
The case
An At-the-Market Offering Sells Into Every RallyAn ATM program puts a steady seller of new stock into every bounce, and a falling price makes each dollar raised cost holders more shares.
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By the numbers
Averaging Down Moves Your Break-Even Less Than You ThinkAveraging down lowers the break-even only by enlarging the position, and the price usually moves it less than the size moves your risk.
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The case
Stock Warrants Are Dilution on a DelayWarrants are shares already sold with delivery postponed; count them as dilution now, sized for the day the stock trades above the strike.
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Swing Trading
Everything on swing trading →-
House rules
A Pullback on Low Volume Is the Only Kind Worth BuyingBuy a post-breakout pullback only when volume runs below its average; heavy volume on the way down is selling, and the stop goes under the breakout.
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The case
Out-of-Sample Testing Is the Only Part of a Backtest That CountsJudge a trading method only on data held back from tuning; the in-sample result mostly measures how well you fitted the past.
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The case
Swing Trade the Leading Stock in the Leading SectorFor trades held days to weeks, pick the strongest stock in the strongest group; the laggard's discount is usually information, and the tailwind matters most.
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Options
Everything on options →-
Myth check
A Ratio Spread Hides a Naked Option in the Fine PrintA zero-cost ratio spread is an uncovered short option with a subsidy attached; size and approve it as one.
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The case
Options Calendar Spreads Are a Bet on VolatilityA calendar spread profits from a quiet stock only if back-month implied volatility holds; treat it as a volatility trade first.
4 min read
Prop Trading
Everything on prop trading →-
By the numbers
A Prop Firm Payout Comes Out of Your Drawdown CushionSize a payout request by the cushion it leaves above the loss floor, and cut your risk per trade after every withdrawal.
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House rules
Position Size for the Losing Streak You Have Not Had YetSize every trade from the drawdown limit and the losing run you have not had yet, since size alone decides whether the account survives it.
4 min read
Dividends
Everything on dividends →-
By the numbers
Plan an Income Portfolio Around the Next Dividend CutSet income spending as if one holding cuts its dividend every year; a plan that needs zero cuts breaks on the first one.
4 min read
Earnings
Everything on earnings →-
By the numbers
Holding a Stock Through Earnings? Size It by the GapThrough an earnings report, the gap sets the loss and the stop does not, so size the position from the loss you accept on a large gap.
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The case
The Strong Dollar Impact on Earnings Shows Up in GuidanceA strong dollar cuts real reported dollars from foreign sales, and the guidance built on those rates matters more than the headline beat.
4 min read
Investing
Everything on investing →-
By the numbers
A Buyback Only Helps When the Share Count Actually FallsA buyback helps holders only by the net fall in the share count, and stock awards can refill most of what the company buys.
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The case
Run a Reverse DCF Before You Build the Forward OneSolve for the growth the price already implies before forecasting your own; the gap between the two is the analysis.
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By the numbers
Volatility Drag Makes Smooth Returns Compound FasterAt the same average, returns that swing less compound to a higher balance; judge any holding by what it compounds to.
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Myth check
The Sector Rotation Model Is Tidier Than Any Real CycleThe rotation clock is a stylized model; treat it as a checklist of what to watch and let measured relative strength say what is leading.
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House rules
Your First Stock Portfolio Needs a Sell Rule Before a Tenth StockWrite the trimming and selling rules before you add more stocks; a size cap and a broken-thesis exit shape a first portfolio more than stock picks.
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Myth check
Your Index Fund Has a Concentration Problem TooA cap-weighted index fund puts its biggest slices in its biggest companies; know that weight before you add the same names on top.
4 min read
Economics
Everything on economics →-
Myth check
Stop Trying to Name the Market Cycle Stage in Real TimeNobody can name the cycle stage while it is happening; write rules around conditions you can observe now and act on those.
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The case
Watch PMI New Orders Before the Headline PMI NumberRead the new orders component before the headline PMI; it tracks demand that has not yet reached production or earnings.
4 min read
Reading a viewpoint
The position sits in a box under the headline, and the numbers that carry it sit beside it. Read those two first and you know whether the argument touches the way you trade before you spend time on the case for it.
Then swap in your own numbers. The worked examples use hypothetical companies and positions, so the share dilution calculator or the average down calculator will redo the sums on yours. Terms a piece leans on are defined in the dictionary, and practical how-to questions live under walkthroughs.