The cool thing about working with smart people is being able to learn from them. Having Sean McLaughlin on our team has made everyone better, not just our clients but us as well. In today's video, we tackle the question of when it makes more sense to finance an options position by selling a different contract to collect the income vs simply just buying calls or puts. As usual, Sean does a nice job of explaining this in a way that anyone could understand.

From the desk of Tom Bruni @BruniCharting

Last week I had the pleasure of being on Real Vision TV where I recorded two segments, one on Bonds and Equities pairs trade (short EWJ/SPY).

The video to the Equities trade is here, but since I'm not sure if/when the free video about Bonds will be out I wanted to go through that trade for you all on the blog. And if the video does come out, I'll be sure to share it.

From the desk of Tom Bruni @BruniCharting

Today there is no shortage of information: Social Media, Blogs, Newspapers, Television, Water-Cooler Gossip, etc., but we still have the same amount of time in a day. We all have to make a decision what we're going to pay attention to and what we're not.

Here's the video from a live interview I did on ET NOW, India's leading business news channel. It's amazing that I could not live further away than I currently do, yet we can still do this sort of thing. Their morning TV is my evening, but it works.

In this interview we discuss the ongoing rangebound market in US Stocks and then we shift gears to India's stock market. We talk about the rotation into small & mid-caps, key levels for both the NIFTY50 and Bank NIFTY as well as the relative strength we're seeing in the bank stocks, particularly ICICI and AXIS Bank.

Here is the video in full:

Tuesday's Mystery Chart received some interesting responses, with some of you stating that the bottom is in, while others said it's still too early to tell.

So let's get into what that chart is and why it's relevant.

From the desk of Tom Bruni @BruniCharting

Tuesday I posted a Mystery Chart that got a lot of replies.

Most said you'd be buyers at current levels or on a pullback, but a number of you were skeptical of the recent move and would be avoiding or fading it.

The feedback I got was interesting, so let's get right into the actual chart.

This week's Mystery Chart was an inverted daily line chart of the Metals & Mining ETF relative to the S&P 500. Below is the corrected chart.

Prices have put in a multi-year top, remain below support and a downward-sloping 200-day moving average, and momentum is in a bearish range. All signs continue to point to under-performance in this market sub-sector.

Click on table to enlarge view.

From the desk of Tom Bruni @BruniCharting

The Research and/or Trading business can be a very lonely endeavor for many, so I wanted to use this post to outline the role that collaboration plays in my process and why I feel it's so important.

Some people actually think this world is just filled with rainbows and butterflies and stocks are always supposed to go up. I never understood that ignorance. Sometimes stocks go up, sometimes they go down and sometimes they go sideways for a while. It will take you less than 5 minutes of market history research to understand this very simple fact.

Of those 3, I would argue we are in the 'sideways for a while' category in U.S. Stocks, particularly the S&P500.

Our Video team has been hard at work publishing the videos of all the presentations from this year's Chart Summit. They sent over this highlight reel that I think shows exactly what went down in Breckenridge last month. If you were not able to attend this year, don't worry, we're already thinking about locations for Chart Summit 2020!

One options strategy that we occasionally employ at All Star Options is a bullish Risk Reversal. This is a trade we like to put on when the cost of naked calls is too high for our comfort (due to high volatility and/or higher priced strikes), and we're comfortable taking ownership of long stock in a "worst case" scenario.

Simply, it is a trade where we typically purchase an out-of-the-money call, and finance this purchase (all or in part) with the sale of an equal amount of naked puts in the the same expiration cycle.

This is an advanced-level trade that requires more buying power than most trades we put on (due to the naked puts component) and a higher level of comfort with risk. A typical risk reward graph would look like this: