OPTIONSMART MORNING UPDATE: Sunday Edition

1. OUTLOOK: Stocks traded in lackluster fashion for most of the session, but some late pressure caused stocks to close at session lows and conclude the year on a weak note. Many analysts think that it's unlikely the market will do as well in 2010 as it did this year. The signs of underlying demand continue to be pretty soft. Google will reportedly launch its Nexus One smartphone next week. QQQQ implied volatility continued to drift higher. The tech sector looks for direction.

.

 and receive pre-market

real-time updates and comments!

2. FEAR GAUGE: QQQQ implied volatility continued to rise.  

About Implied Volatility.  Investor fear and greed play a significant role in financial markets. The question is, how can investors measure market sentiment in an emerging market situation? How can they gauge the fear? Volatility is a well-known measure of risk in financial markets. When volatility is low, there is a lack of fear. High volatility, however, suggests a fearful markets. Volatility can be calculated in two ways. Either from historical stock price data or from current option price data. Using the second method results in an implied volatility measure. It is a reflection of fear and greed amongst a wide group of market professionals. It’s not wise to ignore this parameter.

4. WISDOM NUGGETS: Don’t try to catch a falling knife.

5. SPECIAL OFFER:Tap into QQQQ PIcks's remarkable win ratio -  97% (124 of 129) winners since 2003!  Save 10% on recurring subscriptions by entering coupon code E2EC during checkout (expires on Jan 10, 2009). New subscribers only.

 Learn more about our services and special offers!