There is nothing like a good dose of humor to cheer one up from the otherwise depressing economic situation. The honors go to Norgate Investor Services who compiled the amusing Devil’s Dictionary for Financial Markets. The title was borrowed from Ambrose Bierce’s The Devil’s Dictionary – a great work of diabolical appetites published in 1906.

Enjoy the A to Z of satirical investment definitions.

Analyst recommendations: Strong Buy – Buy Buy – Hold Hold – Sell Sell – It’s too late

Arbitrageurs: large traders who feed on plankton.

Averaging down: lowering the average price of

...

If you know what an iron condor is—which, if you’re reading this, you probably do—you also know that it isn’t the only options strategy out there. It’s worked very well for us, consistently providing close to 10% average monthly returns—but a lot of our subscribers have expressed an interest in, shall we say, a bit more variety. Sure, our bonus trades mix it up a little, but we thought it was time we started talking about other kinds of trades on a regular basis. That’s why we’re introducing Calendar Options. Condor’s Complement So what’s the best way to complement our iron condor positions? We like the idea of profiting no matter which direction the market takes from week to week, especially with so much economic uncertainty out there right now. So we’re going to stick with the delta-neutral theme for our ...

As you probably know Iron Condors are short Vega - which represents your positions sensitivity to shifts in implied volatility. In a relatively low volatility environment this can be troublesome when suddenly volatility spikes and your Iron Condors suffer as a result. So lets say you add some Vega to your portfolio by buying some 4 month calendars (ex: June/October) to hedge against an expected volatility pop. You now have a net Vega position of 100, your Delta is flat and you have some good Theta. The next day the VIX spikes up 2 points on some heavy selling. In theory you should get close to 200 bucks from the pop since you have 100 Vega and volatility went up 2 points. To your suprise your portfolio suffers just as if you had never even added the calendars - in fact it seems they made it worse. So what gives? ...