Uncovered Options Trading System
Some of the terms used in ETFs trading:
P/B ratio -
Average ratio of price to book value of stock in an ETF, weighted by their
representation.
P/E ratio - Average ratio of price to annualized earnings of stocks in an ETF, weighted by
their representation.
Standard deviation
Measure of fund volatility in percentages. Standard deviation measures the
average variability of the fund's returns over a time period. Stable investments
like money market funds have standard deviations near zero, while high-risk
equity funds often have a much higher one. A standard deviation of 10 means
approximately 68% of the time a fund will be within 10% of its mean (average)
price.
Sharpe ratio
A risk-adjusted measurement of fund performance. Sharpe ratio is calculated by
dividing the excess return of a fund over the risk-free rate (Treasury bonds) by
its standard deviation. The higher the Sharpe ratio, the better a fund's
risk-adjusted performance.
Naked options trading is very risky - many people lose money trading them. It is recommended contacting your broker or investment professional to find out about trading risk and margin requirements before getting involved into trading uncovered options.