By Dr. Mircea Dologa, MD, CTA*
Posted: Jun 26, 2009

As most of us know, a pitchfork can't be constructed without knowing the exact location of the anchor (P0 pivot) and the P1 and P2 pivots, which will dictate the size and the slope of the P1 - P2 swing.

First, let me describe the morphology elements of the common pitchfork:

The length and slope of the handle will definitely influence the performances of the pitchfork's task. The handle is defined as the distance between the anchor (P0 pivot) and the P1 - P2 swing's midpoint (refer to Figure 3).

By Guy Bower of www.guybower.com*

OK, hands up, anyone here who has ever bought an option, then seen the market move in your favor but watched the option premium not move along with it. Come on: Be honest.

There are generally a number of reasons why this happens. The reason a trader might make this mistake is because he or she operates under the belief that he or she is trading the market, not the option. One of the messages all of my articles have in common is that an option has its own characteristics, and you should know them before you trade.

The reasons for the option premium not behaving the same as the market can all be answered by the “Greeks”, as they are called. The delta, the gamma, the theta (and those other little ones) are all measures that show how an option can change, given certain other changes (changes in time, the market and so forth).