Bank of the Ozarks Purchases Summit Bank

Bank of the Ozarks, Inc., has purchased Summit Bancorp, Inc., and its wholly-owned bank subsidiary Summit Bank (“Summit Bank”). The acquisition involves Bank of the Ozarks taking ownership of Summit Bank’s two Magnolia branches.

Read the Press Release at the Mognolia Reporter

Personal Finance Matters

Putting your money to work doesn’t always mean in a savings bank or term deposit. Many savvy retail investors are now taking up the lucrative opportunities present in trading stock options. All too often investors jump to the conclusion that derivatives carry more risk than reward, however, there are many ways to trade options in a way that minimizes risk on an already purchased stock portfolio. Learn more about the advantages of writing covered calls.

Stock Market Anxiety?

Before jumping right into buying/selling stocks and options, it is wise to familiarize yourself with the current temperament of the market as a whole. That is, how “nervous” is the market right now and what does the market expect in terms of price action in the short term.

While predicting the direction of price action is extremely difficult, estimating the amount of volatility the market  is likely to experience is easy. That is due to an index called the VIX Index, which calculates the implied volatility of the S&P options market to easily tell you if the market is expecting more volatility or less in the short term.

The VIX should be your go to indicator of market sentiment.

Knowing the Value of your Options

How do you know if the price you are paying for an option is cheap or expensive?

Options are complex instruments with many different variables effecting their pricing. Fortunately, options are a mature asset class and there are numerous tools out there for everyday investors to use to make the most out of their trading.

Most of the options traded in the US are called American Options and are best priced using a pricing model called the Binomial Model.