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What is R-Value and R-Multiples ?

R-Value is the initial risk based on your stop loss. R-Multiples is the amount profited (or lost) expressed as a multiple of the trader's initial risk capital.  
The concept is based on reward-to-risk analysis. When you get -1R return essentially, the stop loss was carried out with respect to your trading strategy. You can only lose the amount of R-Value defined prior to entering the trade. When you get 3R return, you make 3 times the initial risk. 
Traders want their losses to have R-multiples of (0 and -1). The following expression can be used to calculate the reward/risk ratio. 
R-Multiple = (Expected Exit Price - Entry Price) / (Entry Price - Stop Loss)

Frank S.

What is Open Interest and Why Does It Matter

Open interest (OI) is not the same as volume. With volume, both entries and exits cause the volume to increase. Open interest shows how many contracts are currently outstanding (open) and have not been closed out. 

Ex: Seller sells one contract to the buyer. The buyer is long the contract, and the seller is said to be short on the same contract. In this case, open interest increases by one. Open interest decreases when buyers (or holders) and sellers (or writers) close out more positions than were opened that day. 

How is it calculated

Add all of the contracts that are associated with opening trades. Then, subtract all of the contracts that are associated with closing trades. Note: Open interest is a lagging indicator and is not updated during the trading session. The OCC post the information at the end of day.

Open interest measures activity and can vary from the call side to the put side, and from strike to strike. Options with high OI reflect greater liquidity for that contract. A decline in open interest during a trend may indicate a reversal.

Frank S.

What is the difference between AMEX and NYSE?

The American Stock Exchange (AMEX) used to be a larger competitor of the New York Stock Exchange (NYSE) until acquired by NYSE Euronext in 2008. Smaller companies tend to list on the AMEX when they cannot meet the NYSE’s strict listing and reporting requirements.  Today, the NYSE, NYSE MKT, and NYSE Amex Options are owned by the Intercontinental Exchange (ICE).

Frank S.

What is the difference between OTC and Pink Sheets?

OTC and Pink Sheets are securities that do not trade on the Nasdaq or NYSE. They are usually higher risk, low liquidity companies that have failed to meet listing requirements. Both are considered unlisted securities and are traded through an interdealer network. OTC is required to register with the Securities and Exchange Commission and FINRA however, Pink Sheets do not require registration and do not always have to file regular reports.

Frank S.