The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to answer the question, “What is a head fake in stock trading?” I love the idea of understanding some of this terminology and jargon when you hear it talked about and we use this a lot too. I don't use the word, head fake all the time, but we talk about it sometimes when we have very specific setups in stocks and we might refer to as one thing as a head fake or not. Let me build the context around this because I think it's better to understand it contextually in a scenario. Let's say we have a stock that's trading and it's trading at $100. Quickly, the stock moves up to $105. Now, this is where the fake part of this comes in because what people might see if the stock makes a huge move in one direction, say from $100 to $105 very quickly, they might think that that is a big breakout in the stock and what might happen then shortly after that where the head fake kind of comes into play or is completed,