Options Trading Strategy

Buying A Covered Call On Chipmaker Up 75% YTD

Buying A Covered Call On Chipmaker Up 75% YTD

There are primarily two companies known for producing the majority of computer graphics cards (GPUs). Most investors are familiar with NVIDIA (NVDA), which tends to be a high-flying, headline grabbing stock. However, Advanced Micro Devices (AMD) is also a huge player in the industry – but can often fly under the investment community’s radar. Lately however, it’s AMD […]

Continue Reading

How Much Higher Are Interest Rates Going?

How Much Higher Are Interest Rates Going?

If the markets weren’t so focused on the trade war with China, then most of the focus would likely be on interest rates. Of course, the trade war has an impact on interest rates, although it’s not a cut and dry connection. In a nutshell, tariffs could hurt domestic economic numbers, which could certainly factor […]

Continue Reading

A Slingshot Options Strategy For Income And Gains

A Slingshot Options Strategy For Income And Gains

In looking for ways to maintain a bullish stance and generate income while protecting from a downside disaster, the standard collar (long stock, long protective put and short a higher strike call to pay for the put) is the standard approach.  And while there is no reason to re-invent the wheel, there is a small […]

Continue Reading

Here’s A Quick Win You Can Make From Trump’s Tariffs

Here’s A Quick Win You Can Make From Trump’s Tariffs

I’m at the MoneyShow in Las Vegas this week and it’s obvious that interest in options trading is growing by leaps and bounds. Every year, the crowd keeps getting larger. Plus, I notice more sessions and classes about options each time I come. It always makes me happy to see the growing interest in options […]

Continue Reading

Using Options To Capture Twitter’s Upside

Using Options To Capture Twitter’s Upside

There are a few companies out there which tend to be battlegrounds for investors. These are the stocks where there are often loud contingents of both bulls and bears. The arguments can be very passionate on both sides. The investments in these companies can also be substantial (also from both sides). Probably the best example […]

Continue Reading

Covered Call Writing

2 Ideal Stocks To Generate Covered Call Portfolio Income

2 Ideal Stocks To Generate Covered Call Portfolio Income

We’ve enjoyed a tremendous bull market from 2009 into early 2018, but for the past three months the S&P 500 has been in correction territory. Is this another hiccup in the journey upwards, or is it the start of another multi-year period of flat or negative returns? Some investors prefer to avoid that question and […]

Continue Reading

Create Your Own Dividend Using These 3 Covered Calls

Create Your Own Dividend Using These 3 Covered Calls

Use options to enhance your monthly income Fixed-income or retired investors may dismiss using options because they seem exotic. Yet they don’t have to be, and covered calls can provide you additional income without terribly much additional risk than holding a stock. Many of you retired or income investors already own blue-chip stocks in your […]

Continue Reading

3 Blue-Chip Trades That You Win No Matter What

3 Blue-Chip Trades That You Win No Matter What

Learn how to generate extra income using covered calls Options are mistakenly considered exotic securities by the average investor. Like all investments, they can be very risky, but if used properly, they can provide a steady and reliable additional source of income. There is one basic strategy that may be of interest to the average […]

Continue Reading

Sell These 3 Covered Calls For Thousands In Income

Sell These 3 Covered Calls For Thousands In Income

Learn how to profit from income-generating trades on these big names With the market having stumbled earlier this month, you may be wondering how to hedge your portfolio and/or make some additional monthly income using covered calls — especially if you own some very expensive stocks. Selling covered calls mean selling the right to someone […]

Continue Reading

3 Covered Calls For An Uncertain Market

3 Covered Calls For An Uncertain Market

Use these covered calls to hedge your portfolio in 2018 If you were spooked by the sudden correction in the market this past week, you probably realized that you haven’t thought about risk as much as you should have. That’s one of the many reasons to have a long-term diversified investment strategy, with a focus on non-correlated […]

Continue Reading

Options Trading Strategies

3 Smart Trades For A Troubled Market

3 Smart Trades For A Troubled Market

Try these options trades for high-odds profits in DIS, AMD and RUT Another trade war headline delivered another nasty market open. With volatility on the rise and overnight swoons in stock futures now the norm, the environment has turned treacherous for directional traders. If you’re seeking the best trades to weather the turmoil, I suggest […]

Continue Reading

3 Stocks To Buy As Fear Runs Amok

3 Stocks To Buy As Fear Runs Amok

Support is holding so far in DIS, FB and AMZN stock Fear has officially returned. So says the CBOE S&P 500 Volatility Index or VIX, which is spiking to its highest level since Jan. 4. Today we’ll provide context to the panic and identify three stocks to buy. At this morning’s peak of 23.38, the […]

Continue Reading

3 Stocks to Trade After Earnings

3 Stocks to Trade After Earnings

Earnings momentum is driving today’s trio higher The earnings wave rolled on this week. Some stocks were left battered in its wake while others were lifted to lofty heights. I’ve sifted through the winners and losers to discover the best stocks to buy. Today I’ll share my findings. When a company scores an outsized earnings […]

Continue Reading

3 Stocks On Shaky Ground

3 Stocks On Shaky Ground

These stocks are one well-placed banana peel away from breakdowns With equities flirting with all-time highs you might be wondering why today’s gallery is focusing on stocks to sell. The reason is that it’s not just a stock market, but a market of stocks. And there are both winners and losers in every environment — […]

Continue Reading

3 Stocks To Buy At New Yearly Highs

3 Stocks To Buy At New Yearly Highs

Buyers are dominating in CSCO, PYPL and VMW Stocks blasting to new highs usually come bearing gifts — for bulls, at least. If you’re a bear, then beware because these super-powered leaders pack a punch. And that makes them some of the best stocks to buy. I ran a quick scan last night for new […]

Continue Reading

Options Volatility Watch

What’s In Store For Market Volatility? And How Do We Trade It?

What’s In Store For Market Volatility? And How Do We Trade It?

Kids may be getting out of school, but it doesn’t seem like most traders are ready to go on vacation. In fact, it appears that many market watchers are glued to their screen. There’s undoubtedly been a lot more volatility over the past couple weeks than what we’ve gotten used to as the summer approaches. […]

Continue Reading

Earn 272% If Volatility Spikes By The End Of March

Earn 272% If Volatility Spikes By The End Of March

As volatile as 2018 was in stocks, 2019 so far has been anything but. After the first two months of the year, market volatility has been nearly non-existent. It’s much closer to the ultra-low volatility environment of 2017, where the VIX barely cracked 15 the entire year. Of course, we’re starting off from a higher […]

Continue Reading

An Easy Way To Go Long Volatility Using The New SPIKES Index

An Easy Way To Go Long Volatility Using The New SPIKES Index

It’s always fascinating to watch how the market reacts to changes in volatility. It seems like the crowd is always waiting for the other shoe to drop. It’s as if market volatility can’t ever trade at an equilibrium – it’s either too high or too low. When volatility is high, you get a fair amount […]

Continue Reading

Is There Finally A Cheaper Alternative To The VIX?

Is There Finally A Cheaper Alternative To The VIX?

When it comes to trading volatility, The VIX has long held the crown as the most viable product on the market. Products based on the VIX, the S&P 500 Implied Volatility Index, have been one of the most notable additions to the trading universe in the 21st century. In fact, the Cboe Global Markets (BATS: CBOE) introduction of tradable […]

Continue Reading

What Happens Next After VXX Expiration?

What Happens Next After VXX Expiration?

A year ago, several VIX or volatility related products imploded, and were forced to shut down.  It now appears the popular Barclay’s iPath S&P 500 VIX Short-Term (VXX) exchange-traded note will cease to trade at the end of the month. But unlike the VIX, ETN’s, mostly inverse and leveraged — which went poof last February as a spike in volatility […]

Continue Reading

Options Trading

Options Trading: A Probability & Profitability Discussion

Options Trading: A Probability & Profitability Discussion

It’s a well-known investment maxim where risk is correlated to reward.  But, when it comes to options, it seems people are making claims to both consistently hitting singles while simultaneously being home run kings. In my next three articles (this is one of three), I want to explore how returns should be calculated, whether it’s […]

Continue Reading

Do You Want To Become A Better Options Trader?

Do You Want To Become A Better Options Trader?

The passing of Memorial Day, with its historical weight, is also a time to look forward — to the light and carefree days of summer. While some have used this turning of the season to clear “sell in May and go away,” I think it’s a good time to brush up on your options knowledge. […]

Continue Reading

What Percentage Of Options Expire Worthless?

What Percentage Of Options Expire Worthless?

One of the persistent and pernicious myths regarding options trading is that 80% of all of them expire worthless.  The number relies on the fact that most options get closed well before expiration and can create a misleading belief that selling premium is the only sure way to make money trading options. We’ve all seen the marketing […]

Continue Reading

Selling Versus Buying Options: A Risk/Reward Comparison

Selling Versus Buying Options: A Risk/Reward Comparison

Next week I’ll be speaking at the MoneyShow in Las Vegas. It’s one of my favorite experiences every year. Not only is it a great opportunity to meet and talk to other options traders, but I also get a lot of really good questions at the event. I decided that this year I’ll be more […]

Continue Reading

SPIKES Versus VIX: How To Take Advantage Of The Differences

SPIKES Versus VIX: How To Take Advantage Of The Differences

Up until last February, the Cboe’s VIX (S&P 500 Volatility Index) was the only market volatility index which could be traded through derivative products. The index itself is not tradeable, but VIX futures, options on those futures, and VIX-related ETFs are all widely popular products. While the usage of these products varied based on the […]

Continue Reading

Options Trading Basics

2 Essential Options Trading Concepts That You Need To Know

2 Essential Options Trading Concepts That You Need To Know

Market volatility has contracted back down to historically low levels with the VIX, which acts as the benchmark measure, sitting just above 52-week low at the pre-teen level of 12. But, with earnings season upon us, tons of IPOs such as Uber hitting market, and pickup in mergers and acquisition activity such as Chevron’s (CVX) $33 billion […]

Continue Reading

The Inner Workings Of Time Decay In Options Trading

The Inner Workings Of Time Decay In Options Trading

After a steep decline and rapid rebound, the stock market seems to be settling in.  Following such a period of big moves and high volatility, I wouldn’t be surprised if it went nowhere for the next couple weeks, or until the next earnings period. But, as an options trader, one thing’s for certain: Time never stands […]

Continue Reading

The Options Strategy That You Need To Know

The Options Strategy That You Need To Know

One of the most popular options strategies is the covered call, or buy-write, in which one owns underlying stock and sells a call.  It’s a bullish position which generates income through a premium collection. Many investors and money managers consider it a very conservative approach and employ it in their retirement accounts. But suggest selling a put, and […]

Continue Reading

Using Cash-Secured Puts: The AT&T Example

Using Cash-Secured Puts: The AT&T Example

Investors that have the goal of generating income from their portfolio generally have two methods at their disposal to do so. They can simply increase the size of their portfolio and thereby boost the number of dollars that are produced by the portfolio’s average yield.  But “have more money” is rarely an option. Alternatively, investors […]

Continue Reading

The Dummies Guide To Option Greeks

The Dummies Guide To Option Greeks

There you are in a conversation with a professional trader about their strategy and suddenly the “inside baseball” terms start rolling off their tongue – Delta Hedging, Short Gamma, Theta Burn, and Vega Risk.  You smile and nod without perhaps knowing exactly what these terms mean, and just like that, what started as a good […]

Continue Reading