Options Trading Strategy
A Big Bet That Gold Prices Are On The Move This Summer
With all the talk of interest rates, inflation, and recessions, it’s no surprise that gold has become a popular topic in the financial media. Gold tends to gain popularity among investors when there is uncertainty regarding the economy. More specifically, when there is concern the US dollar is going to become less valuable, gold starts […]
Profit From The U.S.-China Trade Truce With This JD.com Trade
JD may push toward its 2018 highs This morning, I am recommending a bullish trade on JD.com, Inc. (NASDAQ:JD). Earlier this week, I recommended a bearish play on Micron Technology, Inc. (NASDAQ:MU). The market was up from the positive trade news, and I thought a downside trade on a semiconductor stock would be good protection in the event of […]
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 […]
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 […]
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 […]
Covered Call Writing
Buying A Covered Call On Gold Miners
Gold is back in the good graces of investors as lower interest rates threaten to devalue the US dollar. Precious metals tend to be in demand as the dollar goes down, and 2019 has been no exception to this rule of thumb. But recently, the price of gold has really taken off. For the month […]
Buying Covered Calls On The World’s Biggest Company
Quick, without looking it up on Google, what’s the world’s largest public company? Did you guess Apple (AAPL) or Amazon (AMZN)? At times recently, you may have been correct. However, the crown for the largest company is currently in the hands of Microsoft (MSFT). Not only is MSFT the biggest company, it’s also the only company worth over $1 trillion in […]
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 […]
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 […]
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 […]
Options Trading Strategies
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 […]
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 […]
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 […]
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 — […]
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 […]
Options Volatility Watch
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. […]
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 […]
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 […]
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 […]
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 […]
Options Trading
Have Option Gamma Trades Taken Control Of The Market?
Back in my day as a market maker on the floor of the Chicago Board of Options Exchange (CBOE), the third Friday of the month was known as ‘gamma day.’ That was prior to 2005 when weekly options were introduced—to show my age, I was on the CBOE from 1991-2002—and ever since ‘gamma day, it has been a weekly occurrence. Actually, […]
3 Steps For Using Options To Protect Your Portfolio
With the stock market having a sizzling run to new all-time highs, investors are rightfully asking how they can protect their gains while still retaining upside exposure. This is where options trading can be extremely helpful. The most straight forward and simplest form of hedging or limiting downside risk is buying put options. While it is essentially true […]
![Options Trading: Profit And Probability Discussion [Part 3]](http://optionstradingresearch.com/wp-content/uploads/2016/07/stocksvsbonds-150x150.jpg "Options Trading: Profit And Probability Discussion [Part 3]")
Options Trading: Profit And Probability Discussion [Part 3]
If the 2016 election results and market response taught us anything, it’s to expect the unexpected and make sure your positions and portfolio can withstand even the most outlier of events. In [the first part] of this series, we looked at how to properly measure risk and return, before even stepping in the batter’s box. […]
![Options Trading: Profit And Probability Discussion [Part 2]](http://optionstradingresearch.com/wp-content/uploads/2013/01/marketing-research-150x150.gif "Options Trading: Profit And Probability Discussion [Part 2]")
Options Trading: Profit And Probability Discussion [Part 2]
In the [first part of this series], we discussed how returns need to calculate returns on a risk-adjusted basis in both percentage and dollar terms. This applies to within the context of each position but, the overall portfolio. Now, let’s take a look at how setting up the proper risk/reward profile for each individual position […]
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 […]
Options Trading Basics
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 […]
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 […]
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 […]
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 […]
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 […]
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