Options Trading Strategy
Make This Trade To Prepare For The Next Black Swan Event
After 2008, a new kind of fund came into existence. It has since carved out a little niche for itself in the extremely competitive world of money management. These types of funds are generally called tail-risk funds. They attempt to protect against worst-case market selloffs, also known as black swan events. Why did tail-risk funds […]
Get Paid To Own Gold
The markets may have recovered from the disastrous last quarter of 2018, but that doesn’t mean all the trouble is behind us. There is plenty of risk to take into account in the coming weeks. In other words, investors should remain cautious. The Fed decided not to raise rates in January and plans on being […]
A Bullish Bet On Netflix That Can Make 85% Gains
The FANG stocks can be quite polarizing for investors, and Netflix (NASDAQ: NFLX) is no exception. The streaming video giant (and the N in FANG) also may be the most volatile of the four. You can usually count on it for some action every few weeks or so. Of course, NFLX just posted earnings so there was […]
Does Texas Instruments Represent A Selling Opportunity?
Texas Instruments (TXN) shares are up over 6% to $102 following its earnings report. I think it represents a selling opportunity. The company beat on the bottom line by $0.02 but missed revenues with a YoY decline. More worrisome is the company lowered next quarters guidance by some 17% to $1.12 per share saying they see […]
A Stock Replacement Strategy For Emerging Markets
The benefits of options are numerous, as anyone who has traded them can readily tell you. We often talk about the leverage, flexibility, and definable risk characteristics of options as clear benefits to using them. Options strategies can be wonderful tools for risk management as well as speculation. What’s more, options can serve as an […]
Covered Call Writing
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 […]
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 […]
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 […]
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 […]
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 […]
Options Trading Strategies
3 Leading Stocks To Buy On The Dip
High probability buy setups are forming in today’s trio. A rare down day is forming on the Street today amid widespread profit-taking. With equities experiencing their most significant drop in weeks, it’s worth surveying the landscape to spot the most attractive stocks to buy. Selloffs sport many silver linings, like the revelation of relative strength […]
3 Retail Stocks To Buy As They Rise From The Ashes
BBBY, NKE and LULU stock are all flashing attractive setups The past month’s rousing market rally has been a rising tide lifting all boats. Every sector has participated in the broad-based boom, and some industries have even reclaimed all that was lost during December’s disaster. The action in retail stocks has been particularly strong with […]
3 Tech Stocks On The Brink Of Breakdowns
Nvidia, Netflix and IBM are one accident away from severe breakdowns The extremely bearish reaction to yesterday’s Federal Reserve announcement has my inner short-seller itching for a trade. And it’s not as if there’s a shortage of downtrends to select from. Throw a dart, and you’re bound to find something limping into year-end. Today we’re focusing on […]
Useful Guidelines For Credit Spread & Iron Condor Trading
The stock market continues to fluctuate wildly, on Monday the Dow Jones went from being down 500 points to close positive. Today, it quickly erased a 350-point gain. But within these huge intraday swings, the market seems to be carving out a defined range. This creates a good opportunity for selling credit spreads in general and iron condors […]
3 Bank Stocks Falling On Inverted-Yield-Curve Fears
Yield curve inversion is haunting these three bank stocks in particular The number of bogeymen haunting the Street is increasing. From tariffs and trade wars to crashing oil prices and a global economic slowdown, traders have a growing number of concerns to worry about. One of the new kids on the block that is making […]
Options Volatility Watch
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 […]
Volatility Will Normalize And Here’s How To Profit When It Happens
Market volatility has essentially become a mainstream metric in the investment realm – especially for anyone who does any short-term trading. Most traders are now aware of what the VIX is and how a higher level in the volatility index usually means more uncertainty in the market. While investors and traders may not be able […]
An Easy Trade To Make Money From Recent Market Turmoil
Trading market volatility can be very profitable because it tends to be more predictable than picking market direction. Yet, volatility trading can also be risky because of its tendency to make big moves on very short notice. Both February and October of 2018 are good examples of this scenario playing out. Still, one volatility behavior […]
Futures Trading: Will VIX Term Structure Remain Calm?
Despite increasing drag of trade tariffs and swirling cross-currents of currency valuations curtailing global growth causing overseas markets in bear territory, the U.S. stock market keeps powering higher. And judging from the Volatility Index, or VIX traders expect the calm to continue even as we head into the notoriously turbulent month of October. The term […]
A Quick Trade To Profit From This Summer’s Volatility?
Most investors (and all traders) are aware of what market volatility is. When stocks are moving all over the place, it’s pretty obvious to most anyone who follows the markets that it means volatility is high. And when nothing is going on and stocks are moving sideways, it’s easy to recognize that as a low […]
Options Trading
5 Tips To Become A Better Stock Trader
Trading is hard, but these 5 tips should help make it easier Are you looking to become a better stock trader? Whether you’re swing trading or day trading, learning how to trade stocks isn’t really that difficult on the surface. Develop a system, follow your rules and makes tweaks to improve it along the way. […]
1 Predictable Pricing Behavior That Savvy Options Traders Use
Earnings season officially kicks off next week with some of the big banks such as JP Morgan (JPM) and Bank America (BAC) set to report on Tuesday and the first of FAANG, Netflix (NFLX) reports on Thursday. Earnings can be very tricky to trade as there are many moving and unknown parts; will the company miss or beat expectations, what will be the […]
Your Questions, My Answers For $7,050 In “Bonus” Monthly Payouts
We received many thoughtful questions after last Wednesday’s “options for income” editorial. (If you missed the original piece, you can read it in its entirety here.) Many of you are understandably interested in my favorite strategy for generating thousands of dollars in extra income each month regardless of what happens with the S&P 500. After all, it’s […]
Options: Short-Term Money-Making Opportunities
All the political and policy noise is about to brushed aside by what really matters for stock prices- earnings. And this is shaping up to be one of the most interesting, and possibly treacherous, earnings seasons in many years. Here is what you need to know. Earnings season kicked off on Friday with big banks […]
Options: How To Buy Them Before They Expire Worthless
One of the persistent and pernicious myths regarding options is that 80% of all them are worthless. The number belies the fact that most options get closed well before expiration and can create some misleading beliefs that selling premium is the only sure way to make money trading options. We’ve all seen the marketing emails […]
Options Trading Basics
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 […]
Mean Reversion: What Stocks And NFL Teams Have In Common
By studying the long-term performance of professional sports teams, investors can gain a sense of a stock’s future returns. Mean reversion controls stock market returns as much as the outcome of sports competitions. It’s easy for sports fans to assume a championship team will continue its stellar performance into the next season. It’s equally easy for investors to extrapolate a […]
Key Metrics: Price To Sales Ratio
Today I want to take an in-depth look at what James O’Shaughnessy, author of What Works on Wall Street, found to be the best historical value metric… the price to sales ratio. I’ll discuss how to calculate it, what it tells us, and how you can incorporate the metric in your investing approach. What Is Price To […]
Option Basics – Debit Spreads
It’s time for the third installment in our tutorial series on option theory. In the last two installments we we covered option basics and then did our best to give you a head start on how to interpret option greeks. Today we’re going to jump right into debit spreads and explain why they often may be preferable to trading […]
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