Options Trading Strategy

Earn Income While Hedging Against Market Uncertainty

Earn Income While Hedging Against Market Uncertainty

Covered calls are quite possibly the best investment strategy on the planet. How many other strategies lower risk, provide income, and potentially allow for capital growth? There’s reason why so many fund manager employ covered calls as a cornerstone of their trading plans. What can be surprising to many covered call traders (new and experienced […]

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A Deceptively Easy Way To Make 133% Profits From Higher Interest Rates

A Deceptively Easy Way To Make 133% Profits From Higher Interest Rates

Despite all the headlines about the upcoming trade summit with China, it’s interest rate expectations that are more likely driving the financial markets. Yes, a trade war with China is bad for both countries (and the global economy) and a resolution would certainly be good news for stocks. However, from a global perspective, interest rate […]

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Here’s How To Profit When The Dollar Tanks

Here’s How To Profit When The Dollar Tanks

With the Fed announcement behind us, it’s time to start thinking about how to trade the expected slow increase in interest rates. The next small rate increase is expected in December, and then there could be two or three more incremental increases in 2019. Of course, we can’t predict definitively what will happen. A change […]

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Make Money On A Big Move In Oil – In Either Direction

Make Money On A Big Move In Oil – In Either Direction

With all the coverage of how the stock market is reacting to mid-term elections and the most recent Fed statement on interest rates, it’s easy to forget about oil. The fact is, crude oil prices have moved quite a bit over the last couple months without garnering a lot of attention from investors. The United States […]

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A Quick Way To Hedge Your Portfolio Into The New Year

A Quick Way To Hedge Your Portfolio Into The New Year

Despite the volatility and heavy stock selling in October, many analysts are expecting the remainder of 2018 to be bullish. The S&P 500 was only up 3% year-to-date after the October bloodbath (prior to mid-term elections), so it stands to reason that stocks are more likely to go up in the final two months of […]

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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 […]

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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 […]

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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 […]

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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 […]

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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 […]

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Options Trading Strategies

3 Bank Stocks Falling On Inverted-Yield-Curve Fears

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 […]

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3 Tech Stocks To Buy As They Fight Tooth And Nail To Stay Afloat

3 Tech Stocks To Buy As They Fight Tooth And Nail To Stay Afloat

These tech stocks aren’t going down without a fight Fear came to Wall Street this fall. From tariffs and trade wars to rising interest rates and a slowing economy, jittery investors have had a spate of negative news to worry about. Tech stocks bore the brunt of the damage with high growth, momentum names falling […]

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3 Video Game Stocks That Investors Are Turning Off

3 Video Game Stocks That Investors Are Turning Off

EA, ATVI, and TTWO are all in trouble. Gaming stocks scored monster gains during our decade-long bull market. But with market jitters now coming home to roost, these high multiple growth stocks are finally receiving their comeuppance. The selling pressure came to a head last week when industry leader, Activision Blizzard (NASDAQ:ATVI), cratered 12% on disappointing earnings […]

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3 Relative Strength Stocks To Buy Now

3 Relative Strength Stocks To Buy Now

These three stocks to buy stand out from the pack as bullish sentiment returns Wednesday’s market moonshot was a bear killer and that gives us a good reason to seek stocks to buy. We finally saw strength return to growth stocks as the Nasdaq Composite led the charge with a 3% gain that pulled the Index back […]

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3 Bank Stocks To Sell On This Bounce

3 Bank Stocks To Sell On This Bounce

Bears are frolicking in the banking sector — join them! Beaten-down sectors are coming up for air, but their reprieve is bound to be short-lived. Or, at least, that’s what the price action suggests. Downtrends are full of sucker bounces peddling false hope. Take bank stocks for instance. Their trend is pointing lower, and this […]

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Options Volatility Watch

Volatility Will Normalize And Here’s How To Profit When It Happens

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 […]

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An Easy Trade To Make Money From Recent Market Turmoil

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 […]

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Futures Trading: Will VIX Term Structure Remain Calm?

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 […]

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A Quick Trade To Profit From This Summer’s Volatility?

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 […]

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Market Volatility: Traders Are Short VIX – Again

Market Volatility: Traders Are Short VIX – Again

In the wake of February’s market volatility induced sell-off that resulted in the implosion of several volatility-based ETFs, I’ve written plenty on the topic. I’ve covered everything from what exactly happened, and the opportunities it presented to basic flaws in VIX related products, to the current SEC investigation as to whether there was market manipulation at work. In the course […]

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Options Trading

Your Questions, My Answers For $7,050 In “Bonus” Monthly Payouts

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 […]

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Options: Short-Term Money-Making Opportunities

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 […]

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Options: How To Buy Them Before They Expire Worthless

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 […]

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Options Trading: 5 Basic Rules Of Thumb

Options Trading: 5 Basic Rules Of Thumb

One of the members of my Options360 service wrote asking whether I had hard rules for managing my options trading. He knows I’m pretty much a stickler for entry points relative to the underlying shares, but when it comes to applying the options strategies, I allow more leeway for flexibility. That, in fact, is one of the […]

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Options Trading: 4 Ways To Protect Your Portfolio

Options Trading: 4 Ways To Protect Your Portfolio

Amidst heavy saber rattling over tariffs and a seeming slowdown in global growth, earnings season is about to kick off. We have big banks such as JPM and BAC reporting on Friday and Netflix set to post results on Monday. This will be the real acid test for the bull market. Will companies post sufficient […]

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Options Trading Basics

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 […]

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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 […]

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Mean Reversion: What Stocks And NFL Teams Have In Common

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 […]

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Key Metrics: Price To Sales Ratio

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 […]

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Option Basics – Debit Spreads

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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