Options Trading Strategy
Options Trading: This Stock Is Ready For A Short Squeeze
Earlier this week I highlighted how bears were making money shorting stocks. But short selling can be a dangerous game, as you’re always at risk of a short squeeze inflicting large losses. A short squeeze happens when a stock has a large portion of its float sold short. Remember, every share sold short is like an […]
Options Trading: Is This The Ideal Environment For Calendar Spreads?
In my trading, I usually establish positions with directional bias through the purchase of puts or calls. This can provide the most leverage and biggest bang for your buck. That is assuming the move you predicted happens in a relatively short time and in a pretty orderly fashion. But as we discussed last Monday, the market seems […]
Options Trading: The Right Time For Buy-Write
With the major indices pushing to all-time highs, and some of the many names sitting large double digit percentage, it can be difficult not only holding on, but climbing aboard even the bluest chip names like Amazon (AMZN) and Microsoft (MSFT) at this stage. Fortunately, there’s an options trading strategy that can help you overcome this problem. One way […]
An Interesting Trade For Easy Money From Emerging Market Bonds
Investing, particularly long-term investing, has changed quite a bit since the early days of portfolio theory. It used to be investors split their holdings between stocks and bonds, with the stocks diversified by industry or sector. Bonds tended to be confined to medium or long-term Treasuries. These days, ETFs have changed the way investors are […]
![SPDR ETFs: This Group Is Down 12% In 2018 [DETAILS]](http://optionstradingresearch.com/wp-content/uploads/2018/09/spdr-etfs-150x150.png "SPDR ETFs: This Group Is Down 12% In 2018 [DETAILS]")
SPDR ETFs: This Group Is Down 12% In 2018 [DETAILS]
After being one of the best performing sectors in 2017, homebuilders have been pretty shabby in 2018. As measured by the SPDR Homebuilder ETF (XHB), the group is down some 12% year to date. And because that ETF includes some companies that are only tangentially housing related such as Home Depot (HD) and William Sonoma (WMS) which has done quite well, […]
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
Constellation Brands Stock Is Rallying … More Gains Ahead
STZ stock has even greener days ahead. It has some redemption levels to hit from June. Constellation Brands (NYSE:STZ) reported earnings this morning and Wall Street liked what it’s saw. The company beat on the top and bottom lines and raised guidance. The stock is rallying 4% on the headline. The stock market in general is […]
Under Armour Stock Is Sprinting Higher — Trade The Breakout
It’s time to bet bullish on UAA stock ahead of next month’s quarterly earnings report Under Armour (NYSE:UAA) is about to sprint higher. Consumer-facing markets, like athletic apparel makers are benefiting from a strengthening U.S. economy. Both Lululemon Athletica (NASDAQ:LULU) and Nike (NYSE:NKE) have already reaped rewards from that strength in their quarterly reports. Next month, UAA stock will follow […]
Kroger Stock: The Panic Selloff Is An Opportunity
Sellers are wrong to flee Kroger stock, as one report doesn’t break the whole story This morning Kroger (NYSE:KR) is falling 8% on its earnings report. Management hit most of its metrics except there were concerns over its top line and margin. Guidance was also disappointing. It is my opinion that this is an overreaction that is […]
Don’t Be Scared Out Of Netflix — It Will Steal The Show Again
The NFLX naysayers are wrong — this stock is still healthy and has better days ahead In spite of all the headline risks that looms over the stock market this year, the indices made new highs … but there have been a few exceptions, and Netflix (NASDAQ:NFLX) is one of them. This is a momentum stock, which […]
The Market Is Wrong — Salesforce Stock Is Headed Higher
Soft guidance on profitability is not a worry for the hyper-growth Salesforce In spite of worries over global tariff wars, the stock market made new highs this week. Momentum stocks are soaring and, most notably, Amazon (NASDAQ:AMZN) recently crossed $2000 per share. This morning, Salesforce (NYSE:CRM) is going the wrong way — down 3% — as knee-jerk […]
Options Volatility Watch
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 […]
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 […]
Betting On The Market Not Moving?
The last several weeks have been interesting for stocks to say the least. We simply are not used to the volatility – the daily swings – we’ve been getting nearly every trading day. It’s been years since we’ve had anything close to market conditions like this. Moreover, volatility indicators have remained high but stable throughout […]
Options Trading
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: 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 […]
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 […]
Recession Prediction: Is Call Buying A Warning?
Going by the reaction in China, you would’ve thought global markets were in for a thrashing after President Donald Trump’s latest belligerence on trade. And while a few cracks widened, in the end it was another muffled reaction in U.S. stocks. Any immediate recession prediction has yet to bear fruit. For the S&P 500 Index, […]
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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