Options Trading Strategy
The Latest Cold Front Is Heating Up Natural Gas Options
It’s always funny to read about energy prices going up whenever there’s a cold front. It’s like people forget that there’s such thing as weather and (depending on where you live) it changes with the seasons. As the temperature starts cooling in the fall, you’ll often see headlines like “Heating Oil Prices Up on Colder […]
Gold Prices Could Be Headed Much Higher
Although the stock market has had its share of ups and downs over the last couple of months, the price of gold has been surprisingly stable. In August, the gold futures reached $1,500 an ounce. Fast forward to mid-October, and futures are still right around that $1,500 level. Why have gold prices remained elevated despite […]
What’s In Store For Oil Now That Half Of Saudi Arabia’s Production Is Offline?
This week was supposed to be all about the Fed meeting. The September FOMC meeting is the first since July, and quite a bit is riding on what the Fed decides to do with interest rates. It’s one of the most critical FOMC meetings we’ve seen in years. However, the Fed’s thunder was stolen by […]
Find Out: A Bearish Trading Opportunity In A Cloud-Based Software Company
Atlassian Corporation (TEAM) was one of the hottest company’s in terms of its growth and stock price. But now, it looks like it’s losing steam and breaking down, setting it up for a bearish trade. Atlassian Corporation Plc – Class A Ordinary Shares (TEAM) is a cloud-based software company which provides a variety of tools for content […]
What Does The Options Market Say About Interest Rates?
Why are investors so fixated on interest rates? If you follow the financial markets regularly, you’ll notice how laser-focused the investment community is on what the Federal Reserve is doing, how bond markets react, and what it all means for interest rates. But why are interest rates so important? What does a change of a […]
Covered Call Writing
Understanding A Covered Call Strategy
The other day, I wrote about how people are piling into funds, then employ option premium-selling strategies, particularly covered calls or buy-writes. I figure it’s a good time to drill down into exactly what these strategies entail and highlight both the pros and cons. The covered call strategy is one of the most popular options strategies especially among investors that […]
How To Get Paid An Income By Avid Coffee Drinkers
Coffee is one of those consumable goods that you simply don’t want to mess with. The country may fall into a deep recession. The ocean may rise to levels that engulf the coastlines. A meteor at this moment may be hurtling towards Earth. And yet, it won’t stop coffee drinkers from going to buy their […]
Are Tech Stocks Going To New Highs By Year-End?
The funny thing about stocks this year is that it feels like we’re having a rough year. The last few months have brought quite a bit of volatility to the market, and with it comes the feeling that the stock market is struggling. However, looking at the numbers, you may be amazed to see the […]
Are Bonds Going To Continue To Be The Hottest Asset Class?
The stock market has been plenty volatile over the last couple weeks, but the real story has been what’s going on in the bond market. Many of the financial headlines you see are about the inverted yield curve or the parabolic move in US bonds. Let’s start with the inverted yield curve. What does that […]
Generating Income And Protecting Yourself During A Market Selloff
Investors have finally cracked under the pressure of the trade war with China. Stocks, which were at all-time highs just two weeks ago, are now 6% off those highs as of this writing. Although the S&P 500 is still up 13% year-to-date, Monday’s 3% drop set the alert level to red. Meanwhile, safe-haven investments like […]
Options Trading Strategies
3 Stocks Roaring Higher After Earnings
Earnings is fueling these stocks higher. Buy them. Traders love earnings season because it reignites flagging trends or sparks new ones. And that can create some compelling and actionable trade ideas. Today we’ll look at three stocks to buy that are pushing higher on better-than-expected earnings. They all hail from the technology sector, which has […]
3 Bank Stocks To Buy After Earnings
Consider these options cash flow strategies in JPM, BAC and C stock Earnings season is upon us, and as usual, bank stocks led the way. If you couldn’t tell by this week’s rally in the S&P 500, the market cheered the results. With the recent gains, more upside could be on the way. Today, we’ll look […]
3 Strong Stocks To Buy
Ignore the messy market and buy these market leaders The ranks of strong stocks are dwindling. But there are still a few diamonds in the rough that belong atop any stocks to buy list. But first, some context is in order. So far, October is living up to its bad reputation. It’s not only the […]
3 Bull Flag Stocks To Buy
The bulls’ banner waves in these three stocks. Buy them. The drama unfolding in Washington has turned the uncertainty dial up to 11. But many stocks are staying above the noise and actually offer compelling setups ahead of the weekend. Today we’ll look at three of the best stocks to buy. Wednesday’s rally was important. […]
3 Stocks To Buy After The Fed Meeting
These three stocks are breaking out RIGHT NOW The Fed Meeting is over and the market uptrend remains intact. Here’s the key takeaway: bulls should celebrate and traders have a green light for finding stocks to buy. Wednesday’s decision to cut the Fed’s target rate by a quarter-point arrived as expected. While some may quibble […]
Options Volatility Watch
Are We Headed Back To A Low Volatility Market?
Both 2018 and 2019 have been characterized by periods of choppy markets and higher volatility. It’s been quite the change of pace from 2017, where it seemed like we would never experience market volatility ever again. Of course, nearly everything in the financial markets moves in cycles. Low periods of volatility will inevitably be followed […]
Is Volatility Going To Continue To Plummet This Summer?
July is traditionally a very slow month for the financial markets. Not only is it the prime vacation month for families (most kids go back to school in August), but there’s also the July 4th holiday week. Generally speaking, investors and traders are often far away from the markets at this time of year. Even in […]
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 […]
Options Trading
Earnings Season: What To Know Right Now Before Making A Trade
It’s that time of year again: earnings season. Things will officially kick off next week when big banks such as Bank America (BAC) and JP Morgan (JPM) report Monday and Tuesday, and then move into some big tech such as Netflix (NFLX) and IBM (IBM) on Wednesday afternoon. After a few months of being waffled and swayed by political trade […]
Is It Time To Start Buying Options Instead Of Selling Them?
In a world of ultra-low interest rates, it seems every investor is searching for yield. Of course, that should come as no surprise when 10-year notes are yielding something like 1.6%. A yield like that is certainly not going to fund most people’s retirement! Given the yield of government bonds, it’s also no wonder that […]
The One Rule You Must Follow When Trading Options
When people talk about options trading, the conversation often turns to ultra-risky strategies like buying a call or put options — ahead of an earnings number in the hope of being on the right side. The upside in getting lucky on such an unpredictable event is a big, fat profit. The downside when you’re wrong? […]
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 Basics
The Relationship Between Volatility & Vega
Market volatility is starting to tick back up as macro headlines ranging from inverted yield curve to drones striking Saudi oil complexes to impeachment to failed IPOs have ratcheted up uncertainty and nervousness. And now we are about to enter earnings season which not only will cause big moves in the individual names but could […]
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 […]
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