Options Trading Strategy

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, […]

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Options Trading: From Weed Killer To Profit Tiller

Options Trading: From Weed Killer To Profit Tiller

As laws regarding recreational marijuana continue to loosen restrictions and expand applications, many traditional ‘vice’ companies such as alcohol and tobacco are looking to get in on what is expected to be a $300 billion business by 2025. As we’re about to see, this process creates some lucrative options trading opportunities. Most recently, we saw Constellation […]

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Options Trading: A Golden Opportunity

Options Trading: A Golden Opportunity

When I first started publishing options trading articles online in 2002, I quickly learned that if you wanted to get feedback, write something negative about gold. People will really bug out. At the time, gold was trading around below $400 an ounce and I thought that was too high.  It of course proceeded to have […]

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How To Make A 186% Return On Video Games

How To Make A 186% Return On Video Games

Typically, when growth in the video game industry is discussed, it’s all about mobile gaming growth. After all, playing games on smartphones and tablets has been where most of the action has been in recent years, at least in terms of investing. While casual gamers may still be driving plenty of business in mobile gaming, […]

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Is The Housing Market About To Hit A Top?

Is The Housing Market About To Hit A Top?

I don’t spend a lot of time writing about real estate in this space. It’s not that it isn’t important, in fact it’s quite the opposite. Of all the sectors most impacted by a change in interest rates, real estate is at the top of the list. However, I just don’t find real estate that […]

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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

Kroger Stock: The Panic Selloff Is An Opportunity

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 […]

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Don’t Be Scared Out Of Netflix — It Will Steal The Show Again

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 […]

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The Market Is Wrong — Salesforce Stock Is Headed Higher

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 […]

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Apple Stock Is Ripe For The Picking

Apple Stock Is Ripe For The Picking

This AAPL bull call has BIG profit potential The eclipsing of a $1 trillion market cap has done little to deter hungry buyers from gobbling up Apple (NASDAQ:AAPL) shares. The tech titan is up 13% in the last month and shows few signs of slowing down. With momentum beneath its wings and a shallow pullback now formed, […]

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Alibaba Stock Is A Steal Before Earnings

Alibaba Stock Is A Steal Before Earnings

Beaten down by U.S.-China trade war rhetoric, buy BABA stock before it soars on earnings It’s time for another earnings report from Chinese ecommerce behemoth Alibaba (NYSE:BABA). The company steps into the earnings fray next week, and BABA stock finds itself once again trading at multi-month lows. And, once again, this is a bullish opportunity […]

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Options Volatility Watch

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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Betting On The Market Not Moving?

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 […]

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Make Money While Waiting For Volatility To Fall

Make Money While Waiting For Volatility To Fall

For the last several weeks, every time it seemed the market was ready to rally, something happened to send it back down. The biggest concerns lately centered on the potential trade war brewing between China and the U.S. It appears that most companies have no desire to get involved with a battle of escalting tariffs. […]

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Options Trading

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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Recession Prediction: Is Call Buying A Warning?

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, […]

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Options, Hurricanes And Hedging

Options, Hurricanes And Hedging

We always look at our investment process and ask ourselves, “What can we do better?” How can we increase returns and lower risk? We think we have found a new, sensible way to do both. We can hedge a portion of our market exposure with put options. Put options are contracts that trade on an […]

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Options Trading Basics

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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Option Basics – The Greeks

Option Basics – The Greeks

It’s time for the second installment in our option basics tutorial series. Today we are going to cover the option greeks – which is commonly considered a dry topic. Well that was until now –  so grab a short sword and a bottle of body oil because you’re going to need it down in the dusty arena when […]

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