Category: Options Trading Strategies

3 Of This Week’s Best Trades On The Street

| November 1, 2017 | 0 Comments
3 Of This Week’s Best Trades On The Street

Two breakouts and one pullback are waiting for you in the options trading pits With stocks continuing to skirt the stratosphere, finding lucrative opportunities is as easy as falling out of bed. Particularly for those engaged in options trading. If anything, earnings season provides more chances to discover actionable setups due to the elevated volatility. […]

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3 Of The BEST Trades On The Street

| October 25, 2017 | 0 Comments
3 Of The BEST Trades On The Street

Check out these three high-quality chart patterns Equities closed out last week with a bang. The large-cap-laden S&P 500 Index galloped to a new record closing high of $2,575.21. As the bull market beat rolls on, quality chart patterns continue to emerge. Opportunists on the lookout for the best trades each week have been treated to a […]

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2 Option Investments For An Expensive Market

| October 18, 2017 | 0 Comments
2 Option Investments For An Expensive Market

U.S. market valuations have now reached what they were in 1929, and are therefore the second highest in the country’s history. Only the Dotcom Bubble was higher. Currently:  The cyclically-adjusted price-to-earnings (CAPE) ratio of the S&P 500 is over 31. The average S&P 500 price-to-book value is 3.25, compared to only 2.00 in 2012. The […]

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4 Options Trading Strategies For FANG Stocks

| September 29, 2017 | 0 Comments
4 Options Trading Strategies For FANG Stocks

After a period of relative weakness, the FANGs are showing their teeth again No doubt, investors are aware the FANG market barometer has been rather toothless of late. But based on our chart work and using options spreads to improve one’s chances of success, there’s reason to be bullish on Facebook Inc (NASDAQ:FB), Amazon.com, Inc. (NASDAQ:AMZN), Netflix, Inc. (NASDAQ:NFLX) and Alphabet Inc(NASDAQ:GOOGL). […]

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3 Biotech Stocks That Are Just Getting Started

| September 22, 2017 | 0 Comments
3 Biotech Stocks That Are Just Getting Started

The recent dip in biotech stocks is ripe for a few trades The bull market beat rolls on this week with stocks hot right out of the gate Monday morning. While some sectors are pushing into overbought territory, others are just starting to run. Like biotech stocks, for instance. They’ve been leading for months now […]

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3 Stocks To Buy Boasting The Best Setups On The Street

| September 15, 2017 | 0 Comments
3 Stocks To Buy Boasting The Best Setups On The Street

Low-risk entries are beckoning in today’s trio of strong stocks After pausing last week, stocks were poised to jump right out of the gate Monday. And that has me eyeing quality bullish setups for the week ahead. Indeed, that’s always what chart watchers are on the lookout for when seeking stocks to buy. Low risk, […]

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4 Tech Stocks You Should “BITE” Into

4 Tech Stocks You Should “BITE” Into

Forget the FANGs, FAAMGs and other technology acronyms. If you want to profit from tech stocks, take a BITE. The technology world is filled with alphabet soup nowadays. Whether it’s FANG, FAANG, FAAMG or some other bowl, investors like clumping similar groups of tech stocks, typically for their hot performance. I’ve even got my own […]

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3 Energy Stocks Running Headlong Into Resistance

3 Energy Stocks Running Headlong Into Resistance

Low-risk setups are forming for bears in these energy stocks and ETFs Since being left for dead, crude oil has cobbled together quite the respectable rally. At $46.60, black gold has now rallied 11% off its 52-week lows over the past eight trading sessions. Color me impressed, particularly considering how hated oil was. Energy stocks […]

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3 Airline Stocks To Buy Before They Take Off

3 Airline Stocks To Buy Before They Take Off

Buy the dip in DAL, AAL and ALK for sky-high profits Last week’s mild bout of profit-taking was just what the doctor ordered for stocks in need of a breather. And, I might add, the list of overbought stocks needing a reprieve was quite large, what with so many big winners this year. Airline stocks […]

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7 Dogs Of The Dow To Trade Now For Income

7 Dogs Of The Dow To Trade Now For Income

Think the ‘Dogs of the Dow’ strategy is only good once a year? Think again, and check out these seven income-generating trades. The “Dogs of the Dow” investment strategy is typically a year-end/year-beginning phenomenon, but today I want to show you how this income-centric tactic can do wonders for you as we near 2017’s midway […]

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3 Metal Stocks Flashing Bright “Buy” Signals

| January 11, 2017 | 0 Comments
3 Metal Stocks Flashing Bright “Buy” Signals

A trio of solid setups await in the metal space After a short holiday break, the inflation trade is back, baby! Indeed, the turn of the year has been oh-so-helpful in reigniting demand for metal stocks across the board. For proof, look no further than the SPDR S&P Metals & Mining ETF (NYSEARCA:XME), which is […]

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A Guide To Conservative Income Producing Option Strategies For Dividend Stocks

| October 19, 2016 | 0 Comments
A Guide To Conservative Income Producing Option Strategies For Dividend Stocks

With interest rates at their lowest point in history, once safe income-producing assets such as 10- and 30-year Treasury bonds have seen their yields plunge to pitiful rates that are just high enough to keep up with inflation. And while high-quality, dividend growth blue chips such as Pfizer (PFE), Coca-Cola (KO), Procter & Gamble (PG), […]

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The Best Strategies For Binary Trading

The Best Strategies For Binary Trading

Binary options are a relatively new trading method which became popular after its approval by U.S. Securities and Exchange Commission in 2008. Binary options require users to predict the future price movement of an underlying asset and they can gain up to 80% profit based on the outcome of the trade. Users need to choose […]

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3 Safe Trades Leveraging The Market’s Biggest Trends

| June 15, 2016 | 0 Comments
3 Safe Trades Leveraging The Market’s Biggest Trends

While the market tests new highs, some stocks and ETFs seem destined to fall. These three contrarian plays make great trades right now, and could be some of your most profitable moves for all of 2016. Changes are coming in three major areas of the market, and being on the right side of these trends […]

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5 High Probability Options Trades For May

5 High Probability Options Trades For May

When I first started trading, I ignored the Dow Jones Industrial Average and its ETFs (DIA) because – after all – why would I limit myself to the 30 most popular stocks? But now, as an options trader, I find myself almost limited to those stocks that are most liquid. Because of this, I’ve looked […]

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3 Strategies For Shorting The Bursting Biotech Bubble

3 Strategies For Shorting The Bursting Biotech Bubble

Follow any of these three easy to understand, step-by-step strategies that detail exactly how any investor can profit from the collapse in biotech.  The biotech sector is a bursting bubble. Unfortunately, making money from a bursting bubble requires investors to go short on a stock. Shorting a stock exposes an investor to a theoretically infinite […]

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2 Options Strategies For Profits From A Hated Sector

2 Options Strategies For Profits From A Hated Sector

In response to a recent article I wrote on the Gold Trust ETF (GLD) some readers have asked my thoughts on gold miners. While my last article was more of a bullish thesis on gold from a fundamental perspective and offered a simple strategy of playing gold by buying GLD, this article on the Market […]

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Options Trading Strategies After The Fed Meeting

| December 18, 2015 | 0 Comments
Options Trading Strategies After The Fed Meeting

Options Trading Strategies After The Fed Meeting Well, we can pretty much shut down for the year now, right?  Arguably the biggest event of the year has come and gone, and it’s time for holiday vacation.  No, I’m not talking about the release of the new Star Wars movie, although that’s certainly a huge deal […]

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Options Trading Strategies For Oil

| December 11, 2015 | 0 Comments
Options Trading Strategies For Oil

Options Trading Strategies For Oil If you’ve been following the financial news lately, you’ve likely seen a lot of talk about oil.  This time however, it’s not because the price of crude is skyrocketing.  Instead, it’s because oil’s price per barrel has hit multi-year lows. In fact, West Texas Crude Oil is at the lowest […]

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Options Trading Strategies To Avoid For 2016

| December 4, 2015 | 0 Comments
Options Trading Strategies To Avoid For 2016

Options Trading Strategies To Avoid For 2016 Hard to believe but 2016 is right around the corner.  While the financial markets don’t really care what calendar year it is, we as investors tend to like to group market conditions by the year. For instance, 2015 will most likely be the year of tepid growth and […]

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Options Trading And The New Normal

| November 27, 2015 | 1 Comment
Options Trading And The New Normal

Options Trading And The New Normal As we approach the end of the year, we can start to piece together what kind of year it’s been for US stocks.  There are basically two different stories to tell in 2015. There was the August correction and subsequent rebound.  And, there’s been a whole bunch of range-bound […]

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Options Trading For The Holiday Season

| November 20, 2015 | 0 Comments
Options Trading For The Holiday Season

Options Trading For The Holiday Season It’s just a week away from Thanksgiving… hard to believe.  The unseasonably warm weather could be making us forget just how close the holidays are.  We’re that much closer to prime shopping season. The holiday shopping season is closely monitored by the investment world as well.  Many companies make […]

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Finding Value With Options Trading

| November 13, 2015 | 0 Comments
Finding Value With Options Trading

Finding Value With Options Trading There are many different reasons to invest in stocks.  For example, some buyers are looking for growth, others income.  Ultimately everyone is looking to make money… but how we get there is clearly open to interpretation. One popular method of investing is value investing.  That is, when investors look for […]

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Trading $NFLX Options

| October 16, 2015 | 0 Comments
Trading $NFLX Options

Trading $NFLX Options Typically, I like to write about general strategies for trading options.  I’ll choose some overarching topic, like using options to trade earnings, and write about broad-based strategies for doing so.  In something of a change for me, I’ve decided to start writing more often about trading options on specific stocks. There’s growing […]

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Options Trading Strategies For Earnings Season

| October 9, 2015 | 0 Comments
Options Trading Strategies For Earnings Season

Options Trading Strategies For Earnings Season Earnings season is once again upon us, creating opportunities for both large gains and large losses.  As a rule of thumb, individual stocks tend to react more significantly during earnings periods than other times of the year. The problem is figuring out which way a stock is going to […]

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Options Trading Strategies When Your Stock Is Down 5%

| October 2, 2015 | 0 Comments
Options Trading Strategies When Your Stock Is Down 5%

Options Trading Strategies When Your Stock Is Down 5% Market volatility has picked up considerably since the stock correction from late August.  The VIX, a popular method of measuring market volatility, has been trading above 20 for well over a month.  In comparison, the 200-day moving average is around 16. We’re essentially seeing volatility levels […]

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Using The Option Straddle

| February 6, 2015 | 0 Comments
Using The Option Straddle

Using The Option Straddle Every earnings season I get questions about what option strategy to use. I hear things like, “What’s the best strategy to use to play earnings?” or “How do I use options to make money on earnings?” With options, there are always several right answers. However, for new traders, I usually recommend […]

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Should You Be Trading VXX?

| January 30, 2015 | 1 Comment
Should You Be Trading VXX?

One of the primary themes I like to discuss on this site is volatility. After all, you shouldn’t be trading options if you don’t at least have a basic understanding of why volatility is important to the financial markets.

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Reverse Iron Butterfly Spread

| April 20, 2012 | 3 Comments
Reverse Iron Butterfly Spread

The reverse iron butterfly spread is a complex, debit spread strategy which benefits from movement in the underlying instrument.  It’s similar in concept to a short butterfly spread, except it’s a debit spread.  A trader profits from a reverse iron butterfly spread when the underlying stock rallies or sells off. A reverse iron butterfly spread […]

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Short Condor Spread

| April 19, 2012 | 0 Comments
Short Condor Spread

The short condor spread is a complex credit spread strategy which benefits from movement in the underlying instrument.  A trader profits from a short condor spread when the underlying stock rallies or sells off. A short condor spread is made up of four options trades at once.  It can be done with either all calls […]

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Short Straddle

| April 18, 2012 | 0 Comments
Short Straddle

A Short Straddle is a neutral options strategy which produces a profit when the underlying stock doesn’t move much up or down.  It’s essentially the opposite of a Long Straddle which profits when the underlying stock makes a big move up or down. So, if you think your stock is going to move sideways for […]

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Long Straddle

| April 16, 2012 | 0 Comments
Long Straddle

A Long Straddle is created by buying both a put and a call with the same terms.  In other words, you buy both a put and a call on the same underlying stock, with the same strike price, and the same expiration date. A straddle purchase allows the buyer to make big potential profits if […]

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Iron Butterfly Spread

| April 12, 2012 | 0 Comments
Iron Butterfly Spread

The iron butterfly spread is a complex, neutral, credit spread strategy, similar to a long butterfly spread.  A trader profits from an iron butterfly spread when the underlying stock is stagnant or trades in a tight price range over the life of the spread. An iron butterfly spread is made up of four options trades […]

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Delta Neutral Trading

| April 10, 2012 | 0 Comments
Delta Neutral Trading

A delta neutral position is when two or more positions are used to establish a neutral market position.  A trader can apply a delta neutral position with stock and one or more options, OR two or more different options.  Whatever combination of securities used, the delta of the two securities offset each other so the […]

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Debit Spread

| April 5, 2012 | 0 Comments
Debit Spread

Debit spread is a term used to describe the direction cash flows when executing a spread trade. When the simultaneous buying and selling of options results in a cash outflow (debit) from your account it is called a debit spread.  In other words, the options you buy cost more than the options you sell. There […]

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Credit Spread

| April 3, 2012 | 0 Comments
Credit Spread

Credit spread is a term used to describe the direction cash flows when executing a spread trade. When the simultaneous buying and selling of options results in a cash inflow (credit) to your account, it is a called a credit spread.  In other words, the options you buy cost less than the options you sell. […]

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Buying Put Options, Buy Put Options, Long Put Option

| March 30, 2012 | 0 Comments
Buying Put Options, Buy Put Options, Long Put Option

Put buying is the opposite of buying a call. Here’s how it works… Buying a put is an option to sell a particular stock at a certain price for a limited period of time.  It’s a bearish position.  A put option increases in value as the price of the underlying stock goes down. There are […]

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Buying Call Options, Buy Call Options, Long Call Options

| March 28, 2012
Buying Call Options, Buy Call Options, Long Call Options

Call buying is the simplest and most common type of option investment. Here’s how it works… Buying a call is an option to buy a particular stock at a certain price for a limited period of time.  It’s a bullish position.  A call option increases in value as the price of the underlying stock goes […]

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Butterfly Spread

| March 26, 2012 | 0 Comments
Butterfly Spread

The butterfly spread is a neutral options strategy, also called the long butterfly spread.  A trader profits from a butterfly spread when the underlying stock is stagnant or trades in a tight price range over the life of the spread. A butterfly spread is made up of three options trades at once.  It can be […]

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Bullish Strategies, Bearish Strategies, Delta Neutral Strategies, Market Neutral Strategies

| March 22, 2012 | 0 Comments
Bullish Strategies, Bearish Strategies, Delta Neutral Strategies, Market Neutral Strategies

In this article, we’re going to take a look at four distinct options strategies.  We’ll cover bullish strategies, bearish strategies, delta neutral strategies, and market neutral strategies. Let’s get started… Bullish Option Strategies are used if you are of the opinion an asset will go up.  For example, if you think McDonalds (MCD) stock will […]

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Bear Call Spread

| March 20, 2012 | 0 Comments
Bear Call Spread

A bear call spread is a bearish options strategy.  You would use it only if you expect the underlying stock will drop in price. In a bear call spread, you buy a call option at a certain strike price and sell a call at a lower strike price.  Since a call with a lower strike […]

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Strangle Option Strategy

| February 28, 2012 | 0 Comments
Strangle Option Strategy

A strangle position is an options position created with puts and calls. Simply.. this position is a purchase of a call option and a purchase of a put option out-of-money around the current price on the underlying stock price. Here’s the thing… a long strangle is profitable with either a large move in volatility or […]

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Naked Put Writing

| December 8, 2011 | 0 Comments
Naked Put Writing

Writing uncovered puts is an advanced options strategy.  It  involves selling put options without owning any shares of the underlying stock. Like with any option selling… you collect a premium, putting money in your pocket. However, it’s important to remember when selling any options without their underlying stock positions, your losses are not limited. However, […]

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Naked Call Writing

| December 8, 2011 | 0 Comments
Naked Call Writing

First and foremost… naked call writing is the most dangerous strategy in the options market.  It leaves you (the seller) open to unlimited exposure. To begin… what’s a naked call option. In brief… A naked call option is an option that’s sold for a premium without owning the underlying security.  So, a naked call writing […]

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Covered Put Writing

| December 8, 2011 | 0 Comments
Covered Put Writing

To no surprise, a covered put is the exact opposite of a covered call. A covered call is the purchase of stock and the sale of a call option.  A covered put is the sale of stock (short stock) with the sale of a put option. Why would you put this type of position on? […]

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Covered Calls

| December 8, 2011 | 5 Comments
Covered Calls

Covered calls are involved in a strategy that combines a long stock position and a short call option. The call options are sold in equal amounts against the long underlying shares.  The strike price and expiration date of the calls can be chosen based on investment objective, market view and risk appetite. When you write […]

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Collar Position

| December 8, 2011 | 0 Comments
Collar Position

A collar position is a unique strategy.   It’s usually used with a long stock position to prevent risk over a certain time frame.  The collar is basically a covered call position with an extra long put. Take a quick look… You own 100 shares of Microsoft at $25 a share, and all of a sudden […]

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Calendar Call Spread

| December 8, 2011 | 0 Comments
Calendar Call Spread

Calendar call spreads, also known as long time spreads are advanced option strategies. This strategy involves buying a calls or put options.  It’s established by selling one option at a specific strike and month.  And buying another option with the same strike, but with a longer dated expiration month. It’s not as complicated as it […]

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