Tag: put options
The Many Uses Of Option Delta
In an option chain, the delta for a given option strike price can vary from -1 to +1. Call options have a positive delta for option buyers somewhere between 0 and +1. Calls increase in value when the underlying increases in value. Put options have a negative delta somewhere between 0 and -1 as Put […]
Using Options To Protect Gains While Maintaining Upside Potential
The stock market is hitting all-time highs and investors are torn between the possibility of an economic downturn, or entering a new leg of the bull market. Last week’s article noted that money managers were increasingly using call options to gain additional exposure to the stock market. Some of this behavior might be deemed as a reckless […]
3 Stocks To Buy Following Great Earnings
These stocks should keep winning after their impressive reports For many companies, nothing is more important than the quarterly earnings report. Disappoint the masses, and you suffer. Impress them, and you score instant gains. Amazon (NASDAQ:AMZN) was the ultimate example of the latter this season. Months of profits were jammed into a single overnight session. So today, […]
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 […]
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? […]
3 Stocks That Look Like Death
These stocks have been poison to portfolios. Sell them The flurry of new highs notched by the S&P 500 is perhaps the clearest evidence of the decade-long golden age stocks we’ve been living in. Since the disastrous days of ’08 and bottom carved in the Spring of ’09, equities have grown 343%. But not all companies have […]
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 […]
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 […]
Investing Advice: How To Safely Short A Stock
Over the years, Tesla (TSLA) has been a bit of a widow maker to short sellers. The stock has gained over 300 percent since 2013. But even as the price rose, or probably because it rose, the short position continued to increase. It is now one of most heavily shorted stocks out there, with over 25% of the float […]
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 […]
How To Make $5,094 A Month Without Buying Stocks
Today I’m going to show you a proven way to collect $5,094 in cash, on average, every month—without buying a single stock, bond or fund. In fact, you won’t have to buy anything at all. (I’ll show you precisely how this works in a moment.) That amounts to a nice $61,000-a-year income stream, easily enough for you […]
Look For Some Options Plays To Make Money In Today’s Market
I have to admit, I’ve been a bit ambivalent about this market. On one hand, there’s every reason to expect a frustrating period of consolidation to continue. In other words, the S&P will just keep moving up and down with no conviction. The reason, short-term momentum on the S&P 500 remains tied to the flurry […]
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 […]
Frontline Options (FRO): Unusual Trading Activity
Options in beleaguered oil shipper Frontline experienced quite a bit of unusual volume during Friday afternoon’s trading session. With Frontline trading Friday mid-day around $7.49 a share, option volume unexpectedly exploded. Overall option volume showed 23,000 contracts traded hands. That was nearly 12 1/2 times the normal daily option volume, with most of the volume on […]
