Options Trading
Short This Overvalued Stock About To Fall
As investors, we have many tools of the trade at our disposal. Unfortunately, we are self-absorbed in a way: we believe that we have special knowledge unavailable to other investors. Whether you’re an industry insider or a discerning consumer, there are millions of others like you. This is why I like to turn to novel […]
Investing In Options: Put Time On Your Side
As you know, there are four major variables in determining an option’s price – stock price, strike price, time, and volatility. One of the most puzzling aspects of option trading for new option traders is time value premium decay. For instance, I’ve heard from many novice option traders who were shocked to see the value […]
3 Retail Stocks With Low-Risk Strategies
Out of the all the retail stocks to choose from, we have boiled down three low-risk strategies that dig out the very best options for sustained growth. With decades of continued growth in the consumer economy, you will want to be invested in these stocks. Recently I was asked by a student as to which […]
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 […]
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 […]
Option Greeks
Option Greeks are metrics used to more precisely understand the behavior of an option’s price. In a nutshell, they measure the sensitivity of an option’s price in relation to several different factors. Those factors include underlying stock price, interest rate, volatility, and time decay. Traders use Option Greeks to analyze changes in the price of […]
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 […]
Stock Option Pricing
For most investors, understanding stock option pricing can be elusive and intimidating. While it may seem like there are many variables that go into stock option pricing, the reality is there are two parts that make up the value. Moreover, there are three distinct variables affecting an option’s price. Before we get too far along, […]
Stocks Riskier Than Options Trading?
Trading Stocks Can Be Riskier Than Trading Options There are many significant risks unique to holders and writers of options. For example, an option holder can lose their entire investment in an option if they allow it to expire worthless. The writer of naked call options risks potentially unlimited losses should the price of the […]
Stock Repair Strategy
You did your homework, picked a great stock, totally undervalued and ready for a nice price rise. However, after you bought the stock, the damn thing goes and drops 20%. So what do you do now? Do you sell it and cut your losses or do you hold on and hope that it recovers? Do […]
