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Derivatives: A Survival Guide (NASDAQ)

Written by Greg Jensen on . Posted in News and Events

By Greg Jensen

I would wager that before 2007 most mainstream investors had not even heard the word “derivative” other than as a dismissive description of a song or movie. During the financial crisis, however, the word was everywhere, usually with scare quotes. There were articles, seemingly every day, claiming that derivatives were the problem. They were bad things, designed to take investor’s money away and further enrich the fat cats on Wall Street. They were inherently flawed and always had been doomed. They should be banned. Market insiders put on their “wry smile” face and muttered “This too shall pass…” to themselves. Overreaction usually looks ridiculous with hindsight.

2 catalysts could boost Arena before 2013

Written by Greg Jensen on . Posted in News and Events

After FDA approval of its obesity drug, the biotech now awaits a DEA letter and the final decision from the EMA.

Pharmaceuticals continue to be a strong point for the health care sector. Since the approval of its the obesity drug Belviq, Arena Pharmaceuticals (ARNA -0.60%) shares have lived up to the saying “Buy the hype and sell the news.”

Leading up to the Food and Drug Administration’s first OK for a weight-loss drug in a lucky 13-years, the small-cap biotech’s stock moved from $2 in May to an intraday high of $13.50 on June 27, the day of the approval.

Since then, shares have fallen and traded as low as $6.95 in early August. Today, shares stand a little taller than $9. The whipsaw action could leave shareholders bit confused about what to do next.

The good news for investors is that Arena has a few catalysts that could drive the stock higher in the next 90-days.

Continue Reading on MSN Money…..

Apple’s Push to $800

Written by Greg Jensen on . Posted in News and Events

Apple’s (AAPL) stock has been on fire the last couple of weeks, moving from $500 to $600.  The product release was as expected, iPad with improvements. Right? The excitement that surrounds new product release events for AAPL is historic dating back to its first release of the Macintosh.   So why does the idea of investing in this stock during this move feel like I am chasing?

Even as I am still long AAPL, the idea of hanging on to my bullish position feels like I should be taking profits, yet the stock continues to power higher.  The market as a whole feels overbought.  The situation in Europe looks to be pacified for now.  Right? These types of concerns often plague investors and cause them to make poor investing decisions because they are relying on hunches and feelings to make investment decisions.  This is a common mistake, but a costly mistake that many investors starting their investing journey make.

Use Options to Ease the Pain of Rising Gas Prices

Written by Greg Jensen on . Posted in News and Events

Will increased gas prices turn 2012’s bullish run into another 2011?

The market continues to creep higher in 2012 in spite of news-driven headwinds. It feels refreshing, yet something feels amiss.

There have been several comparisons over the past few weeks to last year’s rally. The year 2011 started off very strong with the S&P moving from 1257 at the start of the year to 1370 by May 2. This year has seen the S&P move from 1257 (eerily the same number) to a high on Friday of 1374. The fearful comparisons being drawn are what happened to the S&P from May 2 until Oct 4. This time period saw the overall market average drop 21.6% to 1074.

Greek Debt Default: Nominated for Best Drama

Written by Greg Jensen on . Posted in News and Events

The story of the woes in Europe has seemed like one of those awful movies that gets nominated for best picture.

I am not insinuating that the Academy members pick awful movies, but rather that the storylines of many Academy Award-nominated films are not always cheerful.

The hero is facing insurmountable odds; you rally behind her, and then watch her fall and hit a stool and end up getting a mercy killing from none other than her trainer and father figure Clint Eastwood. Whether Greece is Jack Nicholson in “One Flew over the Cuckoo’s Nest,” Hillary Swank in “Million Dollar Baby” or Jim Carrey in “Dumb and Dumber” remains to be seen.

Greece’s storyline continues to look about as unreal as a Hollywood movie.

We keep seeing numbers that can’t be real…right? Then again those numbers have proven to be real.

OptionsANIMAL’s Insight on Implied Volatility, Sports, Apple, and Facebook

Written by Greg Jensen on . Posted in News and Events

If you’ve been following the media this past week, you would think the only thing happening is that the New York Knicks got a new all-star caliber point guard in Jeremy Lin.  The Harvard grad, who currently, is even more popular than that other Harvard guy who is planning on taking his social site public in a few months, has burst onto the basketball scene.  This has been heaven sent manna for New York Knicks fans who have watched their shares of The Madison Square Garden Company (MSG) pop 14.5% this month since Lin has taken over point guard duties.  Hey, in the pro sports world, anything is possible.  Maybe even a Cubs world series…

Crickets…

Sorry, I got distracted in the abyss of the idea of a Cubs World Series and forgot about the other all-star that had an interesting week.  I am not talking sports anymore. I’m talking about the market.  The market had another solid week and the all-star stock that had an up and down week was none other than the brain child of the late Steve Jobs, Apple Inc. (AAPL)  The rumors that swirled this week were nothing short of awesome as AAPL stock saw HUGE volatility in the 5 trading sessions.

Learn About Option Pricing

Written by Greg Jensen on . Posted in News and Events

By Greg Jensen
OptionsANIMAL CEO and Founder

The Greece situation is resolved right?  The market is headed higher right?

The VIX says the market is bullish, then another shoe drops and the market drops along with it.  Trading this market can be difficult in the good times and impossible in hard times.  The key to successfully trading this market is to have a sound understanding of options. Once you have an option position in place, whether it includes calls or puts, there are a few mains things that affect options pricing; stock price, time remaining in the option, implied volatility, risk free interest and dividends. These factors can seem very complicated at first. This is especially true when you look at the relationship between options pricing and the Black-Scholles model.  However, if you look at these factors from a simple perspective, it can help you understand the basis behind the option instruments, which in turn will help you be a better trader.

Collar Trade with A Dynamic Twist

Written by Greg Jensen on . Posted in News and Events

By Greg Jensen
OptionsANIMAL CEO & Founder

If you’ve ever traded options, you’ve probably heard of the Collar Trade. The standard collar trade is a great way to protect your investments in an unsure market. But what if you could make 25-30% more without taking on any additional risk? You can.

Why Change the Standard Collar Trade?

The problem with the standard collar trade strategy is that it lacks big upside profit potential. The Dynamic Collar Trade protects your trades just as much as a standard collar trade, but it also lets you take part in bullish underlying moves and offers potential returns of 25-30 percent — roughly four times as large as a standard collar (6-8 percent).

Option Credit Spread Strategy: An Opportunity For Success

Written by Greg Jensen on . Posted in News and Events

By Greg Jensen
Founder and CEO, OptionsANIMAL

Every trade has a personality. Every trade represents an opportunity for success and an opportunity for failure. The choices you make about what, when, and how much define your success. You make those choices based on the personality of the particular trade. Options are perhaps the most personality driven of all trading instruments.

Understanding the different strategies available for use in options trading is like a golfer understanding the different clubs in his/her bag. A driver in a very useful club, but should not be used in every situation on the golf course. It is awfully hard to putt with your driver. It is equally as hard to chip out of the sand with a putter. Let us look at a pretty common personality for options—a bullish credit spread—and how that personality should be played in the market: just like the right club should be played on the golf course.

A bullish credit spread should not be used in every scenario in the market. It is important for you, as a trader, to know the different trading tools available for any market scenario. Meet a bullish credit spread here, and understand its personality.