How NOT To Get Hurt With Options
Options can be used to provide extra income, allow you to profit in every different market trend, and protect the money you already have. Options can be used to smooth out your returns, protect you in a down market and insure against the risk of catastrophic loss in your portfolio. With all these amazing abilities,…
Read MoreBeware The Corporate Buyback
As I pen this blog, the S&P 500 had broken out to all-time highs and sustained that important technical event for several weeks. When investors begin to “peek under the hood” as to the reasons why the markets are at all time highs, question arise. The prices paid for shares of companies are a reflection…
Read MoreHow To Not Miss Out On Market Gains
Sometimes the market seems to have a will of its own, acting deliberately to confound the largest number of people possible. Just when everyone expects the market to plummet, for example, after a monumental event like the Brexit, it stages a rally and breaks out to new all-time highs. As upsetting as it is to…
Read MoreTrading In A Sideways Market
For the past three months, the major market indices have tended to trade within a relatively tight range. This has made it difficult for traders to find stocks that are presenting any significant directionality. Take a look at the chart of the S&P 500 below: Notice that a significant level of resistance seems to have…
Read MoreNot Including Possible Dividend Risk
My last post on the topic of dividends and options explored the terminology of dividends and common questions relating to options trading. In this post, we will understand step-by-step what exactly is meant by ‘possible dividend risk’ when trading options. To illustrate the process, we will use a recent SPY trade that was influenced by…
Read MoreIs Index Investing As Diversified As You Think?
As an active trader/investor, I spend many hours each day conducting my due diligence on the markets. This involves reading many articles/opinion pieces about the factors influencing the direction of the broader markets as well as my individual equities. I love when I come across information that furthers my understanding of why markets move the…
Read MoreBuckle-Up! Why Your Stocks Need The Safety of Options
When I tell people that I trade options, I often get the same response: options are risky. Frankly, options are the opposite of risky – when they are used properly – they give traders the ability to limit risk and also increase their odds of winning. You wouldn’t drive your car without a seat-belt, why…
Read MoreUnderstanding Options: Exercise & Assignment
As an educator in the field of options trading, I’m often asked “what causes a short call or a short put to be assigned?” Before I can answer that question I need to briefly explain what an option is, some of the terminology used, and who the participants in the exercise and assignment process are.…
Read MoreThe Influence of Dividends on Call and Put Equity Options
Introduction Regular and special dividend payments influence the price and the possibility of assignment on options. Although the impact of an ex-dividend date on an option position is usually relatively small, it is important to understand the dynamics of this process for options traders. First, let’s clarify the language in the dividend payment process. There…
Read MoreThe Quarter-Point Heard ‘Round the World
How many times have we heard the long-standing trading adage, “Don’t fight the Fed!” when discussing portfolio positioning in the stock market? When studying equity markets across time, one notices that the market heads to higher valuations when our Federal Reserve is in a process of reducing interest rates or keeping them low on a…
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