Back To Basics Friday: Choose The Best Option Every Time

When studying option trading basics, a critical formula is: Option premium = intrinsic value + time value (or extrinsic value) Many new traders find the difference between intrinsic and extrinsic value confusion, so I felt an article would be appropriate. There are three types of strike prices as they relate to…

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China Just Shut Down It’s VIX…

While most of the world saw regional equity markets covered in red overnight, China’s Shanghai Composite rebounded, rising 2.2% for two reasons: i) a delayed reaction to global equity prices after the country’s 5-day Lunar New Year holiday and ii) China’s latest crackdown on anything that can precipitate a selloff, like a…

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Why the Long-Run Strategy Beats Market Timing

Two weeks ago, when the market was going through a rough patch, I debated engineer-turned-investment-advisor Mike Turner at the Orlando MoneyShow. The session was called “Which Is Better: Buy and Hold or Market Timing?” The timing couldn’t have been better. We were witnessing 1,000-point drops in the Dow, and attendees…

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Apple Options Traders Are Betting Big On 15% Share Gain

Options traders are betting AAPL’s stock will rise by more than 10 percent by June. Apple shares have been on a bit of a rollercoaster ride to start 2018, with concerns over weak demand for the iPhone X continue to swirl, and the broader market sell-off.  It all sent the…

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How To Generate Income From Stocks With No Dividends

Most investors looking for income gravitate towards dividend stocks. There are times when those investors want to own a stock that doesn’t pay a dividend, especially if you want exposure to a fast-moving company that’s not in a position to return capital to shareholders in the form of dividends. You…

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Will Vertical Spreads Offer Better Risk-Reward Than Single Options?

Many investors and traders venturing into the world of options begin by learning about single-legged options strategies. I will always preach education to my readers. If you can add in persistence and some hands-on learning, you could start considering that buying and selling single options is your ‘bread-and-butter’ trading strategy….

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Back To Basics Friday: Two Strategies For IRA Accounts

The reason options were invented was to reduce risk. Options transfer risk from the risk averse to the risk taker. When you accept that specified risk, the risk taker (seller) is paid a cash premium by the risk avoider. If you have been reading my daily newsletter, by now you…

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Four Easy Steps To Get You Started Selling Options

Are you are ready to start making money trading but you don’t know where to start? You want your investment returns to beat the market, but you don’t want to blow all your hard-earned money trying to learn how. I completely understand. When I started, I had the same exact…

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100% Chance of New Highs in the Next Six Months

OK, so the headline is a little strong. I can’t know the future, of course. However… 100% of the time – over the past 90 years – stocks have been higher after going through what they just went through. Can you name another indicator that has called the market correctly…

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Taking An ‘L’ Might Be The Best Result

Most traders have a bullish mindset, and usually for good reason. Over the last 50 or so years, the market has moved higher. There will always be declines, but the market has always recovered losses and moved to all-time highs.  That’s just a fact anyone can see if you look…

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Why The Greeks Are Important

The objective of every trader is to make money, but with an acceptable amount of risk. We find that one of the major issues for new options traders is because they have no idea how to use options to achieve their financial goals. Buy low and sell high is certainly…

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Back to Basics Friday: How To Read an Options Chain

Go look at the options chain… Does that make sense to you? If it doesn’t, today is your luck day. This video done by our friends at TraderFly.com illustrates exactly how to view an options pricing table, or chain, for even the greenest traders. Enjoy! — The Option Specialist

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