Options Trading

052317-cof-donchian

On Friday of last week, our Afternoon Channel Trader alert service recommended a bearish trade on Capital One Financial (COF). Specifically, the newsletter suggested the Capital One (COF) June monthly 87.5 puts (COF 170616P87.5), which expire on June 16th. Normally we don't divulge trades until they're entirely closed out. But, in light of the fact that we've already locked in a profit on half of the original position and we're close to an exit on the remaining half -- and given that there's so much to learn from this trade-setup -- we're going to go ahead and explore the nuances of what we saw on the chart that prompted us to pull the trigger. Spoiler alert: Though we focus on one indicator for our Afternoon Channel Trader, Capital One Financial had several things going for it at the time. First and foremost, know that the Afternoon Channel Trader alert service… more


051617-spy-call-credit-spread

Last week, our Index Options Timer service locked down a 26% gain on a credit spread entered on the S&P 500 SPDR Trust (SPY) by writing a credit spread and holding it through Friday's expiration; we'll take a 26% score for five days work as often as the market is willing to give it to us. But, in that it... more

fangs

FANG Stocks Live Up to the Hype

/ April 25, 2017 11:01 AM

Do you like the idea of 'indexing,' which is simply an investment in the broad market based on faith that it will fare well, given enough time? To that end, indexing in, say a fund like the S&P 500 SPDR Trust (which just tracks the performance of the S&P 500 index), is also a passive acknowledgement that it's difficult to... more

gamma

A couple of months ago we made the point that, although high-priced stocks tend to make their options similarly expensive, the cost may be worth it. Those stocks — we used Tesla (TSLA) as our guinea pig — tend to move in big steps. Since their deltas are just as strong as any other option, the proverbial bang you get... more

040517-gld-pl

Ever wonder how a bear call credit spread works, or for that matter, wonder what a spread is? Don't worry – it's not as complicated as it may seem. A spread is simply a two-option trade. One of the options is intended to drive the profits of a particular expected move from a stock or an index, while the other... more

target-3

One of the toughest parts about being new (or even a veteran) to the world of options trading is picking the right one. There are an overwhelming number of choices, in terms of strike prices and expiration dates, and each one of those options has a unique risk/reward profile. It doesn't have to be as difficult as it seems, though.... more

033017-amzn

A little over a month ago, we made the case for trading options on expensive stocks; Tesla (TSLA) served as the poster child. While that wasn't an official trade at the time, another pricy stock has since been the underlying instrument of a very successful trade, underscoring our point being made at the time. Subscribers to our new FANG (Facebook,... more

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