Index stock options create investment opportunities for investors who wish to take advantage of market moves, as well as protect existing holdings. Offering known risk, the premium set by a long index option ensures the investor will not incur losses exceeding the purchase price of the index option. Investors can also take short positions with index stock options, but with the potential for unlimited loss in many cases. Additionally, an index credit spread stock options position, short an index option and long an index option with the same expiration month, gives investors an opportunity to pursue leveraged investments without paying interest fees for margin as with other leveraged strategies. However, the risks associated with credit spreads on indexes must be carefully considered.
Month: August 2008
Investing in Education and Stock Options Trading
For-profit schools serve 2.8 million students and are challenging community colleges for students who want to develop specific workforce skills. These schools, in addition to their computer technology programs and entry-level business certifications, now provide programs in growth industries such as health care and education.
Covered Call Strategies for a Bear Market
The covered call investing stock option strategy is considered a neutral-to-bullish stock option investing strategy. However, with the fairly recent of appearance of short and ultra-short Exchange Traded Funds (ETFs) on the stock option investing radar, covered calls can also be used for potentially generating income in bearish markets. In turbulent or downward-trending markets, short and ultra-short ETFs offer investors a way to hedge their bets, protect their overall portfolios or generate income with covered calls. But these funds aren’t for novices, and it’s important to understand how they work before venturing into the world of short trading through ETFs.
China, the Olympics and Stock Options
The 2008 Olympics in Beijing, China will potentially offer companies unique business opportunities, even after the Olympics are over. China is undergoing an economic revolution and industrial boom. Companies that can meet the challenges that come with this rapid growth could benefit financially.
Stock Option Investing – Government Contractors Top Nine
With a weak economy, most companies are scrambling to remain afloat. But those firms who work for the federal government are still enjoying the bounty of recent contracts. The top nine companies who provide the government with critical defense work are (2007 data).
The New Housing Law and Stock Investing
Both the House and Senate overwhelmingly passed the American Housing Rescue and Foreclosure Prevention Act of 2008 last July and which was subsequently signed by President Bush. The law is intended to help nearly 400,000 homeowners avoid foreclosure and save struggling mortgage companies Fannie Mae (FNM) and Freddie Mac (FRE). The law aims to help at risk borrowers, increase the role of the FHA (Federal Housing Authority), permanently increase conforming loan limits, give grants to states to buy foreclosed property, and create an affordable housing trust fund.