Today on an episode of NPR I heard an interview with Michelle Leder, of footnoted.org. I am glad that I caught the interview. I agree with her cause and a little more research into the corporate accounting practices in this country certainly can’t hurt.
Author: admin
TRIN Indicator – ARMS Index
The TRIN is a market sentiment indicator. The TRIN indicator is generally used to signal overbought or oversold market conditions and is religiously monitored by some option traders. The formula for the TRIN is:
Options Pricing
So, how is the estimated “value” of a stock option determined by an option trader? An automobile’s estimated value can be found by looking it up on the Internet or in the “blue book”. A house’s value can be estimated by comparing houses sold in the surrounding neighborhood. But how can an option trader estimate the value of a stock option?
January Effect – Part 2
Historically, the month of January has shown abnormally high stock returns for stocks with small capitalizations. The effect is so large in fact that the return of a security in January may be the largest portion of its annual return. Several reasons have been hypothesized for The January Effect, but the most popular reason for The January Effect is tax reduction tax-loss selling.
Company Stock Options & Tax Reduction
Generally, stock options issued to employees are either Nonqualified Stock Options (NSO) or Incentive Stock Options (ISO). Employees receiving NSOs or ISOs could possibly realize a tax reduction with stock insurance through buying put options.
Portfolio Management: Stock Insurance
Most people have insurance for their house, car, etc., but what about for stock portfolio management? Yes, it is possible to buy stock insurance for a portfolio of stocks, but don’t call your insurance broker. Personal stock portfolios can be insured using index options, specifically by purchasing index “put” options. In general, as the price of an index declines, the put options for the index increase in value, all else remaining the same. So if the market declines in value, market based indexes will also decline and the corresponding put options will increase in value, effectively hedging or insuring personal stock portfolios against drops in the market.
Stock Investment Diversification
So you’ve been told you should diversify your portfolio for stock investing, you’ve been told it makes for good stock portfolio management, but how can you know whether one of the potential stock investment strategies you’re considering is aiding you in diversifying your personal stock portfolio. Well, one way is to simply invest in different sectors, like Health Care, Technology, Construction, Financials, Real Estate, etc. But, are Health Care and Real Estate really that diversified? How can you know if you really have a good stock trading strategy?
Stock Earnings Warnings
Earnings warning! Earnings warning! Earnings warning! Some (not all) public companies when determining they have or will have a shortfall in earnings compared to previously forecasted earnings may issue an earnings warning. The stock price for a company issuing an earnings warning can be dramatically affected as a result of the warning.
Strike of Pain Calculator
The Strike of Pain is the strike price with the lowest In-the-Money value for both calls and puts on a given stock for a given expiration date. This is the strike where the long option traders will lose the most money and the short option traders will gain the most value. The Strike of Pain is calculated by taking the open interest of the various In-the-Money strike prices multiplied by the amount that the call or put is ITM. The ITM values are added together, and the strike with the lowest monetary value is the Strike of Pain. The Strike of Pain calculation is based on the theory of Max-Pain(tm) developed by BCA Software.
OptionsXpo & BrokerLink
If you haven’t heard yet, we have upgraded our BrokerLink technology with optionsXpress. Now, PowerOptions users can easily and conveniently trade any stock option investment strategy they find with just a few clicks.