Analysis of Roll outs for a VEEV Covered Call Introduction: VEEV @ $114.65 +1.38 (1.22%) currently has advanced strongly over the last month or two. In the month of January 2019 VEEV had advanced from about $82 to a recent high of $116. Writing covered calls (CC) has the problem of limiting the up-side gains of a stock. Investor’s compensate for the limited gains by rolling up the strike price to participate in the upward movement of the stock. The CC strike price for VEEV has been raised several times from $95 to $100 to $105 currently. And along the way the $95 protective put has been sold to avoid further time value decay. At the same time a covered call has been written and the stock price allowed to go ITM to provide some downside protection. Problem presented: We are again considering rolling the $105 strike call as the…
Author: Ernie Zerenner
PowerOptions Coaching Continued…
Once I read Mike’s last blog post, http://blog.poweropt.com/2018/11/20/1581-coachingsession/ I decided to write up a quick summary of our Coaching benefits and an example coaching session I had recently… read on for the goodies… So what is the Coaching Session? Either Mike Chupka or I (Ernie Zerenner) are here to answer your options trading questions, show you how to profit with PowerOptions in your preferred strategies AND show you better research, analysis and trade management. This is not a sales call! We answer your questions on options trading based on experience, we’ll show you which tools we use and how to maximize performance. Are you not sure which strategy suits your needs? No problem! We can help with that too. Basic FAQs: Does the Coaching Session last the full hour? It lasts as long as you need it to! We block off an hour for each session to help you as needed….
Watch Lists Tools on PowerOptions
Problem: Your Stocks Aren’t Showing Up On PowerOptions: A couple of days ago one of our subscriber-investors called me with a problem. He complained that the stocks shown in the PowerOptions search results were companies he didn’t recognize and he had never traded before and wasn’t trading now. This happens often and for a whole list of reasons… We don’t know the list of stocks YOU like unless you enter them in a list… and the search tools find any stock, Index or ETF that meet the search parameters for that strategy. If your favorite stocks aren’t showing up, it’s because they: Don’t meet one of the Fundamental or Technical Criteria. May match those criteria, but the options don’t match the Options Criteria. Are further down the list… maybe pages down in the results. Solution: You can ‘force’ the search tools to look only for option results that are on…
A 2018 Market Forecast Mid-Term Review
At the beginning of the year I wrote a Blog article about “A 2018 Market Forecast“. The basic forecast I setup was a rotation of sectors based on the economic and political environment of the time. About a dozen stocks were recommended in 5 sectors. Using those recommendations, I formed a model portfolio and have been tracking the results over the last 6 months. This article will review how that model stock portfolio has performed and offer some portfolio re-allocation ideas. The initial portfolio in January was: There are 10 positions in the portfolio. $100,000 total was invested with about $10,000 in each position. During the last 6 months there have been some wild swings in the prices, but no changes were made to the portfolio. As an example, SLB was up as high as $79 and as low as $63. It is currently at $67 with little change from…
Trading Discipline vs. Experience
Introduction: I have been trading stocks for over 40 years. And yet mistakes are often made despite the years of experience. Just when one thinks things are going fine, something happens that humbles the trader. It is with this background that I relate a recent trading experience as a lesson we can all learn from. Background of the trade: Earlier in the year the stock Red Hat, Inc. (RHT) was traded for a 28% profit (as shown on the Fusion Track record at RadioActiveTrading.com). But after a market sell off it looked like a market opportunity to re-enter the position. RHT was purchased on 3/28/2018 for $145. A put option was also purchased following the rules in The Blueprint to create a Married Put for safety. RHT rose soon after the purchase into the 150’s and then shot up to the 160’s. The put was sold as it still had…
Stock vs. Married Put Position Analysis
Married Put Profits Compared to Stock Only Profits: Using married puts to protect and insure a stock position has certain risk / reward trade-offs. Each position is a little different. Your profit results will depend on your stock selection, how much risk you take with the purchase of the put, and what income methods you apply to the position. Two different investors taking positions in the same stock will likely have different outcomes just because of their individual choices for strike price of the put, what income method to apply, and when during the hold cycle to apply the method. Recently an investor wrote to us about some profit concerns with one of his marred put positions: “The stock DB was bought 10-4-16 using the Married Put. The stock is up 57%. I am only showing a 16% profit because of the Put. Granted Hindsight is 20/20. I realize this…
Free Options Resources on PowerOptions
Free Options Resources: What makes options resources valuable? Is it the promise of high returns? Is it the promise of a high success rate? Is it focusing on only the potential success of a strategy, without focusing on the risks or management? Let’s be honest, there are thousands of free options trading resources available. Any trader who has bought one option contract or sold a call against their stock can post a blog, video or white paper about their trade. That doesn’t make them an expert on the subject matter, although they do have an experience to share. Other free resources will give a static definition of a strategy – just enough to illustrate the basics without providing any further details on the risks of the trade or management ideas. In other words, just enough information to be dangerous. And there are still those services that will give you just…
Configure Stock Chart Parameters
Setting Stock Chart Parameters using Big Charts: In Power Options we use Big Charts as our stock charting tool. There are 3 stock chart programs offered by Big Charts: Basic Chart Advanced Chart Interactive Chart We use the Advanced Chart version, with modifications to the default parameter settings. We modify the default settings to make the display more user friendly for the options trader. The modified settings are then saved so they will be applied to future stock chart displays without the need to change from the default setting each time a new stock chart is requested. Big Charts settings are changed in the left hand column of the chart display (in blue): Stock chart parameter changes The first grouping of parameters are for “Time Frame”. A one year time frame is shown by default, but for option trading 3 months is a more convenient choice. And the frequency is left…
Earnings Growth Creates Stock Growth
Earnings are an important indicator of stock price appreciation. In general, if you expect to earn 10% on your stock investments, the stock you choose should have their earning grow at 10% or more. Certainly there are exceptions. Buying a stock because of some short term news event, a new technology that is being developed, or a rumored merger are all exceptions. But over the long run, you should select companies for stock purchase that have a steady earnings growth so they will tend to rise in stock price in line with that earnings expectation. When company selections are made for long stocks or married puts, we generally screen for companies that have good earnings growth. On the PowerOptions site the parameter we like to display and search by for earning growth is %EPSG. %EPSG is and abbreviation for % Earnings Per Share Growth. If %EPSG is not displayed in your search results, add that…
Analyzing Married Puts with PowerOptions’ Position Analysis Tool
I recently spoke to an investor about a position he had in LITE @ $47.90 +1.30. He wanted my advice on what to do with the married put position. Here at PowerOptions and RadioActiveTrading we provide tools to help investors find, analyze, and manage their investments. We do not make recommendations or give advice on how and when to trade individual stocks or options. So a question like, “What should I do next”, is rather awkward. We do not want to give advice, but will work with the self directed investor to find the information they need to make there own decisions. In this case, the conversation proceeded down the following path: The position was in his Power Options portfolio as a marred put, which enabled both of us to look at the Big Charts graph (available under “more/info”, Charts) for LITE, which had a recent large stock price rise. I asked…