Investing “Back-to-the-Future”

Ever say to yourself, “I wonder how well my option strategy would work if it had been used over the last year, two years, etc.?”  Well, at PowerOptions, we asked the same question and then developed an option “back-testing” tools to answer the question – and we also got a patent for the technology.  The details of the patent can be viewed at this link.

For example, suppose an investor wanted to know how well the Covered Call strategy would have performed over the last year using the constraints shown below:

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How to Succeed with PowerOptions

We all want to succeed by making money with our investments.  PowerOptions was designed to provide a set of tools to help and enhance the probability of success.  If used properly PowerOptions can help you make more money.  Follow these three steps on your road to improved performance: Continue reading

Successful Bullish Investing – Even in Short-Term Bearish Markets

It’s easy to generate positive returns when investing in bullish markets, but quite difficult to generate positive returns when attempting bullish investing in short-term bearish markets. However, it is possible to generate positive returns when using bullish investments in short-term bearish markets. And, an actual profitable example will be given below explaining the concept.

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Apple: Time to Do Away with Thermonuclear

Apple (AAPL) is currently at the center of a large number of mobile patent lawsuits. The company is not merely intent on licensing its technology as International Business Machines (IBM), Microsoft (MSFT) and others. No, Apple seeks to go “thermonuclear” as Steve Jobs has been quoted as saying with the hopes of fending off competitors in court rather in the market place. Albert Einstein is quoted as saying, “I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones.” In light of Einstein’s quote, maybe Apple should reconsider its thermonuclear posture, especially, considering the company ranked 39th on the list of companies awarded patents in 2011. No surprise, on top of the patent pile for 2011 was once again IBM, followed by Samsung and Microsoft. Before a company goes thermonuclear, it should at least have the best quiver of arrows. Maybe Apple thinks it has the “biggest arrow” that trumps all others.

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A Little Less Bullishness For Google

In a couple of previous articles related to Internet search company Google (GOOG) posted on April 15, 2012 and May 25, 2012, bull-put credit spreads were considered for the company. A bull-put credit spread may be entered for a credit by selling one put option and purchasing a second put option further out-of-the-money with the goal of the options expiring worthless and retaining the initial credit as a profit. The first bull-put credit spread was successful and provided a return of 7% (70.5% annualized).

The second bull-put credit spread considered consisted of a short 2012 Jun 540 put option and a long 2012 Jun 515 put option. The position was entered for a net credit of $1.77, which represented a potential return of 7.6% (126.4% annualized). A management point of $565 was set for the position, which has been breached (shown below), so consideration for an exit or a roll is given. Additionally, since there’s only 4 days until June option expiration, consideration is given for modifying the management point and maintaining the position as is.

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Netflix: Highest Return Protected Covered Call

A protected covered call or collar search performed using PowerOptions tools, seeking to find the highest returning position for companies with a maximum potential loss of 8% and a stock price in an uptrend, produced digital video content provider Netflix (NFLX) as shown below:

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Memorial Day and Remembering

It’s good to take time to remember those who were in the military and have performed the ultimate sacrifice. I was never in the military, and at my age the military wouldn’t even take me, but I really respect those who serve, have served and those who have sacrificed in the military.

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Memorial Day is a reminder every year of how bad my memory is. Outside of car keys, wallet and cell phone, I can scarcely remember where anything else is. For example, I have no idea where my staple gun and funnels are located.

When it comes to investing, my memory is just as bad as it is with my staple gun and funnels, can’t remember the trades I’ve made or the reason(s) for the trades, which is why I use PowerOptions tools to do my remembering for me.
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The Best Investment for Mom on Mother’s Day

Stumped trying to decide what the perfect gift to get for Mom on Mother’s Day? How about an investment in on of her favorite companies? Better yet, how about the “best” protected covered call or collar investment in one of her favorite companies? A protected covered call can be entered by selling a call option against the stock and using some of the proceeds from selling the call option to purchase a protective put option.

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Those Who Do Not Learn From History are Doomed to Repeat It

Historical search capability is an important companion to selecting your own search criteria for investments. Many investors use paper trading (simulated trading without money) as a means to test their investment rules or screening criteria. But paper trading is very time consuming. And it is difficult to test over a variety of market swings. It may take months for a set of criteria to be tested. Many Brokers encourage paper trading, but few of them have the historical testing capability when options are used in the trade.

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Searching for Protected Covered Call with Dividends

Before getting to the meat of this tutorial, if you are a subscriber to PowerOptions you should consider recommending PowerOptions to your friends and acquaintances, as you can receive a subscription for a free month to PowerOptions for every friend that you recommend and that becomes a subscriber. You can send your friends and acquaintances a link which they can click on which will automatically give you a free month once someone you recommend PowerOptions to subscribes. You can find out more about the Refer-A-Friend program after logging into PowerOptions by selecting the “Home” tab and then selecting the “My Account” sub tab, followed by selecting “Tell a Friend”. Once you select “Tell a Friend”, you will be presented with your personal link which you can email to your friends or post on Facebook, Twitter, etc.

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