by: Michael Chupka, PowerOptions (www.poweropt.com) Director Of Education ‘Twas the day of Expiration, and all through the market, A Cautious optimism kept closed the wallets. Recent Index highs hung over as a dare; Gold and silver had run up without a care. (Click on the video below and check it out!)
Cut Your Loser Investments Short…and Let Your Winners Run
In this RadioActive Trading webinar, Kurt Frankenberg discusses the simple rule that all investors have heard, but rarely implement in their personal accounts. “Cut your losers short…and let your winners run.” As simple as this sounds, it is much harder to put it into actual practice. Many stock options investors will establish ‘hedged’ positions that in fact do the exact opposite…cut your winners short with the potential to let your losers run. That is a recipe for investing disaster.
Waiting to Roll Investments
As we approach December expiration, the last standard options expiration date of 2010 (excluding Weekly series expiration and the December Q4 Quarterly expiration), PowerOptions’ staff has received several phone calls and emails from customers regarding rolling or adjusting their positions. This is fairly common heading into any expiration, but a few things in particular stood out for me this cycle when talking with customers: There are circumstances where it might be best to wait to fully roll a position to a new month or to a new strike price. This concept is not new, but it is something that may at times be overlooked as an investor hastily seeks to generate new income or ‘hedge’ the existing position.
PowerOptions Granted Allowance on 3rd Patent
The Power Financial Group, Inc. is proud to announce the issuance of our 3rd US patent, entitled, System and Method for Analyzing and Searching Financial Instrument Data.
Follow Up: New Weekly Options Listings and a Quarterly Options Update
As you may have heard, Weekly Options have been released for several common stocks as we have previously discussed. Some new stocks have been added, and some other changes have been made. On June 25th, 2010, Weekly Options were made available for 4 common stocks: Apple (AAPL), Bank of America (BAC), British Petroleum (BP) and Citigroup (C). On July 16th, Weekly Options were made available on four more stocks: Amazon (AMZN), Ford Motor Co. (F), Google (GOOG) and Microsoft (MSFT). On July 23rd, Weekly Options were available on 5 new stocks: Barrick Gold (ABX), Baidu (BIDU), Goldman Sachs (GS), Potash Corp. of Saskatchewan (POT) and Exxon Mobil (XOM).
Follow up: New Weekly Options – On 4 Common Stocks
About a month ago we posted a blog discussing the new Weekly options that were available on stocks for the first time. On June 25th, 2010, Weekly options were released on four common stocks: AAPL – Apple Computer, Inc. BAC – Bank of America Corp. BP – British Petroleum Co. C – Citigroup, Inc. Late last week, on July 16th, Weekly options were made available on four more common stocks: AMZN – Amazon.com Inc. F – Ford Motor Co. GOOG – Google Inc. MSFT – Microsoft Corp. Weekly options carry the same rights and obligations as standard calls and puts. The only difference is that the expiration time frame is shorter. Weekly options are typically released on Thursday or Friday and will expire the following Friday. If you would like to know more about Weekly options, join PowerOptions’ Director of Options Education, Mike Chupka, for a free presentation on Monday,…
New Weekly Options – on Stocks!
Today, June 25th, 2010, marked another new stock options investing product for investors. Weekly options, also called short-term options or short dated options, have been available for some time on broad based market indexes: S&P 500 ($SPX), Nasdaq 100 ($NDX) and Russell 2000 ($RUT) for example. Earlier this month weekly options were released for certain ETFs: SPY, QQQQ, DIA and IWM. Today weekly options were released on four popular stocks:
How to Make Income on British Petroleum — Even Without a Dividend
Due to the oil spill in the Gulf of Mexico, British Petroleum (BP) announced it is going to create a $20 bill fund to compensate victims and also cancel shareholder dividends for three quarters. British Petroleum’s current annual %dividend is in the neighborhood of 10%. For those investors invested in BP depending on the dividend, this could be traumatic, especially if they don’t want to sell their BP stock because of tax reasons. What should an investor stuck in this situation do?
Insuring Portfolio with Put Options or VIX Call Options?
Insuring Investments Investors often have insurance for their house, car, life and business, but many don’t have insurance for their stock investments and that is a real shame. One way to insure stock investments is by purchasing put options. An investor can insure an individual stock or a portfolio of stocks using put options. In the blog article, “Individual Insurance or Group Insurance Better?”, we examined the relative costs and trade-offs for insuring each individual stock versus insuring a portfolio of stocks using index put options. The basic gist of the article is that it costs less to insure a diversified portfolio of stocks with index put options than it costs to insure each position individually.
Iron Condors and “Flash Crash”
“Flash Crash” of May 6, 2010… The market event that occurred on May 6, 2010 is now known as the “Flash Crash”. “Flash Crash” accurately describes the situation, as the market crashed for just a flash, as seen below: Over before you know it… For those not watching the market closely and not having stop orders, the “Flash Crash” happened and everything was pretty much just as before. But for investors watching the market tank and selling in a panic or for those investors with stop orders set, the “Flash Crash” was most likely a disaster.