Category: Online Stock Trading Software

Do Jim Cramer’s stock market investment strategies on his TV program Mad Money translate into opportunities to make real money, or is the real product of his show purely “entertainment” (so to speak)? A person investing equal amounts into Jim Cramer’s buy recommendations for 2006 would currently have experienced a loss of -5.6% in their personal stock portfolio, according to the results listed at: thestreet.com.

Are all you’re eggs in one basket, your home mortgage for example. For a lot of investors, their largest investment and sometimes their only investment is their home. They quietly make the mortgage payment each month and over the years the value of their home has generally appreciated, sometimes rather nicely, and their home now represents a sizable chunk of their net worth.

A few months ago we published one of our most highly read articles titled, Are You Leaving Money on the Table? It compared people who just hang onto stocks to landlords who never rent apartments. It made many people who had at least 100 shares of a stock wonder how much they could make by “renting” that stock.

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.

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.

You might ask, “what does probability have to do with option investing?”, and the answer is “a lot”. The probability of having a safe flight on an airline is better than 99.99999%, and the probability of a safe automobile trip is 99.98%, and generally people feel safe flying or driving to their destinations. But if the probabilities for safe flying and driving were significantly different say 95%, people might not feel so safe flying and driving, and rightly so.

I meet at least 1 person per week that asks me about PowerOptions, and I always get the same question after my introduction; Isn’t option trading risky? People on the street seem to all have a friend or neighbor who told them some horror story about losing everything in the options market.

There are three popular options strategies for generating income, each of which allows investors to collect a premium while adding protection to their portfolios. The three strategies-best used in stagnant to bullish market conditions-are:

Imagine yourself owning a nice apartment building in a nice neighborhood. You have no tenants, you have no plans to get tenants, and you hold onto the building hoping it will appreciate enough to earn you a few dollars sometime in the future.