Category: Stock Option Advisory

In previous articles, “Analyzing the Analysts – Buy, Hold Or Sell” and “Buy Stock Recommendations from Top Analysts”, we analyzed the “buy” recommendations of the stock market research analysts. In this article we analyze the “sell” recommendations of the stock market research analysts.

Options trading can be a full time job for some stock and option investors. For others, you might only spend a couple of minutes a day or a week adjusting and checking your positions. No matter how you use options(you should at least consider using options investing), there are some general option trading rules of thumb that you should keep with you. Perhaps even have them printed and posted where you do your trading.

Public companies residing in the U.S. are required to be audited by independent auditors. U.S. public companies must also file an annual report with the SEC (Securities and Exchange Commission), generally known as a 10-K. In each 10-K there is a section entitled “Report of Independent Registered Public Accounting Firm” outlining the opinion of the auditor concerning the status of the company. Most of the time this section simply says something like: “Corporation maintained effective internal control over financial reporting” and some other miscellaneous information.

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.

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?

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?

OK, so you notice a statement regarding a potential investment that says, “our strategy has been back tested”, and wonder what does that mean. Very simply, back testing is using historical data to determine the results of an investment strategy had it actually been applied in the past.

Not sure about the fundamentals you are using with your stock investing research? Good stock investment strategies always include some consideration of the stock technicals and stock fundamentals.

You should know the risk of every trade before you make it!