Effectively Track and Manage your Options Investments

As we approach options expiration you need tools to properly track, evaluate and manage your options positions.  All of this can be done using the Portfolio tools on PowerOptions.

You can quickly create and enter new or existing positions into the Portfolio tools. Once a position is entered you can set Alerts to be notified when profit targets are hit or when losses may need to be managed.

As you track your positions you can link to the Position Analysis tool to see your current liquidation and future expiration values as well as view various roll out opportunities for your positions.

As you are viewing potential Roll Out Opportunities you can link to the Trade Simulator tool to see the before and after profit and loss graph of your current position compared to the potential adjustment.

This video shows just how easy it is to enter positions into the Portfolio and evaluate adjustments as expiration approaches.  Enjoy, and we hope you have a profitable expiration!

5 Keys to a Successful Option Spread Trading Plan

The key is likely to first develop a trading plan for your spread positions in conjunction with the tools on PowerOptions. A trading plan may consist of:

  1. What are my goals for monthly or annual income?
  2. What exposure am I willing to risk in the market?
  3. Should I look for lower probability trades with a higher return, or higher probability trades with a lower return and higher risk vs. reward ratio?
  4. What is most important in your trade selection:
    • The underlying security?
    • Minimum option premium?
    • Volatility?
    • % Return or % Annualized Return?
    • % Probability?
    • Difference in strike prices (risk on the trade)
    • Time frame for an open position (weeklies vs. standard expiration).
  5. Detailed Exit Strategy, including what is an acceptable loss vs. management techniques in various situations.

This may sound like a lot to cover but once you map out a trading plan the pieces will fit together regarding:

  1. What criteria are most important to use in the PowerOptions search tools.
  2. What steps will you use to research and analyze the position more effectively.
  3. What alerts to set in the Profit and Loss Portfolio tool as you track your spread positions.
  4. What to look for when adjusting, rolling or closing a spread position.

The PowerOptions’ staff is available every trading day during trading hours by email and toll-free phone lines to help you get your trading plan together and get you setup with the PowerOptions tools to make your investing plan easy to implement.

Conversions Are A Riskless Options Trade

option conversionConversions, if you are able to receive a credit, are no risk options trades with a very limited reward.

One example of a conversion is:

Buy shares of SLV @ $18.73
Sell JUN 18 call @ -$ 1.08
Buy JUN 18 put @    $ 0.34

Net Debit =         $17.99
Guaranteed exit/assignment = $18.00
Guaranteed Profit =          $ 0.01

ADVANTAGES:
1.  Possibility for a no-risk trade
2.  Credit is received
3.  Management is not necessary
4.  Opportunities can easily be found with PowerOptions

DISADVANTAGES:
1.  Guaranteed Profit is extremely limited
2.  After commissions limited profit might turn into a loss
3.  Due to low profit, 1,000s of shares may need to be traded which hinders the retail investor
4.  Opportunities may appear, then disappear quickly.  I found this trade on PowerOptions, but by the time I linked to the profit and loss chart the trade showed a guaranteed loss of -$0.04 due to price changes in under a minute.

Stock Insurance OR Portfolio Insurance – Revisited

With the addition of new and interesting securities to help hedge a stock portfolio, the question arises more and more: ‘Is it better to insure my stock directly or use a different hedge to insure my portfolio?’

This is a very important question which has many components to it. During a PowerOptions Open Forum Webinar on January 14th, 2014 this question was posed. The actual question was: Continue reading

MORNING UPDATE: PriceWatch Alerts for BA, TSLA, AAPL, and More…

MORNING UPDATE: PriceWatch Alerts for BA, TSLA, AAPL, and More…

February, 11 9:00 AM ET – PriceWatch Alerts for BA, ATVI, MNST,
TGT, YPF, TSLA, DISH, BLK, MMM, RIG, AAPL, NPSP, GM, X, Market
Overview, News Leaders and Laggards, Today’s Economic Calendar,
and Index Support & Resistance Levels.

PriceWatch Alerts for BA, ATVI, MNST, TGT, YPF, TSLA, DISH, BLK,
MMM, RIG, AAPL, NPSP, GM, X, DLTR. Continue reading

Weekly Options Crash Course for Options Expirations

When the weeklies were initially offered on standard stocks, you would have only the next week out option. The new option would be released on Thursday morning prior the current weekly option expiring on Friday.

Continue reading

Filter for MACD added to the PowerOptions Search

A new filter for MACD has been added to the PowerOptions Search tool for all strategies! This new filter (located in the Technicals tab) will allow you to search for stocks where the MACD is above or below the Signal Line and by how many days. You will also be able to screen for stocks where the MACD and Signal Line are above or below the Zero line. This filter will allow you to better screen for stocks with positive or negative momentum.

Timing Investments when Stock Price Crosses a Moving Average

Timing your entry into a position using options is very important because time premium is continually eroding from the position.  Ideally we want to enter a bullish position just as the stock is about to move up.  It is not possible to know in advance when the move will occur, but we can get an early indicator once the move has started.  There are several tools available to help the investor pick the best time to enter a position.  One such tool, which has been recently added to the PowerOptions screener, is the crossing of a stock price above a moving average such as a 20 or 50 day moving average.  Another form of this tool is to use the crossing of the 20 day moving average over the 50 day moving average as a bullish trigger.

Investors will scan charts looking for this type of crossing to trigger a buying opportunity.  They also look for confirming volume as the crossing takes place, however, this effort can be very time consuming.  Using the PowerOptions screener an investor can scan the entire market very quickly to find a first-time stock price crossing of a moving average.  The parameter scanning form in PowerOptions to capture the moving average crossing is very simple to use: Continue reading

Portfolio Tools offer Trade Management Ideas

Have you been using the PowerOptions Portfolio tools to help track and manage your options positions? If not, now is a great time to start!

PowerOptions free trial users and subscribers can enter new positions into the Portfolio directly from the patented Search tools or manually with just a few clicks. Some basic features of the Portfolio tools to help you better track and manage your positions are:

  • Profit and Loss Portfolio tool tracks your current positions as linked trades – meaning your covered call position will have the stock and call option linked together rather than separately.
  • View Original Expected Gain vs. Liquidation Value vs. Future Expiration Value for the entire position, not just the individual leg. Continue reading

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