Category: Stock Option Investment Advice

In the article, “Bond ETFs – Calendar Calls and the Business Cycle“, we outlined a bond ETF calendar calls stock options strategy. This strategy is mostly geared for a softening economy, but may perform well in an environment of relatively unchanging interest rates as well, as is the case of the current interest rate environment.

In article, “DJIA – Stock Price Resistance“, we outlined a bearish strategy for the Dow Jones Industrial Average when the index is close to its historic high using bear call spread options. Basically, the $DJX had to remain below $120.1 for the strategy to be profitable. The options for the $DJX expire “AM Settlement”, and based on the opening price of the stocks in the $DJX on October 20, 2006, the settlement price for the $DJX was $120.16 (see settlement values ).

Wal-Mart announced it has agreed to purchase a Chinese merchandising chain for $1 billion. The deal, if approved by Chinese regulators, would give Wal-Mart the largest retail presence in China. Maybe Wal-Mart will have better success in China, than in South Korea and Germany, two countries the large retailer found rough going and recently pulled out of.

The North American Electric Reliability Council (NERC) announced the demand for electricity is expected to increase 19 percent over the next ten years, but electrical power capacity is projected to only increase 6 percent over the same time period.

Google’s (GOOG) announcement of its acquiring YouTube for $1.65 billion in a stock-for-stock transaction may be a good strategic move in the long term, but for the short term the Google/YouTube deal may not be so hot for Google’s stock price.

Wal-Mart’s stock (WMT) has been stagnant for the last several years. A large part of Wal-Mart’s problem stems from the company having saturated the rural and suburban U.S. with stores and having a need to find other avenues for revenue growth.

In recent months the price of natural gas has plummeted and because of this price drop hedge fund Amaranth Advisors lost its investors over $6 Billion. The natural gas industry as a whole could be set up for a reversal.

The Dow Jones Industrial Average has been flirting with all-time record highs the last several days. In this situation, a bear call credit spreads stock options position may be a good strategy to consider.

In a recent article, ” Jim Cramer – Bear or Just All Bull “, we analyzed Jim Cramer’s “short” track record, and it was slightly positive. Bear call credit spreads give stock trading investors the opportunity to take Jim Cramer’s slight shorting advantage and multiply it.

You may have heard the phrase, “there’s always a bull market somewhere”, referring to the idea that even though the general market is trending down there are still stock symbols of companies trending higher. The reverse can also be said, “there’s always a bear market somewhere”, referring to the idea that even though the general market is trending upward, there are still stock symbols trending downward.