Category: Stock Option Investment Advice

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.

“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.

On Friday, February 26, 2010 an article in the “Making Money – Investors Corner” section of Investor’s Business Daily (IBD) written by Paul Whitfield, caught my attention. The article was about breakaway gaps as a bullish form of action. Whitfield illustrated several examples where stocks with price surges of 10% in a day often had very nice price appreciation gains several months in the future. The concept used in this type of stock selection depends on the positive event having some lasting power and traction. It uses the concept of buying high on positive news and selling higher. Articles in IBD often advocate this technique. This is the opposite of the buy low / sell high approach so often talked about by swing traders and other technical analyst.

GDP… The U.S. GDP (Gross Domestic Product) was announced as 5.7% for the fourth quarter of 2009 and the stock market immediately celebrated the good news by jumping up and then back down.

We’ve been getting quite lot of questions related to PowerOptionsApplied lately, so we’re going to address some of them.

Simple Tech’s stock price and its stock option volumes have been very erratic over the last several months. Simple Tech’s stock price took a significant hit in the middle of September and also around the first of November, but since the middle of December it’s stock price been on the upswing.

There’s been a lot of banter lately about health insurance and this article is NOT about health insurance, at least not the kind related to doctors, hospitals, Congress, etc. Individual or Group? We will examine whether it is better to insure stocks individually or as a group. In an article published several years ago, we explained how to insure a group stocks with index stock options: Portfolio Management: Stock Insurance.

Fuel System’s (FSYS) stock option volume was up yesterday while its stock was down almost 10%. If you’re looking to purchase a car or convert a car to operate on natural gas, then Fuel Systems is for you. Fuel Systems provides components for alternative energy in the transportation segment. Fuel Systems IMPCO subsidiary provides products in the industrial and power generation market segment and it’s BRC subsidiary provides products for the alternative fuels transportation market segment. Fuel Systems derives a large part of its revenues from selling its products in Italy. Italy provides a subsidy or support for natural gas through a reduced Value Added Tax [VAT].

Nobel Drilling’s (NE) stock options volume is significantly up today and its stock price is down about 6%. Noble Drilling is in the business of providing drilling services for the oil and gas industry. Noble has over 60 offshore drilling rigs including semi-submersibles, drillships, jackups and submersibles.

Sun Microsystems (JAVA) stock options volume went into orbit yesterday and its stock price was up about 4%. Sun Microsystems once-upon-a-time proclaimed itself as the “dot in dot-com,” but fell from grace with the dot-com implosion. Sun is in the business of providing software, servers, storage, networking and desktop systems. The company is known for developing its line of high-powered workstations and for developing the Java programming language.