Stock Option Trading News

The Best Naked Put Strike Price

Selling naked puts, either cash secured or on margin, is a means for investors to: Generate monthly or weekly income on bullish stocks Potentially get into stocks at a discounted price To enter a naked put trade you will will Sell to Open a put option against a specific stock or ETF. An option premium is received up front and the investor now has the obligation to buy shares of that security at the strike price, if the underlying is trading below the strike price at expiration. The investor will generally need to have the capital on hold in their account to fulfill the obligation of the sold put. This is a neutral to bullish strategy. You should only sell puts against stocks they would not mind owning in their trading account. It is generally not a good idea to sell puts that have a very high premium due to…

Stock Option Trading News

What Happens If a Vertical Call or Put Credit Spread Expires In The Money?

After one of our recent PowerOptions webinars an attendee asked: “What happens if you have a vertical call or put credit spread that expires In the money?” If both options of a credit spread (Bear Call Credit or Bull Put Credit) are in the money at expiration you will receive the full loss on the spread. You will be obligated to deliver shares of stock or buy stock at the short option strike price, and your broker would use the long option to cover the obligation. The most important thing to remember in any spread position is that

Stock Option Trading News

Using Weekly Call Options and Weekly Put Options for a Stock Earnings Event

Each quarter we get the barrage of earnings announcements and go through all the earnings figures of each company. Earnings announcements can cause wide swings in stock prices. Positive earnings events can send a stock into a gap up in price and conversely negative or disappointing earnings can result in a stock price sell off. The question then can be asked, “Is there a way to take advantage of these swings in stock price as a result of an earnings announcement?” The advent of weekly options has made it easier to play earnings announcements. Options have a time value depending on how much time there is to expiration of the option. By using very short time frames for option speculation, this time value can be made very small. Since we know when earnings will be announced and the price reaction to the announcement happens over a very short time, weekly…

Stock Option Trading News

Your Own Personalized Investment Newsletter with Personalized Investment Ideas by Email

The tools at PowerOptions are used by self-directed investors to develop a set of screening parameters that find stock and option combinations which meet your specific investment criteria and risk/reward tolerance. Once your personalized search criteria are developed and tested, the search can be implemented and applied anytime to produce your results – just logon anytime to see your search results. If getting logged into the site for your results is ever inconvenient, we also offer your search results by email. Just like a newsletter service, your investment idea results are sent to your e-mail INBOX every day as your personal opportunity list. Note: If you like the results you see from the PowerOptions built-in default search criteria, you can get those results by email as well.

Stock Option Investment Advice

Conversions Are A Riskless Options Trade

Conversions, 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…

Stock Option Trading News

Nuts and Bolts of Option Trading Tools

Option investing can often be like “finding a needle in a haystack” – an investor knows there are good option trades out there, but finding them amongst the gazillion other “not-so-hot” option trades can be very difficult.  That why over the last ten years or so PowerOptions has been developing tools to help option traders find “needles in the haystack” with less effort and with less time required. In addition to developing option trading technology, PowerOptions has also been actively patenting its option investment related technology.  PowerOptions’ latest issued patent may be viewed at this link. Sign up now for PowerOptions 14-day free trial

Stock Option Trading News

Successful Bullish Investing – Even in Short-Term Bearish Markets

It’s easy to generate positive returns when investing in bullish markets, but quite difficult to generate positive returns when attempting bullish investing in short-term bearish markets. However, it is possible to generate positive returns when using bullish investments in short-term bearish markets. And, an actual profitable example will be given below explaining the concept. See what the stock option experts are doing Sign up now for PowerOptionsApplied 30-day risk free trial

Stock Option Trading News

Apple: Time to Do Away with Thermonuclear

Apple (AAPL) is currently at the center of a large number of mobile patent lawsuits. The company is not merely intent on licensing its technology as International Business Machines (IBM), Microsoft (MSFT) and others. No, Apple seeks to go “thermonuclear” as Steve Jobs has been quoted as saying with the hopes of fending off competitors in court rather in the market place. Albert Einstein is quoted as saying, “I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones.” In light of Einstein’s quote, maybe Apple should reconsider its thermonuclear posture, especially, considering the company ranked 39th on the list of companies awarded patents in 2011. No surprise, on top of the patent pile for 2011 was once again IBM, followed by Samsung and Microsoft. Before a company goes thermonuclear, it should at least have the best quiver of…

Stock Option Trading News

Memorial Day and Remembering

It’s good to take time to remember those who were in the military and have performed the ultimate sacrifice. I was never in the military, and at my age the military wouldn’t even take me, but I really respect those who serve, have served and those who have sacrificed in the military. Sign up now for PowerOptions 14-day free trial Memorial Day is a reminder every year of how bad my memory is. Outside of car keys, wallet and cell phone, I can scarcely remember where anything else is. For example, I have no idea where my staple gun and funnels are located. When it comes to investing, my memory is just as bad as it is with my staple gun and funnels, can’t remember the trades I’ve made or the reason(s) for the trades, which is why I use PowerOptions tools to do my remembering for me.

Stock Option Trading News

4 Ways to Insure Your Investment Portfolios

Conventional Approach The conventional approach for protecting a portfolio against a large loss, research, buy-and-hold and diversification works well for singular events like an Enron or a Worldcom. However, for systematic market problems this approach can be very painful, as the stock market can drop significantly with very few stocks maintaining their value. The stock market can behave crazily at times as in the case of Technology Bubble, Lehman Brothers, Housing Bubble, Credit Crisis, Debt Ceiling, etc. Investors can be taken for very painful rides during market events such as these. Sign up now for PowerOptions 14-day free trial  (to view archived version of this presentation click the video below)