Options

How To Trade A Poor Man’s Covered Call

Most traders worth their salt have used, or at least heard of covered calls. Covered calls are really easy to implement and are a proven long-term strategy. However, for some, the costs of implementing this strategy can be prohibitive. For a covered call trade, the investor needs to purchase 100…

Using Cash Secured Puts To Pick Up Stocks For Less

Getting paid while you wait, I like the sound of that. A cash secured put is a conservative options strategy that can be used to purchase a stock for lower than the current price. Let’s say you’re happy to buy Apple (AAPL) at $173. You’re definitely going to be happy…

Investor Sentiment Update and Outlook: 5 Charts

The much awaited and widely predicted correction (that no one really ended up predicting) has turned 2 weeks old now, and driven the S&P 500 down almost -12% top to bottom. So it’s timely to take a snapshot of where market sentiment is sitting across a number of key indicators…

Stock Market Trends Review & Outlook (Week 7 / 2018)

THE BIG PICTURE Investors are operating in a volatile stock market climate for the first time in many months. And the reality of a stock market correction (whether brief or intermediate term) is setting in. The markets are set to rally for a second day in a row, and there…

Intermarket Chart Attack: Not Done

This is an Intermarket Analysis chart review that I provided to my fishing club members this past weekend which graphically represents relationships (strong and weak) that can foretell how the currents are moving to better identify how stocks/sectors/indices will move! You can see my last Intermarket Chart Attack here.  Note my caption was “careful”…

Chart Spotlight: Volatility Sinks To Start 2018

Investors read a lot about the persistence of low volatility in the markets throughout 2017. And just 3 trading days into 2018 and volatility is losing once more, slipping from 11.04 to 9.22. Market volatility remains suppressed with the VIX Index trading near the 9 handle. It’s good to note, however,…

SKEW Index Continues To Diverge From VIX Index

The story of volatility has been very one-sided of late. There’s been low volatility despite various geopolitical headlines which in the past would have sparked a move lower for the stock market. So what’s going on?  And are there other ways to assess risk for the equity markets? Despite low…

Options Trade Idea: $TLT Treasury ETF Credit Call Spread

Last Wednesday, iShares 20+ year Treasury bond ETF (TLT) got rejected at the underside of a broken trend line from March this year.  The intraday high of 128.23 in that session was hit well outside the daily upper Bollinger band. In the next session, the ETF dropped 0.8 percent (see…

Volatility Metrics Calling For A Breather For Stocks

Major U.S. stock market indices rallied to fresh new highs last week.  Even small-caps, which until recently had been lagging their large-cap brethren, joined the party. With seasonality in their favor, will the bulls be able to build on this or some backing and filling is in order?  The Russell 2000…

How To Trade An Iron Condor

An Iron Condor is an options trading strategy where the seller of the Iron condor is looking for the price of the underlying security to remain in a relatively tight range and the buyer is looking for the price to move out of a defined range. To understand the Iron…