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Options 101: A Myriad Of Strategies

Options 101: A Myriad Of Strategies

The beauty of option volatility trading is its flexibility.  The math does not change as you move from one asset class to another.  The market forces certainly change, but if you have a market that you want to trade, your option education goes right along with you, seamlessly.  Let’s say you are the type of trader whose experience, capitalization and risk tolerance has allowed you to be...

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Tick Tock: Three Day Holiday Means Sell Premium

Tick Tock: Three Day Holiday Means Sell Premium

As a regular options premium seller, I love the three day holiday.  We have one coming up this weekend for Memorial Day, and even though volatility is low the clock is my friend.  You see, time decay will work in my favor as a seller; I will receive an extra day of no trading.   Now, you may be thinking prices are already reflecting this, and by the option pricing models the answer is yes. ...

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Selling Puts still Good Equity Building Strategy in Crude Oil

Selling Puts still Good Equity Building Strategy in Crude Oil

Oil prices are on the way back up. The big question in the media these days is where is it going now? Like everyone else, I have my opinion (which I gladly shared on Fox Business this week, my fellow analyst aghast that I dare counter Goldmans forecast). However, opinions on where prices are going are more of a fun conversational topic for the media. When it comes to making money, you’ll...

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Premium Selling with Defined Risk

Premium Selling with Defined Risk

I think most market observers and participants would agree that the lower interest environment has been a big contributor (if not the biggest) to the stock market boom.  Since 2009 the equity index markets have been giving what many investors view as the best return on investment. Even with the end of QE, and rampant rate hike speculation, the S&P 500 has continued to move higher. Since...

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Novatel: Option Traders Position For A Rebound

Novatel: Option Traders Position For A Rebound

On May 5th, Novatel the $242M wireless solutions company reported that Q1 revenues rose 10.8% to $53.5M (mobile computing accounting for 83.4% of sales). They reported a small quarterly loss (in-line with Wall Street estimates), but are still projected to have a full year profit and build on that into 2016. One major positive was the 380 basis point improvement in non-GAAP gross margins to...

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Grain Exports

Grain Exports

Export sales for wheat on the week came in at minus 449 thousand metric tons.  Sales have been bad for months, but this should not be looked at as anything different than the week prior as wheat’s new marketing year begins June 1st.  It is common in the last month of the old marketing year to see cancelations and new shipping dates for new crop delivery.  Export sales for the new marketing...

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Facebook Calendar Spread

Facebook Calendar Spread

As an options trader, all we are trying to do is maximize the reward for the risk we take.  I don’t have a crystal ball.  I do have tools at my disposal in the form of technical and fundamental analysis.  Let’s take a look in Facebook (FB).  Facebook has been a stock that has been hard to buy.  What do I mean by that?  Sure it’s easy to say “I want to buy FB” turn around, hit the green...

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Running out of Steam?

Running out of Steam?

On Wednesday the Federal Reserve had everyone’s attention with the FOMC announcement. I don’t think there were any surprises as the Fed left interest rates unchanged…for now. Speculation continues about when a rate hike is coming. I think most Fed forecasters would agree that June is off the table, while some are circling the September meeting on their calendars. The Fed has repeatedly told...

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Altera: Is A Buyout Still In The Works?

Altera: Is A Buyout Still In The Works?

Altera rallied to multi-year highs last month on speculation of Intel looking at a potential takeover offer for the smaller semiconductor company. Talks appeared to stall just a few weeks ago according to CNBC's David Faber, but the most interesting part of this is that Intel reportedly was willing to pay $50+ per share to acquire them. Unusual Options Activity On top of this, post initial...

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BBY-Options Strategy

BBY-Options Strategy

I like holding the cards, or at least stacking the odds in my favor.  Let me show you what I mean.  I had a major technical long trigger Tuesday morning in Best Buy (BBY).  Here’s the chart: Not to get too “technical” here, but we have two major indicators that signaled the long. First is what I call an inside bar entry and second was how it put in lows at or near the 200 Day Moving Average...

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Ways To Play The 6% Pullback In GE

Ways To Play The 6% Pullback In GE

Back on April 10th, General Electric said they were planning on selling most of GE Capital over the next two years (shedding most of GE Capital Real Estate for $26.5B) and announced a $50B share repurchase program to top it off (plan to bring the share count down to 8B from 8.5B by 2018). Shares of GE trade at a P/E ratio of 17.24x (2016 estimates), price to sales ratio of 1.80x, and a price...

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CMG – Buy Weekly Call Flys

CMG – Buy Weekly Call Flys

Chipotle Mexican Grill (NYSE: CMG, $693.14) is scheduled to report earnings after today’s market close.  The stock has been relatively flat in 2015 (up just under 1% YTD), but has been a very strong performer - CMG is up nearly 92% over the past 2 years.  Former parent company McDonald’s Corp. (NYSE: MCD, $94.84) has had nearly as lackluster a performance in 2015, with shares having risen an...

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Is Crude Really Making A Comeback?

Is Crude Really Making A Comeback?

Over the past few weeks, we have seen crude oil rise sharply and, just Wednesday, it reached levels not seen in months. The commodity is up sharply, having rallied more than 10% in a week.  Of course, we’ve seen short-lived rallies before, so is this just another one that will fade or is this going to stick?  That’s a great question and clearly will tell us the chances of making profitable...

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Sell The May E-mini S&P 500 2110-2130 Call Spread

Sell The May E-mini S&P 500 2110-2130 Call Spread

The S&P 500 has seen quite a few ups and downs since trading at 2175 at the end of February. The market traded all the way down to 2030 by mid-March. By the end of the month, the index had traded above 2100 again in two separate sessions, only to follow up with another visit to the 2030 area. Volatility anyone? The Federal Reserve still casts a large shadow (or cloud depending on your...

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Positive Signs Coming From The Gold Miners

Positive Signs Coming From The Gold Miners

It is no surprise to anyone following the financial markets in the past few years that the gold miners have been one of the worst places to invest (aside from coal companies). The Market Vectors Gold Miners ETF has fallen 69% from the September 2011 highs above $65 and 28% from the 2014 highs. A stronger U.S. dollar and an end to quantitative easing have put downward pressure on commodities...

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