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How You Can Find The Next Big Stock Market Winner - Like NTRI, TZOO or HANSHow YOU can find the next big stock market winner - like NTRI, TZOO or HANS. An article describing how a UK medical doctor selects big winning stocks in the US market, using weekly data. Time / Diagonal Spreads - Time SpreadsTime Spreads, also known as Calendar Spreads, are an ideal way
to take advantage of time decay and changes in implied volatility. The Amazing Stock Repair Strategy - How the Options React in Up, Down, and Stagnant ScenariosIf the stock continued to trade down, the option position would
produce no additional loss. Because it didn’t cost you anything
(ideally) to initiate this strategy, you will not lose anything
additional on the spread as the stock trades down further. Introducing The Amazing Stock Repair StrategyThis strategy involves buying one at-the-money call option while simultaneously selling two out-of-the-money call options on thesame stock, in the same month. Why You Need - The Amazing Stock Repair StrategyWe have all found ourselves in situations where we have purchased stock that proceeded to trade down leaving us with a loss or a losing position that we had to fix. During the recent bull market, a common solution was to buy more of the stock at its lower price and wait for it to go up. Tax Deferral Strategies - Several Different ScenariosYou would lose a little money from the amount you paid for the collar and you would also lose a little money from $82.00 down to wherever the stock closed on expiration day in January 2004. Tax Deferral Strategies - Sell A Call OptionTo capitalize on this strategy, your call must meet certain
criteria. First, the time to expiration should be just beyond
the stock’s one year ownership time period. You need to get
beyond the one year period but not too much beyond so you are
not tied into the position longer than you have to be. Tax Deferral StrategiesFor years up until the burst of the bubble, investors needed
only to be right about which stock to buy. Should they buy XYZ,
ABC or PDQ? The philosophy at the time led investors to believe
that the purchase was the key to success. GlossaryA glossary of options terminology. Unusual Options Volume & Other Clues In - The Stock Replacement Covered Call StrategySometimes, Wall Street has a very convoluted way of looking at
things. For instance, consider the term "smart money." One would
think the term "smart money" would refer to a professional
investor with incredible talent or a fund manager, market
strategist or analyst that has had consistent success over
different market scenarios, spanning many years. Spreads, Straddles, and Strangles in - The Stock Replacement Covered Call StrategyA spread involves the purchase of one option in conjunction with
the sale of another option. There are many types of spreads. Some take advantage of stock movements while others are set up
to take advantage of implied volatility movements. Key Point In - The Stock Replacement Covered Call StrategyThis is especially important to investors/traders who trade on margin. This scenario includes another significant value added benefit that you receive. Advanced Strategies - The Stock Replacement Covered Call StrategyImplied volatility was high coming off this precipitous drop, which caused premiums in the options to increase considerably. This scenario can be a very attractive for covered call sellers or buy-writers. MER Chart – Collar Example #4During the observed period of 6 months, the trends mid-line capital appreciation is only a little more than $6.00, not much compared to many other stocks during this period. YHOO Chart – Collar Example #3The stock fluctuates widely from the mid-line of the range. Again, indicative of higher volatility. Conclusion: Yahoo offers the investor a good upside opportunity. EBAY Chart – Collar Example #2Conclusion: A stock this volatile needs a hedging strategy that provides maximum protection. A covered call strategy will provide some protection but not enough for a stock with the month in and month out volatility that Ebay exhibits. LLY Chart – Collar Example #1The longer lines indicate larger intraday ranges. In the chart above, LLY shows a very high number of large intraday movement days, again pointing to high volatility. Key Point in Collar StrategyThe collar strategy allows for a limited but continued capital appreciation of a long stock position while providing for a limited, fixed downside exposure. Leaning the Collar StrategyLike other strategies, the collar can be leaned toward the
investor's perception of the stock's direction and strength. How Does Collar Strategy Work in Different Scenarios?For the sake of our illustration and to make our calculations easy let's establish the collar using the December 27.5 put and the December 30 call, with both trading at $1.00. The Collar StrategyAnother protective strategy that allows for some upside capital
gain while providing maximum down side protection is the collar. GM Chart – Protective Put Example #4After trading in a tight range for a considerable period of time with low volatility, GM’s volatility spiked in early December 2003 and the stock gapped open considerably higher, followed by another breakout gap opening several days later. WMT Chart - Protective Put Example #3This may have been due to some investors thinking that the consolidation was a bottoming and thus a buying opportunity. As it turned out, it was a false bottom and the stock traded back down rapidly to lower lows. AMGN Chart – Protective Put Example #2A protective put can be used here with the purchase of the stock in case the stock has a false bottom. RJR Chart - Protective Put Example #1Normally, when a stock breaks a resistance level, it normally trades up to find a new range most specifically a top of the range. Often, there is an opportunity to make a large gain in a very short amount of time when a stock beaks a support or a resistance. Key Point in Protective Put Strategy.Key Point - The protective put strategy, when used correctly,
will allow investors to take advantage of some opportunities
that could provide large potential gains without being exposed
to the severe risks that normally accompany such risky
opportunities. How Can Protective Put Strategy be Adjusted?The Protective Put Strategy can be adjusted to address the
particular lean that the stock owner has at a particular time. Protective Put Strategy in Different ScenariosAs previously stated, when we buy a stock, three potential
outcomes exist. The stock can go up, go down, or remain
stagnant. The Protective Put StrategyAs a reminder, a put gives an owner the right but not the
obligation to sell a certain stock, at a specific price, by a
specified date. FON Daily Chart - Covered Call Example #4These slow upward directional moves work well for covered call writers in two ways; capital appreciation and premium capturing.Records: 541-570 from 1028