Options Trading For Income

Investors are anxiously seeking novel ways to ramp up their portfolio option trading for income in today’s ultra low rate environment. The most popular way to ramp up your income by using options is writing covered calls. Covered call writing means selling calls protected by stock held in your portfolio.  This is why the sold calls are referred to as covered since you already own the shares. How Does It Work? Remember how options work.  Purchasing one call option gives the buyer the right to buy one hundred shares of stock at a certain price called the strike price during a certain...
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5 Best Ways to Trade Stock in Today’s Stock Market

Talk about a volatile stock market!  The current high levels of volatility have forced many investors to look outside the box for consistent profits. One of the best ways to trade stock are using the volatility to their advantage is via a variety of option strategies. Here are 5 easy to understand and execute option strategies for today’s highly volatile stock market.   Straddles-Profit No Matter What Way The Stock Moves Straddles are one of my favorite option strategies. It is a trade that will profit if a large move occurs regardless of direction. A straddle is buying bo...
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3 Stocks To Short Now

The current market conditions have set some stocks up to be the perfect short sell candidates.  When overall market weakness is combined with already suffering stocks, it’s the ideal time to short. We have identified 3 struggling stocks that have set up to be textbook perfect shorts within the present market weakness. First, let’s take a look at how to profit from the overall market weakness. Buying weakness and selling strength is the mantra of professional traders.  In fact, we have written about this fact many times over the years. Following this mantra has created tremendou...
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5 Rules For Option Selling Success

Investors are scrambling to find income in today’s ultra-low yielding environment.  The low interest rates as well as fewer and fewer solid stocks paying consistently high dividends have forced the savviest investors into more esoteric ways to earn income from their portfolios. Add in the fact that it appears that the stock market has reached a short term high, at the very least, and it paints a difficult picture for traditional income seeking investors. One of the most popular ways to ramp up income from the market is selling options.  Also known as writing options, this is a proact...
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Put A Collar On This Market

The major stock indexes are acting toppy and economic fear reigns supreme around the globe.  Most investors are very confused about whether or not to take profits or to hold on for greater gains. There are strong signals that the bull market is coming to an end. Even many professional traders are confused about what to expect next. The index of fear known as the VIX has spiked to near 20 within the last seven trading days.  Also, the VIX has moved above its 200 week simple moving average for the first time since the start of the year. A combination of climbing interest rate fears ...
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Turn Your Stocks Into A Cash Machine

Many investors are finding this market extremely difficult to trade.  There is increasing volatility in both directions but no real directional bias since March.  In fact, the stock market barometer of the Dow Jones Industrial Average hasn’t moved out of a 650-point channel over the last four months. Most things are looking very bullish in the economy, and the stock market should be taking off to the upside.   However, bearish international pressure combined with domestic interest rate fears have put a lid on the stock market bulls. Both the traditionally bullish and bearish stoc...
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Using Calendar Spreads To Profit In Any Market Condition

Many stock investors are fearful when it comes to trading options.  Horror stories abound on financial message boards about traders who were wiped out or took huge losses when venturing into the options arena.  While these stories are likely true, it’s critical to note that the losses are due to the investor’s inexperience or disregard for the risky nature of options.  Like in all types of investing, risk is part of the game in options.  Knowledge is what prevents fear and turns options into profit making tools. The good news is that by understanding the variety of option strategies, op...
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