Technical Analysis

Protecting Against Downside Risk As Retail Stock Report Earnings

Protecting Against Downside Risk As Retail Stock Report Earnings

The increase in market volatility the past couple weeks is helping to reawaken interest in hedging with options. More specifically, I’m seeing a lot more downside protection trades in the options market than before the correction at the beginning of February. Investors have quickly remembered that stocks can move really fast when things get hairy. […]

Spotting the Warning Signs of the Next Correction.

Spotting the Warning Signs of the Next Correction.

On a hot summer day, I was flying my single-engine Piper Comanche from Schaumburg, IL to Indianapolis, IN. I decided to fly higher than ever before (9000 feet). With the tailwind, I touched 200 mph. The sky was crystal clear; I could see across Lake Michigan. I felt like I was in the stratosphere and […]

How to Earn 200% Trading Volatility

How to Earn 200% Trading Volatility

For options traders, the recent massive spike in volatility has mostly been a welcome change. It’s much easier to trade options for profit when volatility is high – assuming it comes back down at some point. This past week has been a near ideal environment for options traders, especially those who like to sell options. […]

Where to Invest For the Next Correction.

Where to Invest For the Next Correction.

My grandfather, William Paul Smith was an ordinary dairy farmer with a degree in common sense. One of his favorite sayings was, “It’s the same thing, only different.” 70 years ago, he warned me not to throw rocks at a wasps’ nest. As I cried and put ice on the sting, he explained what happened always happens […]

A lot of cash US dollars.

A Big Bank Trade Moving Into Earnings

As an options trader, earnings season is often one of the most enjoyable times to trade. During the heavy earnings periods, you often see plenty of large moves in individual stocks (for obvious reasons). Options can be a good way to capitalize off those big moves. However, the biggest challenge with using options for earnings […]

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Should You Pay Off The Mortgage?

I’m frequently asked about paying off a home mortgage. I tell everyone, “It depends!”. I asked that same question. A friend said his CPA was emphatic that one should not pay off their mortgage. He arranged a meeting where the three of us could talk. The CPA asked about the interest rate; 6% at the […]

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This Surprise Stock Could Make You Big Bucks

It’s no secret that options are often the investment vehicle of choice for “smart money” traders.  Big funds and trading firms regularly use options to establish their biggest positions – sometimes in conjunction with stock holdings, other times just using options.  It’s especially true for the most heavily traded ETFs and stocks. Less often, you’ll […]

An image of a people arguing over whether to buy or sell.

When Advice Conflicts, Who Should You Listen To?

We moved to Texas in the early days of the dot-com boom. I reconnected with a boyhood friend Tom. He has an economics degree from an Ivy League school, became a successful stockbroker and economics consultant. My broker would “suggest” I consider some of the hotshot dot-com stocks. Tom provided a good offset, suggesting caution. […]

An Interesting Way To Hedge Portfolio Risk

An Interesting Way To Hedge Portfolio Risk

One of the great things about options is how flexible they can be for custom-designing strategies to meet your needs.  With options, even something as mundane as hedging can be done in an interesting and creative manner. This is especially true since volatility ETPs (exchange traded products) have become widely popular among traders and investors. […]