Volatility

Trade of the Week: FCEL

Trade of the Week: FCEL

While the markets were slow for the holiday season, it didn’t stop options in FuelCell Energy (FCEL) from trading quite briskly.  The hydrogen fuel cell company released earnings last week and reported a wider than expected loss on lower revenues.  The share price fell nearly 14% on the day with over 200,000 options trading.  The […]

Why You Can’t Trust Share Buybacks

Why You Can’t Trust Share Buybacks

Dear Investor, Share buybacks have become the rage for companies with large amounts of excess profits or free cash flow. Wall Street analysts love share buybacks as a way to “return capital to shareholders,” and many boards of directors give a lot of weight to what the analysts who follow their companies say. My opinion […]

How to Make Market Volatility Work for You

How to Make Market Volatility Work for You

Dear Reader, The recent stock market volatility reminds me again of the power of reinvesting the income from your dividend investment strategy. Once you understand the compounding power of dividend reinvestment, you realize that it’s very good for your long-term wealth when the stock market goes through a period of decline. It’s something my Dividend […]

One Way To Trade CSCO After It Missed Earnings

One Way To Trade CSCO After It Missed Earnings

Networking giant Cisco Systems (CSCO) dropped 5% the day after earnings were released last week.  The company’s’ guidance was disappointing to investors and revenues were lower than expected.  However, one trader used this opportunity to enter a covered call trade.  The trader purchased 1.35 million shares of CSCO (at $51.77) while selling 13,500 calls that […]

Stop Trading Options Like Stocks (Gamestop Example)

Stop Trading Options Like Stocks (Gamestop Example)

“Options are the same as stocks, just cheaper!” Ever heard a pitch start like that? Well, it’s wrong. Crazy wrong. Options trade much differently than stocks, and thus why it’s easier to lose money with options. (and this is coming from a 20+ year options trader). One key difference is options use of “implied volatility.” […]

Hedging Is More Important Than You Think

Hedging Is More Important Than You Think

One thing that I’ve learned in the many years that I’ve traded options is that most investors hate hedging.  It’s not the idea of hedging (i.e., protecting a portfolio’s downside) that’s the issue.  It’s the cost.  Hedging can be expensive over time. Investors generally are not fans of things that are meant to lose money […]

Add This Moving Average Line to Every Stock You Watch

Add This Moving Average Line to Every Stock You Watch

What’s my favorite moving average?  It’s not too volatile… but also the juiciest trends are found in this timeframe.  When prices break above it, I’m buying. When it drops below, I’m staying away.  Since early 2020, this moving average worked well for getting in and getting out of stocks.  We’re in a choppy market so […]

Happy Senior African American Couple on the Beach

Are You Making Investing Harder Than It Should Be?

I published this article five years ago. Sadly, things seem to be getting worse. The message is even more important today. Those who think and act independently will always survive. Today is a real downer. We just finished a wonderful week with our youngest grandchildren. They’re now gone and the house is quiet. That’s not […]