Despite plenty of volatility in the market, it hasn’t been any easier to generate income for your portfolio. Yields are still ultra-low for most fixed income instruments. Moreover, many high-yield dividend stocks have slashed their dividend payments. Regarding dividend stocks, buying and holding them is certainly not an unreasonable way to generate yield. The best […]
Volatility
Trade of the Week: Facebook
The market is experiencing a resurgence of volatility, adding to the already very active options market. Last week, the bears finally caught up to Facebook (FB). The social media platform’s share price dropped 8% in one day, with options trading over 1 million contracts. The selloff came courtesy of Verizon (VZ), which decided to pull […]
The Fed Is Telling You Where the Market Is Headed. Here’s How You Play It.
Trying to understand the stock market in the middle of a pandemic is a challenge for even the most seasoned of traders. It’s not like the investing world has much to compare to. Sure, the Spanish Flu seems roughly like a similar situation—but that was more than 100 years ago. The markets are far larger […]
A Brand New Way To Trade Volatility
Over the last two decades, the investment landscape has been dramatically altered by two trends. The first is the shift from single stock and mutual fund investing into exchange-traded products (primarily ETFs). The second is the emergence of volatility as an asset class. First off, ETFs opened the door for the average investor to trade […]
How Long Is Market Volatility Going To Remain Elevated?
The stock market’s daily movement has begun to normalize, at least compared to March. The major stock indexes are moving about 2% per day on average, significantly higher than what we’ve become used to. Keep in mind: it’s far more typical to see daily moves of 1% or less. Of course, a market crash will […]
Trade of the Week: Small Caps
Options trading continues to be very active in this market, even though daily volatility of stocks moves has dropped in recent weeks. Index and ETF options remain popular methods for trading market direction. They are also very useful instruments for hedging long stock portfolios. For instance, iShares Russell 2000 ETF (IWM) can be used as […]
How To Generate Income While Owning Stocks
Although the market has been extremely volatile, it doesn’t mean investors are only looking at directional trades in which they try to make money on big market moves. There are plenty who are still want to generate a regular income from their investments. Of course, dividend stocks are the primary form of income generation through […]
Is This Volatility Trade Crazy Or Brilliant?
As the reality of COVID-19 sets in, many nations around the globe are digging in for a prolonged battle against the virus. Of course, this isn’t a traditional fight: it involves quarantines, social distancing, and significant disruptions to our usual way of life. Even as many companies and schools temporarily close, it’s been business as […]
One Way To Trade Ultra-High Volatility
It’s not hyperbole to say that this is as crazy as the financial markets ever get. There may have been more shocking news items in 2008 (Lehman going bankrupt), but the huge daily swings we have seen in stocks and other asset classes are unprecedented. A market that has frequent, huge swings in prices is […]
Trade of the Week: Financial Sector Stocks
With stocks in a bear market and potentially more selling ahead, the Fed has cut interest rates to 0% and started a new $700 billion quantitative easing program. This could cause a substantial amount of volatility in the market, but especially in rate sensitive sectors like financials. In fact, a trader just bought a large […]