Recent Articles and Videos

We have demonstrated how well options function in unison with a stock position. They enhance potential gains and provide profit protection. They enable us to manage specific risk in a single stock as well as an entire portfolio. But, as good as options are in conjunction with stocks, they can be even better when traded…click to read more.

Key Point – The fact that you are creating the covered call strategy (buy-write) by doing the vertical spread is very important to note. For margin purposes, the vertical spread will be margined at a much more favorable rate than the traditional buy-write because you do not own the actual stock and therefore do not…click to read more.

Advanced Strategies

Tuesday, October 30, 2007
Filed Under Intermediate Options Trading 

The Stock Replacement Covered Call Strategy Recently, (October and November ‘03), the giant biotech Amgen (AMGN) came under some intense pressure, trading down about $12.00 before it found what appeared to be a decent level of support, and began to consolidate. At this level, anyone interested in going long Amgen at a discounted price would…click to read more.

MER Chart – Collar Example #4

Monday, October 29, 2007
Filed Under Option Trading Articles 

MER stock trading chartread more | digg story

NOTES ON Merrill Lynch (MER) Collar 1) During this viewing period, Merrill trades in an uptrend from late June 2003 at a price of about $45.00 through January 2004 with a high around $60.00. 2) This is a wide trend with some intra-month ranges as much as $5.00 and $6.00 wide, indicating a volatile trend.…click to read more.

NOTES ON Yahoo (YHOO) Collar 1) Yahoo, a historically volatile stock, bottoms out and then trades through resistance of a downtrend in mid-August 2003. 2) Yahoo then trades in an uptrend from a price around $33.00 in late August out through January 2004 with a price high of $46.00. This represents a 40% increase in…click to read more.

EBAY Chart – Collar Example #2

Saturday, October 27, 2007
Filed Under Intermediate Options Trading 

NOTES ON EBAY (EBAY) Collar 1. Ebay traded in a very wide range during July 2003. It started the month around $51.50 and traded up to $57.50 before trading down to $54.40. Within a week it traded to a high of $59.00. The week after that, the end of the month, the stock was down…click to read more.

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