Options are nothing more than a contract with a specified premium, strike price and expiration date. Unlike buying and selling stocks or funds of stocks, options provide almost an endless number of strategies. Nevertheless, all options trading has two sides — calls and puts. Both are “sold” by an options trader. You sell a call […]
The consensus on options trading is that it is risky for the average investor. You’ll likely hear stories about people losing large sums of money in the options market. This sentiment about options being risky can be warranted. However, it often comes from a lack of understanding about how the options markets work. This article […]
When you begin trading options you’ll spend part of your research scanning for the right options to buy. When you find a list of options, then you’ll need to learn how to read the quotes to pick the right one. Quotes on stocks are simple. They involve entering the ticker symbol of the stock into […]
We seek value in many aspects of our lives. It is no different with the stock market. However, many seem to be declaring a moratorium on value investing. The good news is value investing is not dead. Here are three reasons why investors can succeed with value investing today. The first reason is that value […]
Portfolio diversification is a strategy that helps investors manage risk. Investors often choose to diversify among industries for stocks, for instance. But they also consider diversification within different assets types. Bonds are an alternative to stocks that can provide for diversification, if you understand how to use them. Should you consider adding bonds to your […]
Selling put options can be a great way to help increase the value of your portfolio without taking on too much risk. At its core, a put sale allows investors to get paid to potentially buy shares of a company they like at a price they like. But what if you have no interest in […]
Most people often have a notion of what volatility means. They understand, at least conceptually, that it has to do with data of situations that vary over time. Weather is one example. Investments are another. Volatility when applied to the stock market is a fuzzier concept to many. It is one of the main factors […]
Many people check the food labels of the items they buy in the grocery store. Labels can help give them an indication of what they buy to eat is good for them. Similarly, publicly listed companies have the equivalent of a label that investors can use to check the soundness of companies. It comes in […]
With interest rates at record lows, many analysts are questioning the benefits of running the classic 60%/40% (equity to fixed) balanced portfolio. The historical argument for such a portfolio hinges on the non-correlated performance of stocks and bonds. During times of equity drawdowns, fixed income securities typically provided offsetting positive performance, so over time the […]
You may have heard it before. When you buy an options contract, you obtain the right to buy (for calls) or sell (for puts) shares of stocks before a predetermined period. You are not required to buy or sell, however. The price that you buy and sell is known as the strike price. The predetermined […]
