You have probably heard or read that selling (writing) uncovered puts, also known as naked puts, is extremely risky. This is actually true, but only part of the story. The whole truth is — all market investing has risk! As with any investment strategy, there are trade-offs along with downside consequences. As a whole, selling […]
Interest rates are at historically low levels, creating investor appetite for income producing strategies. Below I present three option strategies that seek to generate income from stock positions. Covered calls The strategy consists of selling a call option against a stock position. The option is sold for an upfront premium. The option buyer acquires the […]
According to some, hunting for stocks that are undervalued as a basis for portfolio selection — commonly called value investing — has been out of favor as former value investors have embraced higher-risk growth stocks. The idea of researching companies with the goal of buying stocks that are cheap or undervalued was an investing philosophy […]
Billionaires George Soros, Warren Buffett, and Mark Cuban did not become rich accidentally. They made consistently smart investment decisions, which helped them create great personal wealth as well as economic value for society. While there is no guarantee that what worked for them would also work for you, here are a few vital tips from […]
When looking to buy a company that you want to add to your portfolio, there are several things to look for. There are also several things to beware. I believe that any of the following red flags — signs of a bad stock investment — are sufficient cause to pass on a specific company. Major […]
There are lots of different ways to invest and so many companies to choose from. It can become overwhelming, especially for a new investor. If you are new to investing or are thinking about getting into the stock market for the first time, there are three things I believe everyone should know. Think simple The […]
It can be overwhelming when you are evaluating a company and considering adding it to your portfolio, but I believe there are five numbers that are key with any company. Before investing any money into a company, make sure you look at these five numbers. They can tell you exactly when to buy a stock […]
The payout characteristics of short selling are similar to buying puts. The value of both instruments increases when the price of the asset (or underlying asset) decreases. This is where the similarities end, however. In fact, these two types of trading are significantly different. Perhaps the biggest difference is the risk. The risk for the […]
Beginning options investors often struggle with the concept of put options. They have no trouble with call options. With calls, beginners usually grasp that you will buy a predetermined number of shares in the future. The expiration date is also decided ahead of time. Puts, on the other hand. give the holders of shares the […]
