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Friday, June 27, 2008, 10:36 AM ET
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Are "Bullish Call Spreads" Less Risky Than "Buy Stocks"?

Wednesday, September 27, 2006, 8:16 AM ET Q. Are "Bullish Call Spreads" Less Risky Than "Buy Stocks"? A. Yes. The ‘bullish spread’ strategies have a clear advantage over the ‘buy stock ’strategy in terms of profit potential. A call bull spread is always a debit transaction, since a call with a lower striking price must always trade for more than a call with a higher price, if both have the same expiration date. Let's consider the following example...
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Are "Bullish Put Spreads" Less Risky Than "Buy Stocks"?

Friday, September 22, 2006, 8:41 AM ET Q. Are "Bullish Put Spreads" Less Risky Than "Buy Stocks"? A. Yes. The ‘bullish spread’ strategies have a clear advantage over the ‘buy stock ’strategy in terms of profit potential. Depending on the strike, “bullish spread’ strategies can be several times more profitable than a simple ‘buy stock’ strategy. Let's consider the following example...
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Are "Sell Covered Calls" Less Risky Than "Buy Stocks"?

Friday, September 22, 2006, 7:53 AM ET Q. Are "Sell Covered Calls" Less Risky Than "Buy Stocks"? A. Yes. By writing a call option against the stock, you always decrease the risk of owning the stock. It may even be possible to profit from a covered write if the stock declines. The covered call writer does limit his profit potential and therefore may not fully participate in a strong upward move in the price of the underlying stock. Let's consider the following example...
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My Stock Dropped! What Should I Do?

Friday, September 22, 2006, 5:15 AM ET Q. My stock dropped! What should I do? A. If you are facing unrealized losses on a collapsed stock, you can get better chances to save your money using call spreads. Imagine your ABC stock drops from $58 to $52. At the same time, you see that the chances of the stock bouncing back up are very slim. The instruction below will help you to bring down the break-even point...
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Are "Buy Calls" Less Risky Than "Buy Stocks"?

Friday, September 8, 2006, 7:29 AM ET Q. Are "Buy Calls" Less Risky Than "Buy Stocks"? A.There is an opinion that "Buy Call" strategies have much more risk and return than "Buy Stock" strategy. It's like a sharp knife: if you know how to use it, you will work very efficiently. However, if you are not experienced, you can hurt yourself. Two conclusions can be drawn from this illustration...
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How Credit Put Spreads Work?

Wednesday, May 3, 2006, 7:26 AM ET Q.How Credit Put Spreads Work? Give an example. A. Sell Overpriced Credit Put Spreads! Example: Our recent trade: Long GOOG Dec 390 Put Short GOOG Dec 400 Put Opened on Monday, December 12, 2005 with Initial Credit of 1.00. Expired out-the-money on Friday, December 16, 2005. 11% Gain in 5 Days!
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Net Credit And Net Debit Strategies

Monday, April 10, 2006, 6:50 AM ET Q. It seems to me that since 80% of options expire worthless, purchasing options with a net credit makes more sense to me. Is that sound judgment or am I thinking wrong? A. It is a "myth" you should not rely on! In fact, nobody cares for numerous options with different strikes and expiration dates. Every trader is focused on …
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Are Options Overpriced?

Monday, March 6, 2006, 6:48 AM ET Q. Does this mean that the option is overpriced if theoretical price is $0.46 and actual price is $1.35? A. Not necessarily. It holds true only if the stock price…
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Average 1-Day Buy-Call Return

Wednesday, February 8, 2006, 6:52 AM ET Q. Could you please explain the "average 1 day buy-call return"? A. One-day return for a "buy call" option pick is calculated in the following way…
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Almost "Ready-to-Move" Industries

QQQQ Little Changed After Disappointing Home Sales

Very Short-Term
Signal (60-min chart)

BEAR

Short-Term Signal
(daily chart)

Buy

QQQQ Snapped a Three-Day Losing Streak

Very Short-Term
Signal (60-min chart)

STRONG BUY

Short-Term Signal
(daily chart)

SELL

QQQQ Snapped a Three-Day Losing Streak