Short Selling: Positives and Negatives

Jan 30, 2011 | Investment Basics

Short selling are transactions in which investors sell borrowed securities in anticipation of a price decline and are then required to return an equal number of shares at some point in the future. Let’s assume you are bearish on a stock that is currently trading at...

The Risk-Reward Profile for Covered Call Writing

Jan 1, 2011 | Option Trading Basics

(I am writing this article because I have had feedback in the past from investors who reject covered call writing based solely on the theoretical risk-rewrad profile.) A risk reward profile is a chart of the theoretical maximum profit or loss a particular investment...

The Out-Of-The-Money Strike- Pros and Cons

Dec 18, 2010 | Stock Option Strategies

Whenever a study is performed on covered call writing a stock is selected and the nearest out-of-the-money (O-T-M) strike is sold. This is repeated over and over and then the results are compared to the overall market performance. The usual conclusion is that covered...

Tax Information by Guest Author Owen Sargent, CPA

Dec 11, 2010 | Stock Trading & Taxes

Tax Time Is Upon Us First, I strongly urge all BCI members to download IRS Publication 550, Investment Income and Expenses, from the Internal Revenue Service website, at:  http://www.irs.gov/pub/irs-pdf/p550.pdf. You will recognize much of the following information...