Dec 29, 2012 | Investment Basics, Option Trading Basics, Stock Investing, Stock Option Strategies
When studying investment basics, the term slippage has two applications. In general, it means having a trade executed at a price less favorable to the trader. Let’s look at the two areas where we may see this term used: An order is executed at a worse-than-expected...
Dec 8, 2012 | Option Trading Basics, Stock Investing, Stock Option Strategies
For covered call writers the main stock option strategy is to purchase an equity specifically for the purpose of selling the corresponding call option. The investment time frame is one to two months as earnings reports will end the “run” of even the best performing...
Nov 17, 2012 | Option Trading Basics, Options Trade Execution
There are two ways to enter a covered call position. The first is called legging-in where the stock is purchased and then the option is sold. Two distinct trades are executed. The second is known as a buy-write order where the security purchase and option sale is...
Nov 10, 2012 | Option Trading Basics, Stock Option Strategies
An integral part of understanding option trading basics, is mastering the components that influence option value. Many option traders will look to make money as a result of a discrepancy between an option’s current market value and its theoretical value. In other...
Nov 3, 2012 | Option Trading Basics, Stock Option Strategies
JUST BECAUSE YOU BUY ITS PRODUCTS DOESN’T MEAN YOU SHOULD BUY ITS STOCK The KORS initial public offering was the topic du jour among my girlfriends at a holiday party last December. The ladies I know who invest in stocks were trying to figure out how to get in on the...
Oct 27, 2012 | Option Trading Basics, Stock Option Strategies
As safe a strategy as covered call writing is there is some risk; the risk is in purchasing the stock, not in selling the option. For this reason, some investors who sell covered calls also buy protective puts to alleviate some of the risk especially in volatile...
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