A Better Way to Put It

Protective puts are popular, but traders have more cost-efficient ways of hedging their positions Losses hurt. Experiments indicate that avoiding a $5 loss carries twice as much psychological power as experiencing a $5 gain. Traders who overstress about loss avoidance actually create the loss they so much want to avoid.   A simple online search … Continued

Volatility by Sector

RIPE AND JUICY TRADE IDEAS Traders think of Biotech as the most volatile sector, but it wasn’t in 2019. Last year, the most volatile sector by far was Oil Services, followed by Oil and Gas Exploration and Gold Miners. The least volatile sectors were Consumer Staples, Utilities and Health Care. Why does that matter? Volatility … Continued

Zeroing Out Those Utility Bills

With this hack, investors can make utility companies pay the family gas and electric tabs Traders consider utility stocks relatively safe investments—partly because regulation limits competition. Besides, the massive infrastructure required to produce gas or electricity is so expensive that it serves as another nearly insurmountable barrier to entry.  What’s more, revenues tend to remain … Continued

Sector Ignorance

RIPE AND JUICY TRADE IDEAS Most investors own one or more of the Dow Jones, S&P 500, Nasdaq or Russell 2000 indexes. Common ways to buy into them are through exchange-traded funds, such as Dow Jones (DIA), S&P 500 (SPY), Nasdaq (QQQ) and the Russell 2000 (IWM).  But drill into those indexes and it becomes … Continued

Sizing Up Futures Contracts

Most traders find old school futures contracts too big for their accounts  To trade futures, begin by understanding the sizes of the products, the expected moves and whether the futures product is appropriate for the size of the account (see “Follow the table” below).   Good thing you got a guy to help determine all that—me! … Continued

Smaller Futures Contracts Put ETFs in the Crosshairs

Savvy investors will discover more uses for the smaller futures contracts exchanges are developing Exchange-traded funds (ETFs) work well for passive investors—but not for short-term traders or sophisticated investors. Still, anyone looking to reduce risk in a portfolio heavy in ETFs will find the new, smaller futures contracts from the Small Exchange an efficient means … Continued

Worst-Case Scenarios Call for Covered Calls

Fear of losing money sidelines too many would-be investors. They’re afraid they sell at the bottom. So, what would be the worst-case scenario if someone bought at the peak and then sold at the subsequent worst time? How can a covered call—perhaps the most boring of all options strategies—improve performance? “Worst-case scenarios,” below, shows the results … Continued

Butterfly Spreads

The good news is that investors can slightly tweak many option strategies, including the butterfly, to gain maximum control over the risk and reward. The butterfly option strategy owes its popularity to its high reward-to-risk ratio, which might range from 4 to 1 to even 10 to 1. That’s risking $1 to make $4. The … Continued

The VIX Cheat Sheet

Interested in knowing how much the S&P 500 is expected to move? This cheat sheet will help! But first, get the last sale of VIX or type “VIX” into your search engine. Then, look up the corresponding VIX level and the outlook for the desired theoretical expected range. For example, in late August, the price … Continued

The Top Cannabis Stocks

With legalization of pot gaining traction across the country, it’s no surprise that cannabis stocks are becoming more popular. The list of publicly traded cannabis companies below is sorted according to the amount of stock traded daily. For example, Canopy Growth (CGC) trades an average of $162 million daily.  All of the ticker symbols mentioned … Continued