An examination of selling call and put spreads. The last 2 articles examined the characteristics of buying stock or calls for an upwards move, and selling short stock or buying puts for a downwards move. The one thing in common is that for those positions the price MUST make the expected move to generate a …
Position Characteristics of buying Calls & Puts You should have already read the previous article on the Position Characteristics of Stock before proceeding with this article on Calls and Puts. The basics A call is a contract that gives you the right to buy a stock at an agreed upon price (the strike price) during …
An examination of buying and shorting shares of stock. In the last article we talked about Technical Analysis and that the main purpose of it is to develop expectations for what the price is likely to do. And to use these expectations to develop a trading plan. Part of the process of developing a trading …
Some charts to show situations where you would consider selling premium. A couple of weeks ago I discussed the Characteristics of Selling Premium. Thursday afternoon I showed some daily charts and how they related to some shorter term “directional” positions. This evening I am going to show some longer term charts and how they relate …
Today we saw the markets dealing with some shorter term time frame issues. Yesterday and this morning I pointed out that the intraday charts were getting oversold. We did see some follow thru on the djx and spx for part of today, but this afternoon those oversold conditions lead to the start of an intraday …
This week a “Members Only” article was published that presented a strategy that can generate a profit if the price of a stock or index moves sideways, moves up, or moves down. The position is not risk free. The risk characteristics were examined in detail with some possible ways to reduce or eliminate that risk …
An examination of whether the reward is worth the risk. In previous articles we have discussed the characteristics of different positions, and have looked at some charts that show when those different types of positions would be appropriate to take advantage of what the charts were showing. Today I want to go a step further, …
A look at how a Back Ratio position can be used. In previous articles we have discussed how calls (or call spreads) can be bought to take advantage of an upwards (“long”) move, and puts or a put spread bought for a downwards (“short”) move. For these directional positions the price of the stock or …
I am not talking about personality traits, but rather trading styles. There are risks and rewards associated with both styles. I will very briefly touch upon the characteristics, so that you can get a better idea of which trading style will fit you best. A leading system is one that is more of a contrarian …
Knowing the correct time frame to focus on is one of the most important aspects to managing a trade. If you are a daytrader, the monthly chart will not do you any good. And if you are a longer term trader the 3 min chart will be nothing but noise. At the top of the …
