Publications

8/10/11 Trade Alert: Rolling Four Vertical Spreads

(Rationale for these trades was discussed in this week’s briefing) 1. Vertical Roll on Amgen (Nasdaq: AMGN) “Buy to Close” August $57.50 Put and “Sell to Close” August $52.50 Put and “Sell to Open” January 2012 $57.50 Put and “Buy to Open” January 2012 $47.50 Put Option Symbols: AMGN110820P57.5 and AMGN110820P52.5 and AMGN120121P57.5 and AMGN120121P47.5 […]… Read More

8/9/11 Weekly Briefing: Options Are Their Own Hedge Against Market Declines

The recent stock market crash has exposed the inherent advantages of options over stock in limiting losses. Jim also reveals his strategy for rolling forward four of OFI’s August vertical spread positions…. Read More

8/4/11 Trade Alert: Profiting From Risk–UPDATE

(updated with trade rationale) Sell Put Credit Spread on CME Group (Nasdaq: CME) “Buy to Open” December $240 Put and “Sell to Open” December $250 Put Option Symbols: CME111217P240 and CME111217P250 Limit Order Price: Net credit of $2.20 or more ($220 per spread) Directional View for Underlying Stock: Neutral to slightly bullish Options for Income […]… Read More

8/1/11 Weekly Briefing: Good Trades Can Have Bad Results

Outcome bias is a pitfall for many investors. What’s important is the investment process, not the outcome of a single trade…. Read More

7/28/11 Trade Alert: Foreign Fantasy–UPDATE

(Updated with trade rationale) Sell Put Credit Spread on NetEase.com (Nasdaq: NTES) “Buy to Open” September $41 Put and “Sell to Open” September $48 Put Option Symbols: NTES110917P41 and NTES110917P48 Limit Order Price: Net credit of $1.50 or more ($150 per spread) Directional View for Underlying Stock: Neutral to slightly bullish Options for Income Portfolio: […]… Read More

7/25/11 Weekly Briefing: Don’t Get Vexed by the VIX

Investors often ask whether they can hedge against “black swan” negative events such as a US debt default by purchasing call options on the VIX. The answer is more complicated than one might think.
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7/21/11 Trade Alert: Software Generates Loads of Cash–UPDATE

(updated with trade rationale) Sell Put Credit Spread on Autodesk (Nasdaq: ADSK) “Buy to Open” August $31 Put and “Sell to Open” August $36 Put Option Symbols: ADSK110820P31 and ADSK110820P36 Limit Order Price: Net credit of $1.30 or more ($130 per spread) Directional View for Underlying Stock: Neutral to slightly bullish Options for Income Portfolio: […]… Read More

7/18/11 Weekly Briefing: Expiration Autopsy: Don’t Be Blinded by Hindsight

Hindsight is 20-20, but trading success with options requires a rational process for dealing with uncertainty. Also, Jim answers readers’ questions and plays Monday morning quarterback on last week’s diagonal trade…. Read More

7/15/11 Trade Alert: Our First Diagonal Spread–UPDATE

(updated with trade rationale) Sell Diagonal Put Credit Spread on Danaher Corp. (NYSE: DHR) “Buy to Open” September $47 Put and “Sell to Open” August $52.50 Put Option Symbols: DHR110917P47 and DHR110820P52.5 Limit Order Price: Net credit of $0.95 or more ($95 per spread) Directional View for Underlying Stock: Neutral to slightly bullish Options for […]… Read More

7/14/11 Trade Alert: Rolling Two, Closing One

1. “Buy to Close” July $55 Put on United Therapeutics (NasdaqGS: UTHR) Option Symbol: UTHR110716P55 Limit Order Price: $0.50 or less ($50 per contract) Directional View for Underlying Stock: Closing Position Options for Income Portfolio: Conservative Income I am not recommending selling to close the July $50 put as part of a spread because it […]… Read More