Wednesday, May 22nd, 2019

Can You Lose Money Trading Options?

Warren Buffett has famously said that the first rule of investing is not to lose money and the second rule is not to forget the first! Does this apply to options as well? Can you lose money trading options? There are two answers: no and yes. How is that?
Limit Losses by [...]

Selling Call Options without Owning Stock

Options traders often profit from selling call options without owning stock. In this variety of uncovered options trading the trader believes that the price of the equity underlying the options contract will remain the same or fall in price. The trader receives a premium for selling the call contract. This is [...]

What Is Commodity Options Trading?

Buying and selling futures on oil, gold, or wheat can be very profitable. It can also be risky. Many commodity traders buy options to hedge risk. But what is commodity options trading? Traders buy and sell futures on commodities such as oil, gold, and agricultural products. If they wish to buy [...]

Profit from Selling Calls

You have invested in Xyz Corporation and the stock has risen nicely. However, your own fundamental and technical analysis tells you that the stock is likely to level off or even experience a correction before continuing upward. You do not want to sell the stock as you firmly believe that it [...]

Simplify Commodity Trading with Binary Options

What makes the binary options so exciting is that they can be used for a broad range of assets, including commodities, indices, currencies and stocks. They make it easy to trade large provisions throughout the world and those who know how to take advantage of the speculative market will reap generous rewards. Making overnight profits [...]

Buy Calls on Alcoa

Although lower second quarter earnings drove Alcoa’s stock price lower news of a new contract with Airbus may be good reason to by calls on Alcoa. Aluminum prices are at historic lows which is what drove down aluminum profits for the company in the second quarter of this year. However, its presence in aerospace is [...]

Calls or Puts on Facebook

Now that the social media site has gone public with something of a flop, is it time for calls or puts on Facebook? Facebook stock has only been available for trading for a little over a month. The Facebook IPO went over $40 in the first hours of trading and then fell to less than [...]

Puts on Oil

Puts on oil outnumbered calls recently as options traders anticipated a fall in oil prices. As those engaged in Euro options trading are aware, industrial production in Europe, China and North America, is down. As industrial production falls so does oil consumption. Options traders use puts on oil in order to leverage their investments [...]

Puts on LinkedIn

Puts on LinkedIn were recently selling for nearly $20 for a $75 stock. The LinkedIn IPO started at $45 and rose to over $90 on the first day. This is on a stock with a thousand to one price to earnings ratio. The fact that puts on LinkedIn were priced so high would seem to [...]

How Do Puts and Calls Work?

Puts and calls are types of options contracts. How do puts and calls work? In trading both puts and calls the options trader pays for the right to sell using a put option or right to buy using a call option. Puts and calls are used in trading stocks, commodities, or foreign exchange. The buyer [...]