Financial Investment Strategies Index
Over the past 35 years of investing I have developed many financial investment strategies which I have succsessfully used to profit from stocks and options. This is my financial investment strategies index. This ongoing index is updated as each new financial investment strategy and article become available.
PUT SELLING:
My favorite financial investment strategy is Put Selling. Select this Put Selling link to be redirected to all articles dealing with put selling.
COVERED CALLS:
Deep In The Money Calls
Deep In The Money Calls is not a strategy that will get an investor rich. But Deep In The Money Calls can be an exceptional strategy to consider in a bear market. Deep In The Money Calls can allow an investor to stay with a stock through a bear market turbulence and come out at the other end with his capital still intact and still retaining his stock. It’s not a strategy for those seeking optimum profit potential but it works very well for long term investors who want to hold onto long term positions in stocks, have some of his capital returned while watching stocks fall in bear markets. Deep In The Money Calls offers profit and a great deal of protection.
Steps To Profitably Roll Covered Calls Down
This article looks at the successful use of rolling covered calls down to protect a stock and continue to earn the dividend and some call premium income all the while going through a severe bear market. This type of financial investment strategy can pay big dividends for the investor who learns how to profitably roll covered calls down. The trades are actual trades from CAT Stock during the 2008 bear market when the stock lost more than 50% of its value, yet the investor ended up retaining the stock and having more than 35% of her original capital returned to her in the downturn. This is an excellent example of the power of learning how and when to roll covered calls down.
How To Get A Better Dividend Through Using Covered Calls
In this article looking at covered calls on a dividend paying stock, I look at how covered calls are used to improve the financial investment income earned by an investor holding Illinois Tool Works Stock (ITW Stock) and protecting his stock position from both loss and exercise.
How To Decide When, Where and How To Roll Covered Calls
This article looks at CAT Stock (Caterpillar) as I look at the decision making process that an investor can use to determine when to roll covered calls forward, where to roll them, in other words which month and what strikes to consider and how to roll covered calls for the best profit, protection and future profit potential. This is the kind of financial investment strategy that can not only earn decent profits but also allow an investor to ride a bear market out and retain his shares throughout the bear market.
Earn 3% In One Month With In The Money Covered Calls
This article looks at a covered call trade on Microsoft stock that will earn 3% for 1 month. This financial investment strategy is presented here since it can be applied to numerous stocks.
Rolling Covered Calls Down On A Declining Stock
When a stock is in a serious decline, I believe strongly that investors are better off getting out early or purchasing protective puts as part of the ongoing financial investment strategy. But some investors hope to hold the stock long term and are not interested in purchasing protective puts. Many investors feel that buying protective puts is lost capital if the stock should recovery. In this article I look at rolling covered calls down on a declining stock in order to recover much of the lost capital.
Staying Positive In A Market Crash
In this financial investment article two investors approached the collapse of Bank Of America in 2008, differently. The first trader sold calls below his cost basis and if exercised, bought back into the stock with whatever capital he had acquired in the exercise. The other trader continued to average down whenever he could no longer sell covered calls. This excellent article shows the importance of staying positive when caught in a collapsing market and retaining the original financial investment objective and goal.
OTHER STRATEGIES:
LEARN FROM THE BEAR – Series of Articles:
Stocks studied are:
Royal Bank Stock
Johnson and Johnson Stock
Cat Stock
This is a series of articles which looks at stocks and the story behind their respective charts. By following chart patterns and studying charts in bear markets, investors can learn what strikes to consider selling puts against and what price to consider buying stocks at. Bear markets are scary but instead of fearing them investors need to learn to embrace the bear. By reading these articles, investors can understand and learn an easy method for applying simple chart patterns to pick strike levels and calculate whether or not a stock is worth buying during a bear market, a correction or even a stock market collapse. Investors learn that there is nothing to fear in a bear market except missing some great profit making potentials.
How To Play Options In A Bear Market
In this article I reply to a reader about how to use options for superior returns while protecting against losses in a bear market.
The Collar Strategy – Understanding The Pros and Cons and Applying It Successfully
In a bear market investors look to still profit but protect their stock positions from possible downside damage. This article looks at the collar strategy and discusses the pros of using the collar strategy and the cons. It then goes on to study different methods to apply the collar strategy using a real example with Apple Stock.
Moving Averages On Cisco Stock
In this article from a reader, he presents how he used the 10-20-30 Moving Averages Rule for Trading Cisco stock. It covers the period from 2006 to 2008.
Long Straddle
A Long Straddle is a pretty simple trade. Almost always, call and put options at the same strike are purchased. The strike chosen is usually at the money. The strategy is that by holding puts and calls and going out a month or more, the investor will benefit from volatility in the stock. If the stock moves up or down wide enough, the straddle will be profitable. By going out at least a month or more, this affords time for the straddle to be profitable. In this article an investor friend presents his preferred long straddle investing method. He sent this straddle trade for me to put on the site to show how powerful options can and often are. He felt it may be of interest to other investors.
Bull Put Spread Explained
Bull put spread strategy is more conservative than put selling with defined losses established right at the outset. The bear put spread is popular among option investors and is in wide use. Yet it is often not understand by many option investors which is a shame since while it may not at times provide as high an income as put selling, the fact that maximum losses are known at the time of establishing the trade can make a very big impact on a portfolio. Like any option strategy there are many variations to the bull put spread that offer even more income and protection. This article looks at Cat Stock and demonstrates a bull put spread.
MISCELLANEOUS STRATEGY ARTICLES:
The Importance Of A Plan, Goal & Objective
This article looks at a trade on Microsoft stock. The purpose of writing this is to show the technicals tools used to determine price points and timing to get into the trade and out of the trade. The article explains the importance of setting up a plan prior to the trade, and the significance of having clear goals and objectives in order to be consistent in profiting from investing.
Early Warning Tools To Spot A Collapsing Stock
This article is designed to show the tools I use to try to avoid holding or selling puts on a stock that is on the verge of collapsing so hard that it leaves me with huge losses. These tools have saved my portfolio many times, particularly in bear markets.
Using The Earl Warning Tools To Spot A Collapsing Stock
When a stock collapsing 7% in a day I bring out the early warning tools and have a look at the stock. In this actual ongoing trade, YUM Stock fell 7% in a single day on Sept 29 2011. Here are the steps I take to examine the stock and determine if it is time to close the trade or whether it is an opportunity for a terrific gain when the stock bounces back.
Understanding The VIX Index
In this article I discuss using the VIX Index to gauge market direction in order to profit from market volatility and swings.
The Cautious Bull
I believe stocks have to perform based on earnings or at least the belief that earnings are improving. Once the Fed money taps dries up, the floor under this market may get a little “creaky”. (Read the article Dance Near The Exit) Remember that markets are driven by fear and big players with billions of dollars in the market – the so called “smart money”. A whiff of a trouble and they will bail like they are fleeing the Titanic. In my opinion “smart money” is really no smarter than the retail investor, but their sheer size of holdings can push a stock to extremes both up and down if they are fearful. I have always believed that it isn’t fear and greed that drives stocks, but FEAR alone. There is fear of missing out on the rally and fear of losing capital in a decline. My strategy of the cautious bull is designed to combat this volatility and the possibilities of declines.
Averaging Down In Stocks
The problem for most investors is not knowing when to sell their “winning” stocks. Therefore when a stock turns down most hold on hoping for a recovery and then they convince themselves they will “sell to get out” in any rally. I believe there is a better way, depending on the stock selected, to recover quicker, move back to a profit position and then decide whether to “get out” and seek a different stock. To do this I have learned to combine options – namely covered calls and selling puts to assist in averaging down in a losing stock in order to generate a positive return. But for this type of averaging down strategy to be successful I have developed 7 rules which I follow.
Using The Ultimate Oscillator To Time An Entry Level On A Stock
In this article using YUM Stock I look at the stock after a fall to show how through using the ultimate oscillator an investor can determine if the stock is a geat buying opportunity or just on its way lower.
“Squeaker” Option Trade On JNJ
A “Squeaker trade” is one of those trades where you have sold an option (or bought one) and the stock is hovering right at the Option Strike Price by expiry. So what’s the best thing to do.
Dividend Stocks That Cut Dividends
The majority of retail investors are not stock traders but are are really more dividend investing or dividend stock investors. Their investments really are comprised of dividend stocks or dividend stock funds that make up a dividend stock portfolio. Dividend stock investing has been popular for decades. Many dividend investors seek high yield dividend stock and many others search for the highest paying dividend stock. But developing a dividend investment strategy often can result in disaster when their is a dividend cut. When this happens, many investors sell their dividend stock often incurring large losses and regretting their dividend investment strategy. I believe this is a mistake. I believe many investors need to rethink their dividend investment strategy. That is the goal of this 4 part article.
How To Use The Ultimate Oscillator To Pinpoint A Stock About To Bounce
In this article, using YUM Stock I look at the steps to take and how to apply the Ultimate Oscillator in determining whether or not a stock is about to bottom and bounce back.
Hedging Market Downturns With SPY Puts
When markets are in a downturn I turn to the SPY Puts to hedge my portfolio. This 3 part series presents how I use the SPY Puts to protect my portfolio against large losses in market pullbacks.
Defensive Stock Investing to Beat The Smart Money
What should a small investor do when it comes to defensive stock investing? What can the retail investor do to beat the smart money at their own game. As anyone who frequents my site knows, I believe in staying within large cap, blue chip dividend payers. This 3 part series looks at the strategies I use when I invest in defensive stocks.
Moving Averages Trading Strategy Using The 10 Day SMA and 20-30 Day EMAs
The 10-20-30 Moving Average Trading Strategy uses moving averages cross-over points on a stock chart to try to pinpoint specific times to sell Calls, sell Puts, or buy back both sold Calls and/or Puts to lock in profit and avoid assignment or exercise. The objective of this type of trading strategy is to capture the majority of the value of the sold option. It uses the 10 day simple moving average and 20 and 30 day exponential moving averages to time entry and exit points. Microsoft stock is used for the example and there are two actual trades also available, RIM Stock and Cisco Stock to show the 10-20-30 Moving Averages Trading Strategy in action over a long period of time.
Dance Near The Exit
This article from April 2011 looks at the Federal Reserve’s Party in the guise of Quantitative Easing One and last year Two. In the article I discuss why it is best to folow the trend in such an instance but be fully aware that you want to dance near the exit and get out before the balloons burst and the lights turn off as the party ends.
My Strategy Explained
In this article I describe the overall strategy I have used for the past 3 decades to build my portfolios.
The Importance Of Strategy
The world is always fraut with problems and equity and bond markets always reflect them. Waiting for the perfect market environment in order to invest would mean never being invested. Financial Investment portfolios need sound strategies which protect and provide growth despite the endless barrage of financial and political calamities. The problem for many investors though is what financial investment strategy to use. In this article I discuss how I approach a financial investment strategy and tweak it depending on the market environment. I explain how I view keeping a healthy mix of cash, bonds (fixed income) and equities in order to survive in any market environment.
