Covered Calls, Naked Puts Combo For Severe Stock Decline

 Covered Calls, Profit And Income Strategies, Put Selling, Reader Questions
May 112013
 
Covered Calls, Naked Puts Combo For Severe Stock Decline

Often when a core holding stock is in a serious decline one of the first things a lot of investors and analysts will advise is that you should average down. They are absolutely wrong. You should NEVER average down on a declining stock until there are clear signs that the stock decline has ended. Recently an investor wrote me regarding SINA Stock. The stock since 2011 has collapsed almost 50% and continues in a bear market. SINA Corporation (SINA) is an online media company serving China and global Chinese communities. It is currently / Read More

Pitney Bowes Stock Dividend Cut Shows Investors Need Tools To Spot Collapsing Stocks

 Editor's Picks, Profit And Income Strategies
Apr 302013
 
Pitney Bowes Stock Dividend Cut Shows Investors Need Tools To Spot Collapsing Stocks

This morning Pitney Bowes Stock (PBI) plunged with income collapsing 50% from the same quarter last year. First-quarter net income to common stockholders was $67.51 million (33 cents a share)  dropping from $158.67 million, or $0.79 a share last year. Net income from continuing operations falling year-over-year to $74.16 million, from $145.54 million. The dividend was slashed 50% to just 18.75 cents. The Pitney Bowes Stock dividend was the main focus of so many investors that most lost sight of the stock itself. This is typical of investors who seek large dividends and / Read More

Naked Calls Riskier Than Naked Puts?

 Naked Calls, Profit And Income Strategies
Apr 282013
 
Naked Calls Riskier Than Naked Puts?

My recent article on Naked Calls generated a lot of responses from investors. An interesting comment from one investor discusses the risk of a takeover to those investors holding naked calls. Let’s look at his comment and see if there is a solution to his concern on using naked calls. Naked Calls Are Riskier Than Naked Puts? Comment from investor: Selling naked calls carries a much greater risk then selling naked puts, there is no limit how high the price can move, there is always the risk of a takeover, yes then you / Read More

Profit and Income Strategies Index

 Profit And Income Strategies
Apr 272013
 
Profit and Income Strategies Index

This profit and income strategies index presents an ongoing listing of all investing strategies from fullyinformed.com. This index is updated with each release of additional profit and income strategy articles. Over the past 40 years of investing I have used and profited from all these profit and income strategies at various times and on a wide variety of stocks and ETFs. Within this index are subindexes of other profit and income strategies which due to the number of strategies within some subindexes are better served by having their own index pages. Consider subscribing / Read More

Tips On Avoiding Losses When Using IWM ETF with the Trading For Pennies Strategy

 IWM ETF Russell 2000, Profit And Income Strategies
Apr 262013
 
Tips On Avoiding Losses When Using IWM ETF with the Trading For Pennies Strategy

When using the Trading for Pennies Strategy with the IWM ETF the goal is to earn 6 cents or more, but it is easy to quickly end up with losses. When you have bought 50 to 100 options, even a 10 cent loss means losing capital. 10 cents on 100 contracts in IWM ETF Options is $1000.00. If for example you have been trading for 5 cent gains in the Russell 2000 ETF, just one loss of 10 cents wipes out 2 gains. Eventually by continually taking losses an investor will begin to / Read More

Handling Unwanted Assignment of Shares – Revert The Trade Back

 Editor's Picks, Profit And Income Strategies
Apr 182013
 
Handling Unwanted Assignment of Shares - Revert The Trade Back

Sometimes when I get assigned shares and I do not want them, I simply revert the entire trade back to the original trade. Let me explain. Sometimes investors wait too long before rolling their deep in the money naked puts and are surprised to find they have been assigned unwanted shares. Today I received quite a few emails from investors who were assigned on shares of CLF Stock (Cliffs Natural Resources Stock), ABX Stock (Barrick Stock), NEM Stock (Newmont Mining Stock), APPL Stock (Apple Stock), GOOG Stock (Google Stock) and a host of / Read More

Gold Investing – Mentoring Tips and Profit Strategies

 Barrick Gold (ABX), Collar Option or Married Put, Editor's Picks, Profit And Income Strategies
Apr 132013
 
Gold Investing - Mentoring Tips and Profit Strategies

The continuing drop in gold bullion makes for an interesting discussion on how much gold an investor should hold. There is an old belief that everyone should have some gold in their portfolio. I hope through this article I can show you why I believe simply holding gold is a mistake without a plan to benefit from trading any gold investment. Recently an investor wrote to me wondering how much gold he should hold in his portfolio.  We corresponded several times so I could get a better understanding of this investor’s needs. The / Read More

Nucor Stock Trade Shows The Value Of Planning

 Nucor Stock (NUE), Profit And Income Strategies
Apr 042013
 
Nucor Stock Trade Shows The Value Of Planning

Nucor Stock has been in my portfolio since 2010. I started Put Selling this stock at a time when the steel companies had been decimated by the recession and the credit crisis. Nucor stock though stood out to me because it is incredibly well-managed. It is one of the few base industrial companies that refused to cut its dividend in 2008-2009 and indeed increased it in the face of an extremely harsh recession. They put together a plan to survive the economic malaise and to return to profitability. It was planning that kept / Read More

Deep In The Money Puts Rescue Strategy With Naked Calls

 Profit And Income Strategies
Mar 252013
 
Deep In The Money Puts Rescue Strategy With Naked Calls

This is a FullyInformed Members strategy article delving into a rescue strategy for a trade where the investors got caught in a downturn and is holding deep in the money puts. Once in a while a stock falls so quickly that investors who have sold naked puts don’t have the chance to buy them back and roll down. Other times they do buy them back and roll down but the collapse of the stock is so swift that they cannot roll down quick enough or there may not be enough put premiums to / Read More

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Understanding Daily Volume and Price

 Profit And Income Strategies
Mar 172013
 
Understanding Daily Volume and Price

The first article in this series lays out an understanding of daily volume and price. This article is from a series I am working on for trading strategies based on volume which I will have on the members site. Volume is the heart of stock market investing. One of the most interesting aspects of Volume is doing a quick daily review to see changes within volume. Investors often ask how they can tell if a stock is under buying or selling pressure daily. When a stock trades, for every seller there is a / Read More

Finding Support In A Stock and How To Profit From It

 Profit And Income Strategies
Mar 132013
 
Finding Support In A Stock and How To Profit From It

Put Selling is a strategy of earning small returns against giving away the right to have someone assigned shares to you at a specified valuations. However you want to be sure to have those valuations at strikes which offer you the best return and the best chance to have the trade end profitably. To that end, finding support levels in a stock is essential, not just to know where to sell puts, but for all the other trade opportunities that it can provide. This article is from the FullyInformed Members Mentoring Tips category / Read More

Put Selling Facebook Stock Again

 Facebook Stock (FB), Profit And Income Strategies
Mar 132013
 
Put Selling Facebook Stock Again

Once more Facebook Stock is under pressure and once more I am back Put Selling the stock. The volatility in Facebook Stock is over 59% which is keeping option premiums higher and continuing to make Put Selling very profitable. In this strategy article I explain the three technical tools I am using to assist my Put Selling and the strategy I keep in place in the event Facebook Stock falls further than I expect. Facebook Stock trades on the NASDAQ under the symbol FB Stock. Facebook Stock is my speculative trade for the / Read More

Put Selling, Straddle, Strangle, Calls – What’s Best For GE Stock

 Profit And Income Strategies
Mar 132013
 
Put Selling, Straddle, Strangle, Calls - What's Best For GE Stock

As everyone knows GE stock was caught in the credit crisis and by March 2009 the stock traded below $6.00. Since then GE Stock has been on the right trajectory as it has slowly climbed back and has now recovered about 50% of the decline but GE Stock is still a long way from $42.00, the highs from September 2007, let alone the highs of 2000 when the stock was trading at $60.00. Nonetheless I have investor friends who bought GE stock prior to 2007 and paid anywhere from $30 to $35. They / Read More

Earning Big Returns On AT&T Stock (T Stock)

 AT&T Stock (T), Profit And Income Strategies
Mar 102013
 
Earning Big Returns On AT&T Stock (T Stock)

Yesterday I wrote about T Stock, my recent Put Selling trades and the rumor of AT&T buying into an Indian telecommunications company which would be a major attempt by AT&T to expand into Asia. Whether the rumor is true or not I do believe AT&T stock represents enormous value for investors who use Put Selling as a principal method of investing. AT&T Stock (T Stock) 2012 Returns An investor who bought T Stock at the low on January 2 2012 for $29.60 and held to sell at the high of $38.58 on September / Read More

VIX Index Trade Strategy Update March 5 2013

 Profit And Income Strategies
Mar 052013
 
VIX Index Trade Strategy Update March 5 2013

An update for FullyInformed Members on my VIX Index Strategy Trade. With today’s push of the markets into record highs, the VIX index continues to pull back. In my last article on the VIX Index Strategy i discussed how I would be changing to a lower strike as the indexes move higher. This is related to previous times when the overall market has reached new heights. A rush higher such as today means that we can take out time for the moment before jumping into this trade. Remember that over-trading this strategy has / Read More

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