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  • 1. All About Stock Options

    1. All About Stock Options

    My goal is to give you a basic understanding of what stock options are all about without hopelessly confusing you with unnecessary details. I have read dozens of books on stock options, and even my eyes start glazing over shortly into most of them.

  • 2. Check Out Auto-Trade

    2. Check Out Auto-Trade

    Auto-Trade is a service offered by several on-line brokers. Auto-Trade makes it possible for an investor to carry out an options strategy in his own account without becoming an options guru or making all the trades on his or her own.

  • 3. Never Buy a Mutual Fund

    3. Never Buy a Mutual Fund

    Never buy a mutual fund unless it is a no-load index fund with the lowest cost structure. (I will tell you where to find it later.)

  • 4. Turbocharge Your IRA

    4. Turbocharge Your IRA

    Most smart people have set up a Roth IRA, 401(k), or other qualified retirement program. For some of them, it may be the only stock market investment they own.

  • 5. Double Your Money the Lazy Way

    5. Double Your Money the Lazy Way

    In spite of the odds against winning, many people seem to like to invest in individual stocks – sort of like picking horses at the race track.

  • 6. The 10K Strategy

    6. The 10K Strategy

    The 10K Strategy is my favorite investment strategy. I have used it to make an average of over 50% a year for three out of four consecutive years. I have now added a twist to the strategy so that annual returns might be less than those years but there should be a much higher likelihood of its succeeding.

  • 7. Trading ETF Options

    7. Trading ETF Options

    Exchange-Traded Funds, or ETFs, are index funds that trade just like stocks on major stock exchanges. All the major stock indexes have ETFs based on them, including: Dow Jones Industrial Average (DIA), Standard & Poor's 500 Index (SPX), and Nasdaq 100 Composite (QQQQ).

  • 8. Other Stock Option Resources

    8. Other Stock Option Resources

    Learn about some of my favorite stock option resources.

Get ahead in the market.

Terry’s Tips carries out an options strategy designed to significantly outperform the market and other conventional investments.

The strategy does not require picking the right stocks or timing the market. It primarily trades options on the S&P 500 (SPY) and can be used in an IRA.

Terry's Tips Stock Options Trading Blog

June 9, 2019

Has the Tide Turned for Five Below Inc (FIVE)?

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.

Terry

Has the Tide Turned for Five Below Inc (FIVE)?

Several analysts are looking for more upside in FIVE, here are two of them – Hedge Funds Have Never Been This Bullish On Five Below Inc and I’m Sorry, But the Five Below Stock Selloff Is Overdone.

FIVE fell under a little bit of pressure after reporting earnings in the past week. However, the stock recovered on Friday, resulting in a bullish engulfing candle. This pattern often signals a reversal but what makes it even more significant is that the pattern occurred following a test of important support. Specifically, from the 200-day moving average and the lower bound of a trend channel. A second reversal candlestick is seen on a weekly chart that makes an even strong case that FIVE might turn higher from here.

If you agree there's further upside ahead for FIVE, consider this trade which is a bet that the stock will continue to advance over the next five weeks, or at least not decline very much.

Buy To Open FIVE 12JUL19 124 Puts (FIVE190712P124)
Sell To Open FIVE 12JUL19 127 Puts (FIVE190712P127) for a credit of $1.33 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when FIVE was trading near $127.50.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $130.50 and your broker would charge a $300 maintenance fee, making your investment $169.50 ($300 – $130.50).  If FIVE closes at any price above $127 on July 12, both options would expire worthless, and your return on the spread would be 77% (878% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

June 4, 2019

Amazon (AMZN) Is Testing a Major Technical Support Area, Is It Time to Buy?

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.

Terry

Amazon (AMZN) Is Testing a Major Technical Support Area, Is It Time to Buy?

Some analysts did a double take this past week when a Piper Jaffray analyst said AMZN could reach $3000. Granted, his views are over a few years, but the article stands to spark some buying interest.  Take a look at the following article for full details – Can Amazon Really Reach $3000? You Bet.  Also take a look at this article which discusses an upside target from another analyst, and contains a video of Yahoo staff discussing the Piper Jaffray call – Amazon Stock Poised for Continued Growth; Here’s Why.

As indicated by the headline, Amazon is seen testing a significant support area.  Specifically, there are three items that are lined up to create a confluence – The 100-day moving average, 200-day moving average, and a horizontal level.  It’s quite rare to have all three lined up pretty much perfectly at the same price point and probabilities favor that buyers will be there to defend it.

If you agree there's further upside ahead for AMZN, consider this trade which is a bet that the stock will continue to advance over the next five weeks, or at least not decline very much.

Buy To Open AMZN 5JUL19 1770 Puts (AMZN190705P1770)
Sell To Open AMZN 5JUL19 1775 Puts (AMZN190705P1775) for a credit of $2.25 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when AMZN was trading near $1775.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $222.50 and your broker would charge a $500 maintenance fee, making your investment $277.50 ($500 – $222.50).  If AMZN closes at any price above $1775 on July 5, both options would expire worthless, and your return on the spread would be 80% (913% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

May 28, 2019

Comcast (CMCSA) Receives An Aggressive Price Upgrade

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.

Terry

Comcast (CMCSA) Receives An Aggressive Price Upgrade

TD Securities recently upgraded their price targets for CMCSA to $57.  That’s more than 30% upside from current levels.  They weren’t the only ones to raise targets, full details can be found here.  Also have a look at this Zack’s article that makes a case for why timing is right to get into Comcast stock – Here is Why Growth Investors Should Buy Comcast Now.

From a technical perspective, CMCSA has been consolidating between two horizontal levels for about a month.  Sideways consolidations often occur following a lengthy uptrend as seen in this stock.  Downside support is found at $42.17 followed by the 50-day moving average which falls just below the level, currently near $41.71.  An upside break above $44 resistance would signal that the uptrend has resumed.

If you agree there's further upside ahead for CMCSA, consider this trade which is a bet that the stock will continue to advance over the next six weeks, or at least not decline very much.

Buy To Open CMCSA 5JUL19 40 Puts (CMCSA19075P40)
Sell To Open CMCSA 5JUL19 42.05 Puts (CMCSA19075P42.05) for a credit of $0.72 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when CMCSA was trading near $43.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $69.50 and your broker would charge a $205 maintenance fee, making your investment $135.50 ($205 – $69.50).  If CMCSA closes at any price above $42.05 on July 5, both options would expire worthless, and your return on the spread would be 51% (477% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

Making 36%

Making 36% – A Duffer's Guide to Breaking Par in the Market Every Year in Good Years and Bad

This book may not improve your golf game, but it might change your financial situation so that you will have more time for the greens and fairways (and sometimes the woods).

Learn why Dr. Allen believes that the 10K Strategy is less risky than owning stocks or mutual funds, and why it is especially appropriate for your IRA.

Order Now

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TD Ameritrade

This Chicago brokerage firm with the unlikely name thinkorswim, Inc. by TD Ameritrade is considered by many to be the best option-friendly broker. For openers, they have extremely good analytic software and their option trading platform is exceptional. Thinkorswim Mobile has been called the best mobile app in the industry. In 2017, TD Ameritrade received 4 stars out of 5 in the annual Barron`s* Best Online Brokers Survey. TD Ameritrade was tops as an online broker for long-term investors and for novices. The company is the only broker that receives the highest 5.0 score for research amenities among all firms participated in the ranking last year.

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Options are not suitable for all investors as the special risks inherent to options trading my expose investors to potentially rapid and substantial losses. Please read Characteristics and Risks of Standardized Options before investing in options

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