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Terry's Tips Stock Options Trading Blog

Using Investors Business Daily to Create an Options Strategy

February 20th, 2017

Today I would like to share an idea that we are using in one of our Terry’s Tips’ portfolios. We started this portfolio on January 4, 2017, and in its first six weeks, the portfolio has gained 30% after commissions. That works out to about 250% for the whole year if we can maintain that average gain (we probably can’t keep it up, but it sure is a good start, and a positive endorsement for the basic idea).

Terry

Using Investors Business Daily to Create an Options Strategy

IBD publishes a list which it calls its Top 50. It consists of companies which have a positive momentum. Our idea is to check this list for companies that we particularly like for fundamental reasons besides the momentum factor. Once we have picked a few favorites, we make a bet using options that will make a nice gain if the stock stays at least flat for the next 45 – 60 days. In most cases, the stock can actually fall a little bit and we will still make our maximum gain.

The first 4 companies we selected from IBD’s Top50 list were . . .

An Update on Our Last Trade and a New One on AAPL

February 5th, 2017

About a month ago, I suggested an options spread on Aetna (AET) that made a profit of 23% after commissions in two weeks. It worked out as we had hoped. Then, two weeks ago, I suggested another play on AET which would make 40% in two weeks (ending last Friday) if AET ended up at any price between $113 and $131. The stock ended up at $122.50 on Friday, and those of us who made this trade are celebrating out 40% victory. (See the last blog post for the details on this trade.)

Today, I am suggesting a similar trade on Apple (AAPL). It offers a lower potential gain, but the stock can fall in price by about $9 and the gain will still come your way.

Terry

An Update on Our Last Trade and a New One on AAPL

This trade on APPL will only yield about 30% after commissions, and you have to wait six months to get it, but the stock can fall over $8 during that time, and you would still make your 30%.

Another Interesting Short-Term Play on Aetna (AET)

January 20th, 2017

Ten days ago, I sent you a note showing how you could make 23% on an options spread on Aetna (AET) if the stock closed at any price above $118 today. Back then, it was trading at $122.67. The day is not yet over right now, but AET is trading at $122 with an hour to go until closing, so it seems safe to say that the 23% will be enjoyed by everyone who placed the trade.

Today, I would like to suggest another trade on AET that will end two weeks from today. It will make 40% on . . .

An Interesting Short-Term Play on Aetna (AET)

January 11th, 2017

We are always on the lookout for unusual option prices that might indicate a better-than-usual investment opportunity. I would like to share one of those recent opportunities with you, one I personally acted on and passed on to Terry’s Tips subscribers last Saturday. It involves the venerable insurance company, Aetna.

Terry

An Interesting Short-Term Play on Aetna (AET)

This week, we are looking at Aetna (AET), a health care benefits company. If you check out its chart, you can see that it does not historically make big moves in either direction, especially down:

How to Make 30% on 5 Blue-Chip Companies in 2017 Even if They Fall by 10%

January 3rd, 2017

Today, we set up a new portfolio at Terry’s Tips that I would like to tell you about. It is our most conservative of 9 portfolios. It consists of selecting 5 blue-chip companies which pay a dividend between 2% and 3.6% and which appear on at least two top analysts’ “top 10” lists for 2017. This portfolio is designed to gain 30% for the year, and we can know in advance exactly what each of the 5 spreads will make in advance. For most of these companies, they can fall by 10% over the course of the year and we will still make our 30% gain.

We are also repeating our best-ever offer to come on board before January 11 rolls around.

Terry

How to Make 30% on 5 Blue-Chip Companies in 2017 Even if They Fall by 10%

The spreads we are talking about are vertical put credit spreads. Once you have found a company you like, you select a strike price which

Invest in Yourself in 2017 (at the Lowest Rate Ever)

December 30th, 2016

To celebrate the coming of the New Year I am making the best offer to come on board that I have ever offered. It is time limited. Don’t miss out.

Invest in Yourself in 2017 (at the Lowest Rate Ever)

The presents are unwrapped. The New Year is upon us. Start it out right by doing something really good for yourself, and your loved ones.

The beginning of the year is a traditional time for resolutions and goal-setting. It is a perfect time to do some serious thinking about your financial future.

I believe that the best investment you can ever make is to invest in yourself, no matter what your financial situation might be. Learning a stock option investment strategy is a low-cost way to do just that.

As our New Year’s gift to you, we are offering our service at the lowest price in the history of our company. If you ever considered becoming a Terry’s Tips Insider, this would be the absolutely best time to do it. Read on…

How to Make 40% a Year Betting on the Market, Even if it Doesn’t Go Up

December 19th, 2016

This is the time of the year when everyone is looking ahead to the New Year. The preponderance of economists and analysts who have published their thoughts about 2017 seem to believe that Trump’s first year in the oval office will be good for the economy and the market, but not great.

Today I would like to share an option trade I have made in my personal account which will earn me a 40% profit next year if these folks are correct in their prognostications.

Terry

Comparing Calendar and Diagonal Spreads in an Earnings Play

December 5th, 2016

Last week, in one of our Terry’s Tips portfolios, we placed calendar spreads with strikes about $5 above and below the stock price of ULTA which announced earnings after the close on Thursday. We closed out our spreads on Friday and celebrated a gain of 86% after commissions for the 4-day investment. It was a happy day.

This week, this portfolio will be making a similar investment in Broadcom (AVGO) which announces earnings on Thursday, December 8. I would like to tell you a little about these spreads and also answer the question of whether calendar or diagonal spreads might be better investments.

Terry

Comparing Calendar and Diagonal Spreads in an Earnings Play

Using last Friday’s closing option prices, below are the risk profile graphs for Broadcom (AVGO) for options that will expire Friday, December 9, the day after earnings are announced. Implied volatility for the 9Dec16 series is 68 compared to 35 for the 13Jan17 series (we selected the 13Jan17 series because IV was 3 less than it was for the 20Jan17 series). The graphs assume that IV for the 13Jan17 series will fall from 35 to 30 after the announcement. We believe that this is a reasonable expectation.

Update on Oil Trade (USO) Suggestion

December 2nd, 2016

On Monday, I reported on an oil options trade I had made in advance of OPEC’s meeting on Wednesday when they were hoping to reach an agreement to restrict production. The meeting took place and an agreement was apparently reached. The price of oil shot higher by as much as 8% and this trade ended up losing money. This is an update of what I expect to do going forward.

Terry

Update on Oil Trade (USO) Suggestion

Several subscribers have written in and asked what my plans might be with the oil spreads (USO) I made on Monday this week. When OPEC announced a deal to limit production, USO soared over a dollar and made the spreads at least temporarily unprofitable (the risk profile graph showed that a loss would result if USO moved higher than $11.10, and it is $11.40 before the open today). I believe these trades will ultimately prove to be most profitable, however.

Benefiting From the Current Uncertainty of Oil Supply

November 29th, 2016

The price of oil is fluctuating all over the place because of the uncertainty of OPEC’s current effort to get a widespread agreement to restrict supply. This has resulted in unusually high short-term option prices for USO (the stock that mirrors the price of oil). I would like to share with you an options spread I made in my personal account today which I believe has an extremely high likelihood of success.

Terry

Benefiting From the Current Uncertainty of Oil Supply

I personally believe that the long-run price of oil is destined to be lower. The world is just making too much of it and electric cars are soon to be here (Tesla is gearing up to make 500,000 next year and nearly a million in two years). But in the short run, anything can happen.

Meanwhile, OPEC is . . .

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Success Stories

I have been trading the equity markets with many different strategies for over 40 years. Terry Allen's strategies have been the most consistent money makers for me. I used them during the 2008 melt-down, to earn over 50% annualized return, while all my neighbors were crying about their losses.

~ John Collins