from the desk of Dr. Terry F Allen

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Terry's Tips Stock Options Trading Blog

How Option Prices are Determined

April 21st, 2014

Last week was one of the best for the market in about two years. Our option portfolios at Terry’s Tips made great gains across the board as well. One portfolio gained 55% for the week, in fact. It is fun to have a little money tied up in an investment that can deliver those kinds of returns every once in a while.

This week I would like to discuss a little about what goes into an option price – what makes them what they are?

Terry

How Option Prices are Determined

Of course, the market ultimately determines the . . .

An Interesting Calendar Spread Trade Idea

April 14th, 2014

Today I would like to share with you an investment I made in my personal account just today. It involves buying three calendar spreads and waiting about a month to see if you hit the jackpot. See if you agree with me that it is a potentially great trade.

Terry

An Interesting Calendar Spread Trade Idea

The underlying company is Keurig Green Mountain Coffee (GMCR). I have traded options on this company almost every week for the last few years. I like it because the options carry an exceptionally high implied volatility (IV) because the stock has been so volatile.

Using Puts vs. Calls for Calendar Spreads

April 7th, 2014

I like to trade calendar spreads. Right now my favorite underlying to use is SVXY, a volatility-related ETP which is essentially the inverse of VXX, another ETP which moves step-in-step with volatility (VIX). Many people buy VXX as a hedge against a market crash when they are fearful (volatility, and VXX. skyrockets when a crash occurs), but when the market is . . .

How to Play War Rumors

March 10th, 2014

Last week, on Monday, there were rumors of a possible war with Russia. The market opened down by a good margin and presented an excellent opportunity to make a short-term gain. Today I would like to discuss how we did it at Terry’s Tips and how you can do it next time something like this comes along.

Terry

How to Play War Rumors

When the market opens up at a higher price than the previous day’s highest price or lower than the previous day’s lowest price, it is said to have a gap opening. Gap openings unusually occur when unusually good (or bad) news has occurred. Since there are two days over which such events might occur on weekends, most gap openings happen on Mondays.

Legging Into a Short Iron Condor Spread

March 3rd, 2014

Today I would like share with you the results of an actual trade recommendations I made for my paying subscribers on January 4th of this year and how subsequent price changes have opened up option possibilities that can further improve possibilities for a first investment.

Please don’t get turned off by what this new spread is called.

Terry

Legging Into a Short Iron Condor Spread

In my weekly Saturday Report that I send to paying subscribers, on January 4, 2014 I set up an actual demonstration portfolio in a separate trading account at thinkorswim in which I made long-term . . .

Another Interesting Options Bet on Google

February 24th, 2014

Just over two months ago, shortly before Christmas, I suggested that you might consider making a bet that Google (GOOG) would be higher in one year than it was then. I figured the chances were pretty good that it might move higher because it had done just that in 9 of its 10 years in existence.

I made this bet in my personal account and also in a real account for Insiders at Terry’s Tips to follow, or mirror in their own accounts. The stock has moved up by about $90 since then and the bet is looking like it might pay off.

Today I would like to discuss either taking a profit early or doing something else with Google if you feel good about the company as I do.

Terry

Another Interesting Options Bet on Google

In my January 4, 2014 Saturday Report sent to . . .

Follow-Up on Green Mountain Coffee Roasters

February 10th, 2014

Twice in the past three weeks I told everyone why I was bullish on Green Mountain Coffee Roasters (GMCR) and how I was playing the options prior to their earnings announcement last week.

If anyone noticed, the stock is trading about 40% higher now after the company announced a 10-year deal with Coke for selling single portions of Coke.

This was one of those . . .

An Interesting Calendar Spread Play

February 5th, 2014

Today after the close, one of my favorite stocks, Green Mountain Coffee Roasters (GMRC) , announces earnings. I am taking quite a chance telling you about another option spread investment that I made this week because if the stock tanks after today’s announcement, I won’t be looking so good.

The idea I am suggesting can be used for any stock you . . .

A Post-Earnings Play on Starbucks

January 27th, 2014

I am a coffee lover, and not only am I adding to my Green Mountain Coffee Roasters (GMRC) spreads discussed last week, I am adding two new spreads this week in Starbucks (SBUX). By betting on both these coffee companies, I end up not caring whether everyone is drinking coffee at home or at their favorite Starbucks café, just as long as they continue to enjoy the java.

And as I sip away at my 4+ cup daily coffee allotment, I can feel I am helping . . .

An Earnings Play on Green Mountain Coffee Roasters

January 22nd, 2014

Today I would like to tell you about an actual trade I made today in my personal account as well as two Terry’s Tips portfolios. The underlying is Green Mountain Coffee Roasters (GMCR) which is located in my home state of Vermont and is one of my favorite companies.

This trade will make a nice gain if the stock stays flat or moves higher by any amount between now and 17 days from now, just after earnings are announced.

If the company disappoints in . . .

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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