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Terry's Tips Stock Options Trading Blog

All About, or at Least an Introduction to Calendar Spreads

August 25th, 2016

This week I would like start an ongoing discussion about one of my favorite option plays. It is called a calendar spread. It is also known as a time spread or a horizontal spread. But most people call it a calendar because that’s where you focus much of your attention while you hold this kind of a spread. On a specific date on the calendar, you discover whether you made or lost money since you first bought the calendar spread. In the next few blogs, I will discuss all sorts of variations and permutations you can make with calendar spreads, but today, we will focus on a bare bones explanation of the basic spread investment.

Terry

All About, or at Least an Introduction to Calendar Spreads

A calendar spread consists of the simultaneous purchase of one option (either a put or a call) and the sale of another option (either a put or call), with both the purchase and the sale at the same strike price, and the . . .

The Difference Between Buying Stock and Trading Options

August 15th, 2016

This week I would like discuss a little about the differences between buying stock and trading options. I would also like to tell you a little about a specific recommendation I made to paying Terry’s Tips subscribers this weekend in my weekly Saturday Report.

Terry

The Difference Between Buying Stock and Trading Options

If the truth be known, investing in stocks is pretty much like playing checkers. Any 12-year-old can do it. You really don’t need much experience or understanding. If you can read, you can buy stock. And you probably will do just about as well as anyone else because it’s basically a roulette wheel choice. Most people reject that idea, of course. Like the residents of Lake Wobegone, stock buyers believe that they are all above average – they can reliably pick the right ones just about every time.

Trading options is harder, and many people recognize that they probably aren’t . . .

Historical Performance of 10K Strategy Stock-Based Portfolios

August 8th, 2016

This week I would like to outline the basic stock option strategy we use at Terry’s Tips where we have created eight portfolios each of which is traded in an actual separate account and is available for Auto-Trade at TDAmeritrade/thinkorswim. Terry’s Tips subscribers can have every trade in these portfolios placed automatically for them in their own thinkorswim accounts through their free Auto-Trade service.
Enjoy the full report.

Terry

Historical Performance of 10K Strategy Stock-Based Portfolios: At Terry’s Tips, we call our options strategy the 10K Strategy. We like to think of it as shorter than a marathon but longer than a sprint. Most people who trade options seem to prefer sprints, i.e., short-term speedy wins (or losses). The basic underlying idea of our 10K Strategy is to . . .

Update on Facebook Earnings Announcement Play

August 1st, 2016

Last week, Facebook (FB) announced earnings which were triple the year-earlier results and were 88% higher than analyst expectations, but the stock barely budged from where it was the day before the announcement. Option players could celebrate, however. The actual portfolio at Terry’s Tips where we trade FB options gained 45.8% for the week. We have a lot of happy subscribers who follow this portfolio either on their own or through the Auto-Trade service at thinkorswim.

As good as 45% for a single week might be, you could have done even better if you had followed a trade I told you about 2 ½ months ago. That is the story I would like to share with you today.

Happy trading.

Terry

Update on Facebook Earnings Announcement Play

On May 11, 2016, I told you about two trades I was making in my personal account. You can see the entire blog which explains my thinking on our blog page. Here they are:

Today, I bought these calendar spreads on FB when the stock was trading . . .

How to Trade Out of an Earnings-Related Options Play

July 7th, 2016

A little over a week ago, I told you about trades I was making in advance of Nike’s earnings announcement. Lots of things didn’t quite work out the way I had expected they would, but I still managed to make over 50% for the week on my trades. There were some good learning experiences concerning how to trade out of calendar spreads once the announcement has been made. You need to tread water until the short options you sold expire and you can close out the spreads, and that can present some challenges.

Today I would like to share those learning experiences with you in case you make similar trades prior to a company’s earnings announcement.

Happy trading.

Terry

How to Trade Out of an Earnings-Related Options Play

According to Openfolio, a site where about 70,000 users share information on their investments, three out of four investors lost money in June, with an average return of -0.10%. This compares to the results of the Terry’s Tips’ Auto-Traded portfolios where 7 of 8 portfolios gained, and the average gain was 15.1%. Our only losing portfolio was a special bet that the short-term price of oil would fall. It didn’t, and we lost a little, but that was nothing compared to 4 of the portfolios which gained over 20% for the month.

One of our portfolios . . .

100% Gain in One Week Possible With Nike Options Trade?

June 27th, 2016

The Brexit vote on Friday crushed markets throughout the world, but it was a great day for Terry’s Tips subscribers who follow the eight actual portfolios we carry out for them to follow if they wish. Our composite gain for the day was greater than 10%, and that was on a day when the Dow fell over 600 points and the market as a whole (SPY) dropped even more.

One of the portfolios we carry out is designed to protect against a market crash or correction. We call it the Better Bear. It gained 34% Friday when the markets tumbled. Friday, like many days, was one when many of us are happy that we trade options rather than simply buy or sell shares of stock.

Today, I would like to share two trades I will be placing on Monday or Tuesday. I think that there is an excellent chance that these trades could double my money in a single week.

Happy trading.

Terry

100% Gain in One Week Possible With Nike Options Trade?

Nike (NKE) has fallen on hard times of late, falling from $68 in early December to $52.59 at the close on Friday. Earnings will be announced after the close on Tuesday, the 28th. Whisper numbers are about 10% higher than public estimates, and options are priced for a higher price after the announcement.

I am an options trader and rarely ever buy stock. I really don’t know if Nike will go up or down after the announcement, but there are some interesting features of the option prices that have caused me to take an interest in the company this week. As I often repeat in this newsletter, implied volatility (IV) of the option prices is the major reason that option prices are “high” or “low” compared to other option prices.

Most of the time, our basic strategy involves buying calendar spreads at a variety of strike prices. A calendar spread (also called a time spread) consists of coincidentally buying and selling either put or call options at the same strike price. The option you buy always has a longer time life than the option you sell. Our gains come from the higher decay rate of the short-term options that we have sold compared to the lower decay rate of the longer-term options that we have bought.

Most of the time, when we . . .

Half-Price Offer Expires at Midnight Today

June 15th, 2016

Our 15th birthday celebration ends at midnight tonight, and the half-price offer will disappear as well. If you have ever considered learning all about the wonderful world of options, this is the best opportunity you will ever see, at least from us. The time it act is now. Don’t let it slip away from you.

Half-Price Offer Expires at Midnight Today

As our 15th birthday present to you, we are offering the lowest subscription price than we have ever offered – our full package, including all the free reports, my White Paper, which explains my favorite option strategies in detail, and shows you exactly how to carry them out on your own, a 14-day options tutorial program which will give you a solid background on option trading, and two months of our weekly newsletter full of tradable option ideas. All this for a one-time fee of $39.95, less than half the cost of the White Paper alone ($79.95).

For this lowest-price-ever $39.95 offer, click here, enter Special Code . . .

Lowest Subscription Price Ever Still Available

June 9th, 2016

This month marks the 15th year in business for Terry’s Tips. We are celebrating this event by offering you our lowest subscription price ever. If you ever wanted to learn all about the wonderful world of options and my favorite options strategy, now is the time to act.

Lowest Subscription Price Ever

As our birthday present to you, we are offering the lowest subscription price than we have ever offered – our full package, including all the free reports, my White Paper, which explains my favorite option strategies in detail, and shows you exactly how to carry them out on your own, a 14-day options tutorial program which will give you a solid background on option trading, and two months of our weekly newsletter full of tradable option ideas. All this for a one-time fee of . . .

Lowest Subscription Price Ever

June 7th, 2016

This month marks the 15th year in business for Terry’s Tips. We are celebrating this event by offering you our lowest subscription price ever. Read on.

Today I would also like to share with you a small bet I made today on Nike. It should make 60% in 8 months even if the stock does not go up a penny. It can actually fall a little and you would still make 60%. But the big news today is our 15th birthday celebration offer.

Lowest Subscription Price Ever

As our birthday present to you, we are offering the lowest subscription price than we have ever offered – our full package, including all the free reports, my White Paper, which explains my favorite option strategies in detail, and shows you exactly how to carry them out on your own, a 14-day options tutorial program which will give you a solid background on option trading, and two months of our weekly newsletter full of tradable option ideas. All this for a one-time fee of $39.95, less than half the cost of the White Paper alone ($79.95).

For this lowest-price-ever $39.95 offer, click . . .

List of Options Which Trade After Hours (Until 4:15)

May 31st, 2016

Some time ago, I noticed that the value of some of our portfolios was changing after the market for the underlying stock had closed. Clearly, the value of the options was changing after the 4:00 EST close of trading. I did a Google search to find a list of options that traded after hours, and came up pretty empty. But now I have found the list, and will share it with you just in case you want to play for an extra 15 minutes after the close of trading each day.

Terry

List of Options Which Trade After Hours (Until 4:15)

Since option values are derived from the price of the underlying stock or ETP (Exchange Traded Product), once the underlying stops trading, there should be no reason for options to continue trading. However, more and more underlyings are now being traded in after-hours, and for a very few, the options continue trading as well, at least until 4:15 EST.

Options for the following symbols trade an extra 15 minutes after the close of trading – DBA, DBB, DBC, DBO, DIA, EFA, EEM, GAZ, IWM, IWN, IWO, IWV, JJC, KBE, KRE, MDY, MLPN, MOO, NDX, OEF, OIL, QQQ, SLX, SPY, SVXY, UNG, UUP, UVXY, VIIX, VIXY, VXX, VXZ, XHB, XLB, XLE, XLF, XLI, XLK, XLP, XLU, XLV, XLY, XME, XRT.

Most of these symbols are (often erroneously) called ETFs . . .

Making 36%

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

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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.

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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