Terry's Tips Stock Options Trading Blog
July 21st, 2014
Last week I told you about a bullish short-term bet we made on SVXY because the stock had dropped over $3 in the previous week (and historically, 4 out of 5 times when that happened earlier this year, the stock rose at least $3 in the subsequent week). We placed an order to sell half the calls if they had doubled in price, and that occurred on Tuesday. On Thursday, volatility soared due to the plane being shot down over Ukraine and Israel invading Gaza. It looked like we would just break even on the trade since we had recovered the initial investment, but then, on Friday, the stock rallied $6 and we were able to sell the remaining half for enough to give us a 32% gain on the trade. Not as much as we had originally hoped, but a gain of any sort is always welcome.
Terry
Finding Lessons in a Trade
The big lesson from our experience last week, one that we have had many times, is that there is . . .
Posted in Stock Option Trading Idea Of The Week, Stock Options Strategies, SVXY, Terry's Tips Portfolios, Weekly Options |
July 14th, 2014
Just before the close on Friday, we made a strongly bullish trade on our favorite underlying stock in a portfolio at Terry’s Tips. In my personal account, I bought weekly calls on this same underlying. As I write this in the pre-market on Monday, it looks like that bet could triple in value this week.
I would like to share with you the thinking behind these trades so next time this opportunity comes up (and it surely will in the near future), you might decide to take advantage of it yourself.
Terry
A Possible Great Option Trading Idea: As we have discussed recently, option prices are . . .
Tags: Auto-Trade, Bullish Options strategies, Calls, implied volatility, Market Crash Protection, Portfolio, Profit, profits, Puts, Risk, Straddles, Strangles, SVXY, Terry's Tips, thinkorswim, VIX, Volatility, Weekly Options
Posted in SPY, Stock Option Trading Idea Of The Week, Stock Options Strategies, SVXY, Terry's Tips Portfolios, VXX, Weekly Options |
July 7th, 2014
Last week I reviewed the performance of the Terry’s Tips options portfolio for the first half of the year. I should have waited a week because this week was a great one – our composite average gained another 6%, making the year-to-date record 22%, or about 3 times as great as the market (SPY) gain of about 7%.
Last week I also discussed a GOOG vertical put credit spread which is designed to gain 100% in the year if GOOG finished up 2014 at any price higher than where it started, something that it has done in 9 of its . . .
Tags: Auto-Trade, Bullish Options strategies, Calls, Credit Spreads, GMCR, Monthly Options, profits, Puts, Risk, Stocks vs. Stock Options, Terry's Tips, thinkorswim, VIX
Posted in Monthly Options, SPY, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options |
June 30th, 2014
We have just finished the first half of 2014. It has been a good year for the market. It’s up about 6.7%. Everyone should be fairly happy. The composite portfolios conducted at Terry’s Tips have gained 16% over these months, almost 2 ½ times as much as the market rose. Our subscribers are even happier than most investors.
Our results would have been even better except for our one big losing portfolio which has lost nearly 80% because we tried something which was exactly the opposite to the basic strategy used in all the other portfolios (we essentially bought options rather than selling short-term options as our basic strategy does). In one month, we bought a 5-week straddle on Oracle because in was so cheap, and the stock did not fluctuate more than a dollar for the entire period. We lost about 80% of our investment. If we had bought a calendar spread instead (like we usually do), it would have been a big winner.
Today I would like to discuss the six-month results of a special strategy that we set up in January which was designed to make 100% in one year with very little (actually none) trades after the first ones were placed.
Terry
Six-Month Review of Our Options Strategies:
We have a portfolio we call Better Odds Than Vegas. In January, we picked . . .
Tags: Bullish Options strategies, Calendar Spreads, Credit Spreads, ETF, Monthly Options, Portfolio, Profit, profits, Risk, Stocks vs. Stock Options, Straddles, Terry's Tips, thinkorswim
Posted in Monthly Options, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios |
June 23rd, 2014
Last week I recommended buying a calendar spread on SVXY to take advantage of the extremely high option prices for the weekly options (at-the-money option prices had more than doubled over the past two weeks). The stock managed to skyrocket over 7% for the week and caused the calendar spread to incur a loss. When you sell a calendar spread, you want the stock to be trading very close to the strike price when the short options expire. When the underlying stock makes a big move in either direction, you generally lose money on these spreads, just as we did last week.
Ironically, this spread . . .
Tags: Auto-Trade, Bullish Options strategies, Calendar Spreads, diagonal spreads, Monthly Options, Portfolio, Profit, profits, Puts, Risk, Terry's Tips, thinkorswim, VIX, Volatility, Weekly Options
Posted in 10K Strategies, Monthly Options, SPY, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options |
June 16th, 2014
The recent developments in Iraq have nudged options volatility higher, but for one underlying, SVXY, it has apparently pushed IV through the roof. This development has brought about some potentially profitable option spread possibilities.
Terry
An Interesting Trade to Make on Monday
In case you don’t know what . . .
Tags: Auto-Trade, Calendar Spreads, Calls, Credit Spreads, diagonal spreads, ETF, ETN, implied volatility, intrinsic value, Monthly Options, Portfolio, Profit, profits, Risk, Straddles, Terry's Tips, thinkorswim, VIX, Volatility, VXX, Weekly Options
Posted in Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, VXX, Weekly Options |
June 9th, 2014
This week is a further discussion of my favorite ETP (Exchange Traded Product), SVXY. We have already discussed this unusual equity. Because of contango, it is destined to move higher every week that there is not a market crash or correction. It has doubled in value in each of the last two years. If you have an idea of which way an underlying is headed, there are extremely attractive option strategies that you might use. I will talk about one such strategy this week.
Terry
Check Out the Volatility in SVXY
Every week for the past four weeks in my personal . . .
Tags: Auto-Trade, Bullish Options strategies, Calendar Spreads, Calls, ETN, implied volatility, intrinsic value, Monthly Options, Portfolio, Profit, profits, Puts, Risk, Straddles, Terry's Tips, thinkorswim, VIX, Volatility, Weekly Options
Posted in Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options |
May 19th, 2014
This week I would like to introduce you to a thing called contango. This is relevant today because contango just got higher than I have seen it in many years – over 10% while most of the time, it hangs out in the 3% – 4% range. This measure becomes important when you are trading in my favorite ETP (Exchange Traded Product), SVXY. If your eyes haven’t glazed over yet, read on.
Terry
Contango, Backwardation, and SVXY
There seems to be a widespread need . . .
Tags: Bullish Options strategies, Calendar Spreads, Calls, Credit Spreads, implied volatility, Monthly Options, Portfolio, Profit, profits, Terry's Tips, thinkorswim, VIX, Volatility, VXX
Posted in Monthly Options, SPY, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, VXX |
May 12th, 2014
Most of the time we talk about how wonderful it is to be trading options. In the interests of fair play, today I will point out the downsides of options as an investment alternative.
Terry
A Look at the Downsides of Option Investing
1. Taxes. Except in very rare circumstances, all gains are taxed as short-term capital gains. This is essentially the same as ordinary income. The rates are as high as your individual personal income tax rates. Because of
Tags: Auto-Trade, Calendar Spreads, Calls, implied volatility, intrinsic value, Monthly Options, Portfolio, Profit, profits, Puts, Risk, Stocks vs. Stock Options, Terry's Tips, thinkorswim, VIX, Weekly Options
Posted in Monthly Options, SPY, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options |
April 28th, 2014
Today I would like to talk a little about an important measure in the options world – volatility, and how it affects how much you pay for an option (either put or call).
Terry
Volatility’s Impact on Option Prices
Volatility is the sole variable that can only be measured after the option prices are known. All the other variables have precise mathematical measurements, but volatility has an essentially emotional component that defies easy understanding. If option trading were a poker game, volatility would be . . .
Tags: AAPL, at-the-money, Calls, DIA, implied volatility, intrinsic value, IWM, Portfolio, Profit, QQQ, Risk, Terry's Tips, thinkorswim, Volatility, VXX
Posted in SPY, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios |
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