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Terry's Tips Stock Options Trading Blog

Two Interesting Option Bets for 2014 – SPY and Google

December 23rd, 2013

Today I would like to tell you about two actual option trades that I made just this morning and my reasoning behind them. They are both long-term bets on what I expect the market to do in 2014. One of these bets might make an average of 85% every year if the market behaves like it has in the past.

By the way, last week when I salted this newsletter (and my blog) with the keywords “option trading” and “trading options” to see if Google Alerts picked it up, I was not surprised to see that I did not make the cut. Google seems to have switched what they think is important from keywords to social media traffic, and since Terry’s Tips does not have a Facebook or Twitter account, I am not considered worthy of inclusion in their searches. Oh well, at least I learned where I stand, right up there with the chopped liver.

I hope you will find these two trades I made interesting enough to consider doing on your own (only with money you can afford to lose) if you agree with my assumptions.

Two Interesting Option Bets for 2014 – SPY and Google

While most stocks go up some months and down others, when you check out how they perform for a whole year, most of the time they . . .

A “Conservative” Options Strategy for 2014

December 16th, 2013

Every day, I get a Google alert for the words “options trading” so that I can keep up with what others, particularly those with blogs, are saying about options trading. I always wondered why my blogs have never appeared on the list I get each day. Maybe it’s because I don’t use the exact words “option trading” like some of the blogs do.

Here is an example of how one company loaded up their first paragraph with these key words (I have changed a few words so Google doesn’t think I am just copying it) – “Some experts will try to explain the right way to trade options by a number of steps. For example, you may see ‘Trading Options in 6 Steps’ or ’12 Easy Steps for Trading Options.’ This overly simplistic approach can often send the novice option trading investor down the wrong path and not teach the investor a solid methodology for options trading. (my emphasis)” The key words “options trading” appeared 5 times in 3 sentences. Now that they are in my blog I will see if my blog gets picked up by Google.

Today I would like to share my thoughts on what 2014 might have in store for us, and offer an options strategy designed to capitalize on the year unfolding as I expect.

Terry

A Look at the Downsides of Option Investing

December 10th, 2013

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.

If the market knocks you down, try laughing instead of crying – some market definitions

December 3rd, 2013

This week is a good time to take a little break from the market (it’s the holiday season and volatility usually slows to a crawl and edges a little higher – it’s called the Santa Claus rally). It is a great time to own calendar spreads or my favorite ETNs (ZIV and XIV, two equities that have nearly doubled in each of the last two years).

Check out below how you can become a Terry’s Trades Insider, receive two month of free service plus several valuable reports, all for absolutely no cost while you enjoy all the benefits of a new account at thinkorswim by TD Ameritrade (including no commissions for two months of trading).

Terry

If the market knocks you down, try laughing instead of crying –

Some Market Definitions:

CEO –Chief Embezzlement Officer.

How to Make 60% to 100% in 2014 if a Single Analyst (Out of 13) is Right

November 25th, 2013

Today we are going to look at what the analysts are forecasting for 2014 and suggest some option strategies that will make 60% or more if any one of the analysts interviewed by the Wall Street Journal are correct. They don’t all have to be correct, just one of the 13 they talked to.

Please continue reading down so you can see how you can come on board as a Terry’s Tips subscriber for no cost at all while enjoying all the benefits that thinkorswim by TD Ameritrade offers to anyone who opens an account with them.

Terry

How to Make 60% to 100% in 2014 if a Single Analyst (Out of 13) is Right

Interesting SPY Straddle Purchase Strategy

November 18th, 2013

In case you are new to options or have been living under a rock for the past few months, you know that option prices are at historic lows. The average volatility of SPY options (VIX) has been just over 20 over the years. This means that option prices are expecting the stock (S&P 500) will fluctuate about 20% over the course of a year.

Right now, VIX is hanging out at less than 13. Option buyers are not expecting SPY to fluctuate very much with a reading this low. Since in reality, SPY jumps around quite a bit every time the word “tapering” appears in print, or the government appears to be unwilling to extend the debt limit, there is a big temptation to buy options rather than selling them.

Today I would like to share with you an idea we have developed at Terry’s Tips that has been quite successful in the short time that we have been watching it.

Terry

Interesting SPY Straddle Purchase Strategy:

For many years, Terry’s Tips has advocated . . .

Follow-Up on AAPL Earnings-Announcement Strategy

November 6th, 2013

Last week I told you about a spread I had placed on Apple (AAPL) just prior to their earnings announcement. I closed out that spread this week, and there was a learning experience that I would like to share with you.

Please continue reading down so you can see how you can come on board as a Terry’s Tips subscriber for no cost at all while enjoying all the benefits that thinkorswim incentive offers to anyone who opens an account with them.

An AAPL Earnings-Announcement Strategy

October 30th, 2013

Today I would like to share with you an options investment I made yesterday, just prior to the Apple (AAPL) earnings announcement. While it is too late to make this same investment yourself, you might consider it three months from now when announcement time comes around again, or with another company that you feel good about.

Please continue reading down so you can see how you can come on board as a Terry’s Tips subscriber for no cost at all while enjoying all the benefits that thinkorswim incentive offers to anyone who opens an account with them.

Update on Google Options Purchase

October 26th, 2013

Two weeks ago I told you about an options investment I made in Google. This investment was made just before Google was scheduled to announce their earnings for the latest quarter. For that reason, the October options had skyrocketed in value as they usually do just prior to an announcement, especially the options that will expire shortly after the announcement is made.

How to Own 100 Shares of Google for $16,000

October 7th, 2013

Way back when Google (GOOG) went public at $80 a share, I decided that I would like to own 100 shares and hang on to it for the long run. Obviously, that was a good idea as the stock is trading today at $870. My $8000 investment would now be worth $87,000 if I had been able to keep my original shares. Unfortunately, over the years, an options opportunity inevitably came along that looked more attractive to me than my 100 shares of GOOG, and I sold my shares to take advantage of the opportunity.

Many times my investment account had . . .

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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