Terry's Tips Stock Options Trading Blog
March 19th, 2012
Option prices for the market in general (SPY) are lower than they have been for five years. Maybe it is time to change from a strategy of selling short-term options (the strategy carried out at Terry’s Tips) to one of buying those options and hoping the market is more volatile than those low option prices would expect.
We will discuss that possibility today.
How to Contend With Historically Low Option Prices
Before discussing the situation of low option prices for most equities, I should comment on the continuing high option prices . . .
Tags: AAPL, at-the-money, ETF, implied volatility, IV, Portfolio, Profit, profits, Risk, SPY, Straddle, Straddles, Strangle, Strangles, Terry's Tips, thinkorswim, VIX, Volatility, Weekly Options, William Tell
Posted in AAPL, SPY, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options |
March 18th, 2012
The March options expiration cycle ended without much fanfare, but not after reaping a respectable 2% gain. All of the major indices saw gains exceed 2% with the small-call Russell 2000 being the exception. The market has now pushed higher nine out of the last ten weeks. The Nasdaq and S&P 500 have led the way all year and are now higher on the year 17.3% and 11.7%, respectively. Both have also pushed above key levels. The Nasdaq sits above 3000 and the S&P is now above pre financial crisis levels trading over 1400.
There is no doubt that this rally has . . .
Tags: AAPL, Bearish Options Strategies, Bullish Options strategies, VIX, Volatility
Posted in Andy's Market Report, SPY |
March 12th, 2012
Three weeks ago, we set up a special portfolio with a goal to make 100% on AAPL options in 4 weeks. We closed out the positions last Friday, a week early. We failed to reach our goal. The portfolio started out with a value of $4488 and after 3 weeks, it was worth $7172.
The gain for the 3 weeks was 60% (after commissions). Even though we failed in our initial goal, most of us were happy with making 60% in less than a month on our money.
For two years, Terry’s Tips has carried out at least one portfolio (and sometimes two) which use AAPL as the underlying, and we have noticed . . .
Tags: AAPL, Bearish Options Strategies, Bullish Options strategies, Calendar Spreads, Calls, Credit Spreads, diagonal spreads, Monthly Options, Portfolio, Profit, profits, shoot strategy, Terry's Tips, thinkorswim, Weekly vs. Monthly Options, William Tell
Posted in 10K Strategies, AAPL, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options |
March 11th, 2012
The bulls were once again successful in pushing the market higher this past week. It marked the ninth advance in ten weeks. The S&P 500 is already 9.0% higher year-to-date and the Nasdaq 100 is up a staggering 14.7%. The bulls have been in control since December 19th, in what has been one of the most persistent rallies in market history.
This past week did have some significance for the bears. Trading on Tuesday was relatively dramatic in that the S&P 500 fell 1.5% to suffer its worst one-day drop in almost three months. The action came on the heels of weak action abroad, where . . .
Tags: Bounce, GDP, Nasdaq 100, Overbought, Oversold, Pull Back, Resistance Levels, VIX
Posted in Andy's Market Report, SPY |
March 5th, 2012
Greetings!
A little over two weeks ago, we set out with a goal to make 100% on our AAPL options in 4 weeks. We started with calendar spreads at several different strike prices, one below the stock price and most of them at higher strikes.
We thought we could double our money in 4 weeks if the stock would hold steady or move moderately higher. As you may know, it overachieved this goal and rose over $20 in each of the first two weeks.
Today we will discuss the adjustments we had to make to keep up with the skyrocketing stock.
By the way, in spite of the stock moving much higher than we would have liked, we have gained . . .
Tags: AAPL, Auto-Trade, Bullish Options strategies, Calendar Spreads, Calls, diagonal spreads, Portfolio, Profit, profits, Puts, shoot strategy, Stocks vs. Stock Options, Terry's Tips, thinkorswim, William Tell
Posted in 10K Strategies, AAPL, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options |
February 25th, 2012
Last week I offered a video which showed the actual positions of an AAPL options portfolio designed to gain as much as 100% over the next 4 weeks. While it probably won’t be quite that good, we might come close.
The first week was encouraging. We had been hoping that AAPL would stay flat or move slightly higher. It had a great week, moving up by $20.29, or about 4%.
Our little portfolio gained . . .
Tags: AAPL, Bullish Options strategies, Credit Spreads, Terry's Tips, Weekly Options, Weekly vs. Monthly Options, William Tell
Posted in AAPL, Stock Option Trading Idea Of The Week, Stock Options Strategies, STUDD Strategy: Short Term Under-Intrinsic Double Diagonal, Terry's Tips Portfolios, Weekly Options |
February 21st, 2012
I like Apple. I think the stock will at least hold steady, or might go up over the next month. If it does, I expect to double my money with an options strategy I have just set up. Today I would like to share that strategy with you in a short video. Check it out here – http://youtu.be/6J9KPuimyXk
I hope you will enjoy it.
Interesting AAPL Stock Options Strategy
In spite of the big run-up in the price of AAPL since it announced blow-out earnings that exceeded all expectations, I think the stock has more room to go up. It is still . . .
Tags: AAPL, Bullish Options strategies, Calls, Credit Spreads, Portfolio, Profit, Stocks vs. Stock Options, Terry's Tips, thinkorswim, Weekly Options, William Tell
Posted in AAPL, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options |
February 13th, 2012
Greetings!
Last week I shared the actual positions we held in what we call our Shoot Strategy portfolio (which uses AAPL as the underlying). Last week was a great one for AAPL. The stock rose 7.3%. Our portfolio gained 22.1% after commissions, or more than 3 times the amount the stock went up.
One of the potential problems of the options portfolio is that the stock goes up too fast. When that appears to be happening, as it did in Apple last week, adjustments need to be made. We will talk a little about those adjustments this week.
Terry
Making Adjustments to the Shoot Strategy
First, let’s repeat the table of the actual positions . . .
Tags: AAPL, Bullish Options strategies, Credit Spreads, Monthly Options, Portfolio, Profit, profits, shoot strategy, Terry's Tips, thinkorswim, William Tell
Posted in 10K Strategies, AAPL, Monthly Options, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options |
February 6th, 2012
Two weeks ago, Apple announced blow-out earnings that pleased just about everyone who follows the stock. Since that time, AAPL has soared by 9.2%. Owners of the stock are celebrating.
Meanwhile, the actual options portfolio we carry out at Terry’s Tips increased in value by 42.5% over this same time period. Options outperformed the stock by more than 4 times.
Today I will share with you the actual option positions we hold in this portfolio, and show the potential gains (or losses) that lie ahead. This is an important report that I hope you will read carefully
Why Owning Options Beats Owning Stock
In April, 2010, we set up a $5000 portfolio to demonstrate that a well-designed options portfolio could substantially outperform the outright purchase of stock. We selected AAPL as the underlying, a company we thought had a good future.
We never imagined that future would be quite as spectacular as it has been so far. The stock has skyrocketed by 72% since then. Meanwhile, our options portfolio has gone up by 263%. Our subscribers who mirrored our portfolio from the very beginning have gained over 3.5 times as much as they would have if they had merely purchased shares of AAPL.
We withdrew $3000 of the original $5000 so new subscribers could mirror the portfolio with a smaller investment. The original investment, now $2000, as grown to its present value of $12,141 in 21 months. Not bad by any standards, if we do say so ourselves.
How did we do it? Quite simply, we bought call options with a few months of remaining life and sold call options with only one month of remaining life against these positions. The shorter-term calls we sold to someone else decay at a faster rate than the longer-term calls that we own. This gives us a major advantage over anyone who has just gone out and bought shares of stock.
In options terminology, we created a portfolio that maximized net delta (the equivalent number of shares of stock we own) as long as there was positive theta (which means that the portfolio would make a small gain every day that the stock remained absolutely flat).
Here are the actual . . .
Tags: AAPL, Bullish Options strategies, Credit Spreads, diagonal spreads, LEAPS, Monthly Options, Portfolio, Profit, shoot strategy, Stocks vs. Stock Options, Terry's Tips, thinkorswim, Weekly Options, William Tell
Posted in 10K Strategies, AAPL, Monthly Options, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options |
January 31st, 2012
January’s rally was admirable. Its perseverance frustrated bears. The infrequent single day declines maxed out at -0.6%.
And the last nine days of the month were more than mind-numbing for most traders as the market traded in a very tight range.
There’s no doubt the bears are ready. Almost every technical and sentiment measure I follow has pushed into a . . .
Tags: Bearish Options Strategies, Bullish Options strategies, Credit Spreads, ETF, SPY
Posted in Andy's Market Report, Stock Option Trading Idea Of The Week |
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