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Option LEAPS

LEAPS have nothing to do with how high a basketball player can jump, or anything a frog does, or even those crazy years that come along every four years when February has 29 days.

Option LEAPS are simply options that have a long life span, usually a year or more.  There is no precise time period for when an option is called a LEAP, but the one-year lifespan is generally accepted to be about when it starts.

An option might start out being a LEAP, but over time as there are fewer months remaining until it expires, it is no longer called a LEAP.

LEAPS is an acronym for Long-term Equity AnticiPationS. Most LEAPS expire in January, but in the past few years, additional long-term months have been offered for many underlying stocks.

One of the most popular use of LEAPS is as the long side in a calendar spread.  A person buys a LEAP which goes down very slowly in value and simultaneously sells someone else a short-term option at the same strike price which goes down much faster in value.  For a free report on how calendar spreads work, go to How to Make 70% a Year With Calendar Spreads.

Terry's Tips Stock Options Trading Blog

March 21, 2017

What Can Be Learned From Successful Option Strategies

Today I would like to share some thoughts I sent out on Saturday to paying subscribers at Terry's Tips. These thoughts reflected on the recent successes of the nine actual options portfolios we carry out and comment on each week. By the way, all nine portfolios are profitable for 2017 and the composite average gain is currently 28.9% since the beginning of the year. Last week while the market (SPY) fell 0.3%, our portfolios gained an average of 3.2% for the week, demonstrating that we don’t have to rely on a rising market to enjoy portfolio gains.

Terry

What Can Be Learned From Successful Option Strategies

If we can identify the strategies that resulted in the extraordinary returns we have enjoyed in the first quarter, maybe we can use those strategies for other underlying stocks or ETPs and time periods.

First, we must admit that we had some good luck. Anyone who makes these kinds of returns must admit that some of it was based on pure luck. Anyone who follows the mutual fund industry knows this intimately. Every year, millions of . . .

March 15, 2017

Options Which Trade After Hours (Until 4:15)

First, I would like to report that the 9 actual option portfolios carried out at Terry's Tips have gained a composite 24.9% so far in 2017. It has been a good year so far for the market, but it (i.e., SPY) is up only 5.2%, so we have done 4+ times better. Maybe it would be a good time for you to take a peek at the exact positions and strategies we are using to ring up these kinds of gains.

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

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 . . .

March 13, 2017

How to Make 40% in 45 Days With a Bet on Ford

Last week I suggested a bearish spread on Tesla that would make 67% in 49 days. The stock has fallen about $7 since then, and the spread that I placed has already picked up 30% in a single week. I am tempted to close it out and take the profit, but I think I will wait it out and happily collect the entire 67% in six weeks.

Today I am reporting on a spread I placed on Ford (F) on Friday when the stock was trading at $12.54.

Terry

How to Make 40% in 45 Days With a Bet on Ford

Several articles have been published lately which are bullish on Ford, including Ford and Its 4.8% Dividend Yield, and Ford: Break-Out Ahead

On Friday, when F was trading at $12.54, I made a . . .

Making 36%

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

This book may not improve your golf game, but it might change your financial situation so that you will have more time for the greens and fairways (and sometimes the woods).

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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