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Stock Options Tutorials

An Options Tutorial Should be Free:  There are many websites promoting an Options Tutorial which costs big bucks.  You should be able to find a good Options Tutorial for free.  In fact, you have already landed on a FREE Options Tutorial site.  All you have to is read what we have for you.  It should be a good start.

Stock is to Checkers As Options are to Chess:  Investing in stock is a whole lot easier than investing in options.  Investing in stocks is simple.  Just pick a horse and place your bet.  It is a simple game like playing checkers.  Investing in options is a whole lot more complicated – it is more like playing chess.  Options investing can be a life-long learning experience.  

For those of us who love the extra challenge of option investing, it is worth every minute of time you spend.  The rewards of options investing can be far greater than the possible gains of buying or selling stock, but the risks are also greater.  Options are leveraged investments.  Leverage works both ways – it can provide extraordinary gains as well as extraordinary losses.

Obviously, learning all you can about options is essential before you ever invest with real money.  So, where do you start?

Getting Started with your Free Options Tutorial:  We believe that you best bet would be to read every topic listed at Stock Options 101, beginning at the top.  Once you have an understanding of the basic definitions and concepts, your next step might be to sign up for our free weekly newsletter.

In addition to a new options idea sent to you each week you will get a free options report that puts many of the basic options concepts to work in the real world.

Terry's Tips Stock Options Trading Blog

May 23, 2016

How To Protect Yourself Against a Market Crash With Options

Today’s idea is a little complicated, but it involves an important part of any prudent investment strategy. Market crashes do come along every once in a while, and we are eight years away from the last one in 2008. What will happen to your nest egg if it happens again this year?

Options can be a good form of market crash insurance, and it is possible to set up a strategy that might even make a small gain if the crash doesn’t come along. That possibility sets it apart from most forms of insurance which cost you out-of-pocket money if the calamity you insure against doesn’t occur.

Terry

How To Protect Yourself Against a Market Crash With Options

There are some strong indications that the old adage “Sell in May and Go Away” might be the appropriate move right now. Goldman Sachs has downgraded its outlook on equities to "neutral" over the next 12 months, saying there's no particular reason to own them. "Until we see sustained signals of growth recovery, we do not feel comfortable taking equity risk, particularly as valuations are near peak levels," the firm said in a research note.

For several months, Robert Shiller has been warning that the market is seriously overvalued by his unique method of measuring prices against long-term average p/e’s. George Soros is keeping the bears happy as well, doubling his wager against the S&P 500. The billionaire investor, who has been warning that the 2008 financial crisis could be repeated due to China's economic slowdown, bought 2.1M-share "put" options in SPY during Q1. The magnitude of his bet against SPY is phenomenal, essentially 200 million shares short. Of course, he almost always deals in stratospheric numbers, but the size of this bet indicates that he feels pretty strongly about this one. He didn’t become a billionaire by being on the wrong side of market bets.

So what can you do to protect yourself against a big tumble in the market? We are setting up a bearish . . .

May 17, 2016

How Option Prices are Determined

Today I would like to pass along some basic information about how stock options prices are determined. I have discussed this in the past, but we now have many new subscribers who may not have seen our earlier blogs. I apologize if this is old information for you.

Terry

How Option Prices are Determined

Of course, the market ultimately determines the price of any option as buyers bid and sellers ask at various prices. Usually, they meet somewhere in the middle and a price is determined. This buying and selling action is generally not based on some pie-in-the-sky notion of value, but is soundly grounded on some mathematical considerations.

There are 5 components that determine the value of an option:

1. The price of the underlying stock

May 11, 2016

An Options Play on Facebook Which Should Make 50% in 60 Days

Today I would like to suggest an options trade on Facebook (FB). It will involve waiting 6 weeks to close out. Many option players have short attention spans and don’t like to wait that long. On the other hand, I think this trade has a very high likelihood of making a profit of at least 50%, even if the stock fluctuates more than we might like. To my way of thinking, it should be worth the wait, especially since I think that there is a very small likelihood that this play would end up losing money.

Terry

An Options Play on Facebook Which Should Make 50% in 60 Days

Over the past month I have suggested legging into calendar spreads in advance of an earnings announcement for 7 different companies (FB, COST, TWX, TGT, SBUX, and JNJ, and ABBV). In every case, I was personally successful at creating a calendar spread at a credit and guaranteeing myself a profit no matter where the stock price ended up after the announcement. You should have been able to duplicate every one of these successes as well. I got a kick out of having 7 consecutive winning trades, some of which made me more than 100% on my amount at risk.

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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