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Posts Tagged ‘Credit Spreads’

Coherent Inc. (COHR) Jumps After Earnings Beat, Is There More Upside Ahead?

Tuesday, November 14th, 2017

This week we are featuring another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our portfolios to identify stocks with momentum and place spreads that profit if the momentum continues, at least a little.

I would also like to include a table which reviews how the previous 12 Trading Idea of the Week selections have worked out in the real world.  We have had an exceptionally good record.

Terry

Coherent Inc. (COHR) Jumps After Earnings Beat, Is There More Upside Ahead?

Before we discuss this week’s trading idea, I would like to review the past 12 ideas we have published here.  Each of these ideas was first distributed to Terry’s Tips’ paid subscribers in our weekly Saturday Report, and then on Monday or Tuesday, to the free newsletter subscribers such as you.  Here are the results:

Trading Idea of the week Summary Chart November 2017

Trading Idea of the week Summary Chart November 2017

The expiration prices for the 3 spreads which expire next Friday are today’s prices.  All of them are safely above the max gain price for the spread.

The only losing trade would have been the BABA one which was a minor loss.  The stock closed at $.85 below the max gain price and we had collected $.75 from the spread.  Presumably, rather than accept this small loss, we would have rolled over the vertical credit spread to a future date.  If we had, it would now look pretty good because BABA closed yesterday at $186.41, well above the max gain 177 strike.

The average gain for the 12 spreads (including the loss) was 39%.  If you had risked the same amount on 12 trades that averaged a 39% gain, you would have picked up 468% on your original investment.  While these results are a extremely encouraging, we must recognize that the past few months have been ones of generally higher stock prices across the board.  Future results might not be this great.

Now, back to our Trading Idea of the Week:

Several analysts have expressed their bullish outlook towards Coherent Inc. following their recent earnings report.  Here are two of them – Coherent price target raised to $330 from $270 at Needham and Coherent Inc. can’t be more hot.  Just reaches record high.

From a technical perspective, COHR had been consolidating mostly sideways for nearly six months ahead of last week’s earnings report.  The earnings beat triggered a gap higher for a range break and the stock held gains to close the week out at record highs.  The range break suggests the broader bullish trend has resumed.

COHR Chart November 2017

COHR Chart November 2017

*source Tradingview.com

If you agree there’s further upside ahead for Coherent Inc., consider this trade which is a bet that the stock will continue to advance at least a little over the next five weeks.

Buy To Open COHR 15Dec17 305 Puts (COHR171215P305)
Sell To Open COHR 15Dec17 310 Puts (COHR171215P310) for a credit of $2.53 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when COHR was trading near $309.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

If you use our favorite broker for this trade, tastyworks, your commission on this trade will only be $1 per opening contract ($2 per spread) (and there is no commission on closing trades, only the $.10 clearing fee).  Each contract would then yield $251 and your broker would charge a $500 maintenance fee, making your investment $249 ($500 – $251).  If COHR closes at any price above $310 on December 15, 2017, both options would expire worthless, and your return on the spread would be 101% (1150% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

Black Friday Special Offer Lowest Price Ever

Wednesday, November 8th, 2017

Learn the Exact Details of the Options Strategies That Have Resulted in Average Gains of 120% so far in 2017…

…at a Near-Give-Away Price Never Offered Before

Terry’s Tips is an options newsletter that has been around for 16 years.  Over that time period, we have developed and refined several options strategies that are enjoying unprecedented success.

We carry out 10 separate options portfolios for our subscribers to follow on their own with our favorite brokerage tastyworks or by having the trades executed automatically through thinkorswim’s Auto-Trade program.

Each portfolio is carried out in a separate account available for everyone to see (we don’t just publicize the most successful ones).  Each portfolio employs a specific pre-defined strategy using one or more underlying stocks or ETPs (Exchange Traded Products).   Unlike other options newsletters, we include the actual commissions in all our results.

The composite average gain for 2017 for our 10 portfolios through the first week of November was 120%.  Subscribers who mirrored all 10 of our portfolios would have invested $48,600 in January.  Those portfolios were worth $107,103 last week.  But of course, you can mirror just the portfolios that you like or choose.

We have made these gains with various strategies including Credit Spreads and Selling Naked Puts.  But for the last 16 years our flagship strategy is what we call the 10K Strategy.  It involves selling short-term options on individual stocks and using longer-term (or LEAPS) as collateral.  It is sort of like writing calls, except that you don’t have to put up all that cash to buy 100 or 1000 shares of the stock.  The 10K Strategy is sort of like writing calls on steroids.  It is an amazingly simple strategy that really works with the one proviso, that you select a stock that stays flat or moves higher over time.

How else in today’s investment world of near-zero dividend yields can you expect to make these kinds of returns?  Find out exactly how to do it by buying yourself a Black Friday gift for yourself and your family.  They will love you for it.

Lowest Subscription Price Ever:  As a Black Friday special, we are offering the lowest subscription price that we have ever offered – our full package, including:

    • Over 10 case study reports
    • my 60+ page White Paper – which explains my favorite option strategies in detail and shows you exactly how to carry them out on your own
    • a 14-day options tutorial program which will give you a solid background on options trading
    • and two months of our weekly newsletter full of tradable option ideas.

Here is a sampling of the additional free reports you will get with a subscription to Terry’s Tips:

How We Made 100% on Apple

VXX – The Holy Grail for the 10K Strategy

Using the Vertical Credit Put Spread

Eight Consecutive Earnings Play Wins and What We Learned

An Options Strategy That Could Realistically Make 40% a Month

Two 2015 Case Studies of Option Portfolios – COST and SBUX

It is hard to place a value on these special reports – if they helped you improve your investment results for the rest of your life, how much might they be worth to you?  Not exactly priceless, but maybe getting close to it.

For this lowest-price-ever $37.95 offer, click here, enter Special Code BF117 (or BF117P for Premium Service – $77.95).

If you are ready to commit for a longer time period, you can save even more with our half-price offer on our Premium service for an entire year.  This special offer includes everything in our basic service, and in addition, real-time trade alerts and full access to all 9 of our current actual portfolios so that you can Auto-Trade or follow any or all of them.  We have several levels of our Premium service, but this is the maximum level since it includes full access to all nine portfolios.  A year’s subscription to this maximum level would cost $1080.  With this half-price offer, the cost for a full year would be only $540.  Use the Special Code MAX17P.

This is a time-limited offer.  You must order by Monday, November 27, 2017.  That’s when the half-price offer expires, and you will have to go back to the same old investment strategy that you have had limited success with for so long (if you are like most investors).

This is the perfect time to give you and your family the perfect Thanksgiving and Black Friday gift that is designed to deliver higher financial returns for the rest of your investing life. Just imagine sitting around at the family get together and explaining to your favorite know it all buy and hold uncle about Vertical Bull Put Spreads as his eyes glaze over.

I look forward to helping you get the next investment cycle (ride the holiday retail economy cash injection) started off right by sharing this valuable investment information with you at the lowest price ever. It may take you a little homework, but I am sure you will end up thinking it was well worth the investment.

Happy trading.

Terry

P.S.  If you would have any questions about this offer or Terry’s Tips, please call Seth Allen, our Senior Vice President at 800-803-4595.  Or make this investment in yourself at the lowest price ever offered in our 16 years of publication – only $37.95 for our entire package.  Get it here using Special Code BF117 (or BF117P for Premium Service – $79.95).   Do it today, before you forget and lose out.  This offer expires on Monday, November 27, 2016.

P.P.S. Use special code MAX17P to get the ultimate Premium Special for $540 (normally $1080)

Arista Networks (ANET) Hits Fresh All-Time Highs, What’s Next?

Monday, November 6th, 2017

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our portfolios to spot outperforming stocks and place spreads that profit if the momentum continues.  Actually, the stock can even decline a little for the maximum gain to be made.

The 10 portfolios carried out by Terry’s Tips for its paying subscribers had its best week ever last week, gaining an average of 9.1%.  The composite portfolio average for 2017 has soared to 120%.  Isn’t it time for you to see exactly how we are doing it?

Terry

Arista Networks (ANET) Hits Fresh All-Time Highs, What’s Next?

Several analysts are optimistic about Arista Network’s future following their earnings report last week, here are two of them – Arista Networks Keeps Enjoying Soaring Sales and Why Shares of Arista Networks Are Surging Today.

ANET fell under pressure last week ahead of its earnings report, falling just over 10% in a two-day correction.  The turn lower led to a break of the 20 period daily moving average as well as a rising trendline that had been in play for nearly three months.  However, the stock recovered after the earnings beat and closed the week out at a fresh all-time high.  Although the rising trendline is no longer in play as support, the break back above it as well as the moving average signals that buyers have regained control.

 

ANET Chart Novmeber 2017

ANET Chart Novmeber 2017

*source Tradingview.com

If you agree there’s further upside ahead for Arista Networks, consider this trade which is a bet that the stock will continue to advance, or at least not decline very much over the next six weeks.

Buy To Open ANET 15Dec17 195 Puts (ANET171215P195)
Sell To Open ANET 15Dec17 200 Puts (ANET171215P200)for a credit of $2.23 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when ANET was trading near $201.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

If you use our favorite broker for this trade, tastyworks, your commission on this trade will only be $1 per opening contract ($2 per spread) (and there is no commission on closing trades, only the $.10 clearing fee).  Each contract would then yield $221 and your broker would charge a $500 maintenance fee, making your investment $279 ($500 – $221).  If ANET closes at any price above $200 on December 15, 2017, both options would expire worthless, and your return on the spread would be 79% (741% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

BD Underlying Updates November 2, 2017

BD Underlying Updates November 2, 2017

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

Centene Corp (CNC) Poised To Break $100

Monday, October 30th, 2017

This week we are featuring another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our portfolios to identify stocks with upward momentum and place spreads that stand to profit if the momentum continues, at least a little.

Just an update – the composite average gain for our 10 Terry’s Tips actual options portfolios has now reached 102% for 2017 (after paying all commissions, of course), and we expect some fireworks this week in our two portfolios which trade FB and MA options as both companies announce earnings after the close on Wednesday.

Terry

Centene Corp (CNC) Poised To Break $100

Several analysts are confident Centene Corp stock will continue its bullish run and break above the psychological $100.00 handle.  Here are two of them – Oppenheimer Holdings, Inc. Reaffirms “Buy” Rating for Centene Corporation (CNC) and Centene Corporation’s (CNC) Buy Rating Reiterated at Cowen and Company.

From a technical perspective, a rising trendline is in play that dates back to a low posted in late 2016.  Buyer’s protected the trendline earlier this month on a momentum driven decline which reaffirms that it is widely watched and respected.

CNC Chart October 2017

CNC Chart October 2017

*source Tradingview.com

If you agree there’s further upside ahead for Centene Corporation, consider this trade which is a bet that the stock will continue to advance at least a little over the next seven weeks.

Buy To Open CNC 5Dec17 92.50 Puts (CNC171215P92500)
Sell To Open CNC 5Dec17 95.00 Puts (CNC171215P95000) for a credit of $1.18 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when CNC was trading near $94.50.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

If you use our favorite broker for this trade, tastyworks, your commission on this trade will only be $1 per opening contract ($2 per spread) (and there is no commission on closing trades, only the $.10 clearing fee).  Each contract would then yield $116 and your broker would charge a $250 maintenance fee, making your investment $134 ($250 – $116).  If CNC closes at any price above $95 on December 15, 2017, both options would expire worthless, and your return on the spread would be 87% (1264% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates October 26, 2017

IBD Underlying Updates October 26, 2017

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

Is SVB Financial Group (SIVB) Ready To Continue Higher After The Price Correction?

Monday, October 23rd, 2017

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our portfolios to identify outperforming stocks and place spreads that take advantage of the underlying trend and momentum.

I did want you to know that the 10 actual option portfolios carried out at Terry’s Tips  for paying subscribers reached an important milestone this week.  These portfolios use a variety of pre-determined options strategies and differing underlying stocks or ETPs.  If you had invested in all 10 portfolios in January 2017, you would have invested $48,600.  This week, the composite value of those portfolios reached $97,742, a gain of 101%.  For the first time, we are up 100% for the year.  A milestone to celebrate!  Isn’t it time that you learned how we did it so that you could enjoy these kinds of returns in your own investment account?

Terry

Is SVB Financial Group (SIVB) Ready To Continue Higher After The Price Correction?

SIVB recently broke higher from a correction that had taken place since March.  The stock price started trending higher in late September and made a series of technical breaks by regaining its 200-period daily moving average and breaking above a declining trend channel that had encompassed the roughly six-month correction.

SIVB corrected lower last week following the technical break but turned higher after retesting the broken trend channel, slightly ahead of the 200-period daily moving average.  The stock price ended the week near 189.50 after a gap higher inspired by the earnings report, taking out resistance at 186.09 which was a hurdle in May and August.  The trend channel which is found on a daily chart resembles a flag pattern and the recent upside break signals a bullish continuation.

SIVB Chart October 2017

SIVB Chart October 2017

*source Tradingview.com
If you agree there’s further upside ahead for SVB Financial Group, consider this trade which is a bet that the stock will continue to advance at least a little bit over the next four weeks.

Buy To Open SIVB 17Nov17 185 Puts (SIVB171117P185)
Sell To Open SIVB 17Nov17 190 Puts (SIVB171117P190) for a credit of $2.08 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when SIVB was trading near $189.50.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

If you use our favorite broker for this trade, tastyworks, your commission on this trade will only be $1 per opening contract ($2 per spread) (and there is no commission on closing trades, only the $.10 clearing fee).  Each contract would then yield $206 and your broker would charge a $500 maintenance fee, making your investment $294 ($500 – $206).  If SIVB closes at any price above $190 on November 17, 2017, both options would expire worthless, and your return on the spread would be 70% (1023% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates October 19, 2017

IBD Underlying Updates October 19, 2017

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

Consider Five Below Inc (FIVE) After The Bullish Technical Breakout

Monday, October 16th, 2017

This week we are featuring another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our portfolios to identify outperforming stocks and place spreads that take advantage of the momentum.

The composite average gain for the 10 portfolios carried out for Terry’s Tips  paying subscribers has now reached 95.2% for 2017.  Isn’t it time for you to come on board and learn exactly how our options strategies have been able to compile this kind of record so consistently this year?

Terry

Consider Five Below Inc (FIVE) After The Bullish Technical Breakout

Several analysts have been praising Five Below Inc’s business model and see further upside in the stock price.  Here are two of them – Five Below Might Offer 15% Upside Potential and Amazon Who? This Fast-Growing, Teen-Focused Retailer Breaks Out.

Recently, there has been a technical breakout in FIVE as it has scaled above the 2016 and 2017 highs which were in close proximity of each other around the $53 price point.  The stock has also climbed above a horizontal level at $54.77 which was major resistance in 2013, in doing so, the stock briefly traded at record levels.  There has been a retracement in the past week which could be offering an attractive entry point.

 

FIVE Chart October 2017

FIVE Chart October 2017

*source Tradingview.com

If you agree there’s further upside ahead for FIVE, consider this trade which is a bet that the stock will continue to advance, or at least not decline very much over the next four weeks.

Buy To Open FIVE 17Nov17 50 Puts (FIVE171117P50)
Sell To Open FIVE 17Nov17 55 Puts (FIVE171117P55) for a credit of $1.28 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when FIVE was trading near $55.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

If you use our favorite broker for this trade, tastyworks, your commission on this trade will only be $1 per opening contract ($2 per spread) (and there is no commission on closing trades, only the $.10 clearing fee).  Each contract would then yield $126 and your broker would charge a $500 maintenance fee, making your investment $374 ($500 – $126).  If FIVE closes at any price above $55 on November 17, 2017, both options would expire worthless, and your return on the spread would be 34% (384% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates October 12, 2017

IBD Underlying Updates October 12, 2017

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

Will the Nvidia (NVDA) Bull Run Continue?

Monday, October 9th, 2017

This week we are discussing another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our portfolios to identify stocks with upward momentum and place spreads which will profit if the upward momentum continues for about four weeks.  Actually, the stock can even fall a little for the maxium gain to be made on these spreads.

The actual portfolios carried out for Terry’s Tips’s paying subscribers had another banner week, gaining an average of 4.7% while the market (SPY) rose 1.2%.  Our 10 portfolios have now gained 86.7% so far in 2017.  Options clearly can deliver extraordinary gains if they are set up properly.

Terry

Will the Nvidia (NVDA) Bull Run Continue?

Nvidia stock has gained significantly over the last year and several analysts believe there is further upside.  Here are two of them – Buy Nvidia, market’s hottest stock, on its gaming, A.I. prowess: Citi and 14% Upside Seen For Nvidia Shares On PC Gaming, Bitcoin Mining Strength.

From a technical perspective, NVDA has been rallying in a rising trend channel since early July.  There was a correction that took place late last month, however, the 20-day moving average as well as the lower bound of the rising channel held the stock price higher and continues to offer downside support.

 

NVDA Chart October 2017

NVDA Chart October 2017

*source Tradingview.com

If you agree there’s further upside ahead for Nvidia, consider this trade which is a bet that the stock will continue to advance, or at least not decline very much over the next four weeks.

Buy To Open NVDA 3Nov17 177.50 Puts (NVDA171103P17750)
Sell To Open NVDA 3Nov17 180.00 Puts (NVDA171103P18000) for a credit of $1.10 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when NVDA was trading near $181.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

If you use our favorite broker for this trade, tastyworks, your commission on this trade will only be $1 per opening contract ($2 per spread) (and there is no commission on closing trades, only the $.10 clearing fee).  Each contract would then yield $108 and your broker would charge a $250 maintenance fee, making your investment $142 ($250 – $108).  If NVDA closes at any price above $180 on November 3, 2017, both options would expire worthless, and your return on the spread would be 76% (1110% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates October 5, 2017

IBD Underlying Updates October 5, 2017

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

Earnings Growth To Fuel Further Momentum For Red Hat (RHT)

Monday, October 2nd, 2017

This week we are featuring a recent addition to the Investor’s Business Daily (IBD) Top 50 List of companies.  We use this list in one of our portfolios to spot outperforming stocks and place spreads which will profit if the upward momentum continues.  Actually, the stock can even fall a little for the maximum gain to be realized on these spreads.

The 10 Terry’s Tips option portfolios enjoyed another stellar week last week, gaining an average of 1.2%, and making the ytd number a whopping 78% for all the portfolios combined.  This is over 7 times as great as the 2017 results for the market (SPY) which is up about 11%.

Terry

Earnings Growth To Fuel Further Momentum For Red Hat (RHT)

Red Hat reported above-consensus earnings in the past week and several analysts have refreshed their upside targets since.  Here are two of them – Red Hat PT raised to $128 at BMO Capital and Red Hat PT Raised to $117 at JPMorgan Following 2Q.

Red Hat’s earnings report triggered a push higher above a notable horizontal level at $108.04 that held the stock price lower on several attempts throughout the month prior to the report.  RHT also regained the 20-period daily moving average on the back of the same surge and hit fresh 52-week highs.  The horizontal level and the moving average fall in close proximity to each other, offering a strong confluence of downside support.

 

RHT Chart October 2017

RHT Chart October 2017

*source Tradingview.com

If you agree there’s further upside ahead for Red Hat, consider this trade which is a bet that the stock will continue to advance, or at least not decline very much over the next seven weeks.

Buy To Open RHT 17Nov17 105 Puts (RHT171117P105)
Sell To Open RHT 17Nov17 110 Puts (RHT171117P110) for a credit of $1.45 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when RHT was trading near $111.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

If you use our favorite broker for this trade, tastyworks, your commission on this trade will only be $1 per opening contract ($2 per spread) (and there is no commission on closing trades, only the $.10 clearing fee).  Each contract would then yield $143 and your broker would charge a $500 maintenance fee, making your investment $357 ($500 – $143).  If RHT closes at any price above $110 on November 17, 2017, both options would expire worthless, and your return on the spread would be 40% (325% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates September 28, 2017

IBD Underlying Updates September 28, 2017

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

Advanced Energy Industries (AEIS) Offers An Attractive Entry Point

Monday, September 25th, 2017

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our portfolios to find outperforming stocks and place spreads that profit if the upward momentum continues for about four more weeks.  Actually, the stock can even decline a little for the maximum gain to be realized on these spreads.

2017 has been a good year for the market.  The S&P 500 is up almost 11%.  The 10 options portfolios carried out by Terry’s Tips have gained a composite average of 75.6% so far this year (after paying all the commissions).  Our strategies have gained almost 7 times as much as the market has picked up.  Isn’t it about time that you learned more about the wonderful world of options?

Terry

Advanced Energy Industries (AEIS) Offers An Attractive Entry Point

Several analysts are expecting AEIS to continue higher.  Needham analyst Edward Monk recently reiterated a Buy rating and set a price target of $80.  Another analyst has made a strong fundamental case for further upside in the stock price in his article posted at Seeking Alpha, highlighting impressive growth, no long-term debt, and a strong balance sheet.

The technical outlook for AEIS suggests the stock is ready to resume higher.  The stock recently climbed back above a significant horizontal level at $72.88 which was major resistance in 2000 on a monthly chart.  A rising trendline that originates from a low posted in early July has held declines and a declining trendline that connects the top from July with a high posted in early September has been breached to the upside.  The same declining trendline held the correction last week and there was a great deal of momentum behind the recovery from it.

AEIS Chart September 2017

AEIS Chart September 2017

*source Tradingview.com

If you agree there’s further upside ahead for Advanced Energy, consider this trade which is a bet that the stock will continue to advance, or at least not decline very much over the next four weeks.

Buy To Open AEIS 20Oct17 70 Puts (AEIS171020P70)
Sell To Open AEIS 20Oct17 75 Puts (AEIS171020P75) for a credit of $1.25 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when AEIS was trading near $76.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

If you use our favorite broker for this trade, tastyworks, your commission on this trade will only be $1 per opening contract ($2 per spread) (and there is no commission on closing trades, only the $.10 clearing fee).  Each contract would then yield $123 and your broker would charge a $500 maintenance fee, making your investment $377 ($500 – $123).  If AEIS closes at any price above $75 on October 20, 2017, both options would expire worthless, and your return on the spread would be 32% (474% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates September 22, 2017

IBD Underlying Updates September 22, 2017

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

Will Alibaba (BABA) Continue The Upward Momentum?

Monday, September 18th, 2017

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our portfolios to identify stocks that have displayed strong upward momentum and place spreads that profit it the momentum continues for about six weeks.

Last week, the 10 Terry’s Tips portfolios enjoyed another banner week. While SPY rose 1.1%, all 10 portfolios gained an average of 6.9% and are now up 75% for the year to date.  Isn’t it time you took a look at how we are doing this?  You just might learn something new.

Terry

Will Alibaba (BABA) Continue The Upward Momentum?

Some well-known analysts are quite bullish Alibaba stock and outline why they expect further upside here – Why Druckenmiller Is Optimistic about Chinese Consumer Stocks and Why Goldman Sachs is Optimistic about Alibaba.

BABA has been trending higher since late 2015 with a boost in upside momentum since the start of the year.  The stock gapped higher following the last earnings report and recently broke to record highs without closing the gap.  The 20-day moving average has held the stock higher since the middle of August and offers strong downside support as it resides within proximity of last month’s close of 172.47

BABA Chart September 2017

BABA Chart September 2017

*source Tradingview.com

If you agree there’s further upside ahead for Alibaba, consider this trade which is a bet that the stock will continue to advance at least a little over the next six weeks.

Buy To Open BABA 27Oct17 175 Puts (BABA171027P175)
Sell To Open BABA 27Oct17 177.5 Puts (BABA171027P177.5) for a credit of $0.75 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when BABA was trading near $177.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

If you use our favorite broker for this trade, tastyworks, your commission on this trade will only be $1 per opening contract ($2 per spread) (and there is no commission on closing trades, only the $.10 clearing fee).  Each contract would then yield $73 and your broker would charge a $250 maintenance fee, making your investment $177 ($250 – $73).  If BABA closes at any price above $177.50 on October 27, 2017, both options would expire worthless, and your return on the spread would be 41% (357% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates September 15, 2017

IBD Underlying Updates September 15, 2017

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

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