helplessobserver

Tuesday's Options Recap

My option strangle model on EMC shows a 6% gain if the stock closes above 14 at the August expiration. If it dips the collected premiums give you the stock at a 4-6% discount from your buy price.

Why I Sell Put Options (Part I)

I personally like the strangle, buy the stock, sell a call on it and then sell a put, both near the money. If the stock gets called a 8-10% premium profits is gained. If the stock declines the premiums give a 6-8% discount from the buy. Below your break even price buy two out of the money puts to protect your capital. A strike on Iran will cause a 500 - 800 drop on the DJIA. I use an Excel spread sheet model to quickly compute profits, percentages and break even prices.

Reality Bites As Stocks Continue To Collapse

Seems like the hedge funds, the so called "smart money", are exiting the market at exactly the wrong time and calls in question their competence. Sure back in their ivy league MBA classes they mastered non-correlated markets. If oil is going up, buy oil/energy assets and short transportation assets. Any rube on the street can find that out from listening to Cramer, plus Cramer does not charge $400 per semester for his correlation tutorial.

GM on the Skids - Fast Money Recap (7/2/08)

The Fast Money Guys are pure and simple momentum players. Their recommendations are for investors who keep careful tabs on the market. Following them you can make huge gains, but must be able to take losses and shift to the new group, either long or shortl. Long term investors are advised to beware of the Fast Money Guys. Stocks like GE, Emerson Electric and Air Products and Chemicals are seldom on their radar screen.