Entries by majcash

Rolling Options Positions

Options Education: Rolling The market has traded in an extremely tight range for the past three months, so many long call and put positions will be sitting at a loss at October Expiration. Stocks are just not moving, which is killer for owners of options. (This lack of market movement is why I have limited […]

Bull Call Spread

A bull call spread is used when a rise in the price of the underlying asset is expected. The strategy involves purchasing a call at a specific strike price while simultaneously selling a call at a higher strike price. The maximum profit on the strategy is the difference between the strike price of the long […]

Selling Puts

Put-Write or Selling Naked Puts A Put-Write strategy, also called “naked puts”, is used when a rise in the price of the underlying asset is expected, or a significant decline is not expected. This strategy is often used by traders who are willing to enter a long stock position in a stock at a lower […]

Covered Calls and Buy-Writes

Covered Calls/Buy-Write A Covered Call, also known as a Buy-Write, is a strategy in which the trader holds a long position in a stock and writes (sells) a call option on the same stock in an attempt to generate income. For example, let’s say you own 100 shares of fictional stock XYZ, which is currently […]

LinkedIn Takeover

Additional Trade Idea: LinkedIn (LNKD) On June 10th LinkedIn (LNKD) agreed to be acquired by Microsoft (MSFT) for 196 per share. Last week this news hit the market of salesforce.com‘s (CRM) interest in buying LNKD: In one of the biggest deals this year, in mid-June Microsoft (MSFT) agreed to acquire LinkedIn (LNKD) for $196 per […]

Ariad Pharmaceuticals $ARIA

Additional Trade Idea: Ariad Pharmaceuticals (ARIA) On Friday with the stock trading at 8.00, a trader bought over 12,000 Ariad Pharmaceuticals (ARIA) July 10 Calls for $0.20. This was an interesting trade, though because the calls were so cheap, it felt like a cheap shot to me, and I made a note of the bullish […]

Unusual Options Trading – Holly Frontier (HFC)

Trade Idea: Holly Frontier (HFC) I’m often asked how I choose my trades. Today, I’d like to walk you through my logic on NOT recommending a trade in Holly Frontier (HFC) Two weeks ago, Holly Frontier (HFC) sold off following earnings from 34.50 to 31, and continued to drift lower in the days that followed. […]

Monsanto Insider Trading

I have said many times that Calls/Puts are a tool that traders use to gain market leverage when they have insider information. Yesterday was one of the most blatant examples of this I have ever seen. (Be prepared to be shocked at how “unfair” this is) Over the course of the day yesterday, in trades […]