Option trades, like any other market trade, involve a buyer and seller in order to complete the transaction. The buyer of a call option has the right to buy the underlying… Read More

There are two sides to every options trade since there is always a buyer and a seller in every market transaction. On options trades, the seller is said to be writing an option, and from the writer’s… Read More

While the S&P 500 and Dow have rallied to five-year highs, the technology sector has lagged, and is currently sitting about 4% below the fall peak. The PowerShares QQQ Trust (Nasdaq: QQQ), an exchange-traded fund (ETF) that tracks the Nasdaq 100, could provide… Read More

While the S&P 500 and Dow have rallied to five-year highs, the technology sector has lagged, and is currently sitting about 4% below the fall peak. The PowerShares QQQ Trust (Nasdaq: QQQ), an exchange-traded fund (ETF) that tracks the Nasdaq 100, could provide a diversified way for investors to profit while this out-of-favor sector plays catch up. One reason I like this fund is the exposure it offers to Apple (Nasdaq: AAPL), which accounts for a whopping 15% of the… Read More

While the S&P 500 and Dow have rallied to five-year highs, the technology sector has lagged, and is currently sitting about 4% below the fall peak. The PowerShares QQQ Trust (Nasdaq: QQQ), an exchange-traded fund (ETF) that tracks the Nasdaq 100, could provide a diversified way for investors to profit while this out-of-favor sector plays catch up. One reason I like this fund is the exposure it offers to Apple (Nasdaq: AAPL), which accounts for a whopping 15% of the index weight. AAPL is more than 35% off its September highs, but when the stock stabilizes and snaps back, QQQ will rise with it.  QQQ’s recent month-long range between $68 and $66 targets $71 on a breakout, which would be a new 52-week high for the ETF. A full “V” recovery rally projects a much higher target of $78. The $64 level is an important year-long pivot point,… Read More

There are two sides to every options trade since there is always a buyer and a seller in every market transaction. On options trades, the seller is said to be writing an option, and from the writer’s… Read More

The pullback this week in Teva Pharmaceutical Industries Limited (NYSE: TEVA) is an opportunity to use the power of options for a capital-preserving, stock substitution strategy. We’re seeing bullish divergence in Teva… Read More

The pullback this week in Teva Pharmaceutical Industries Limited (NYSE: TEVA) is an opportunity to use the power of options for a capital-preserving, stock substitution strategy. We’re seeing bullish divergence in Teva stock options‘ implied volatility with less fear on the latest price decline to new lows. This can mark a price bottom, as the emotional selling extreme may have been exhausted sellers. A failed test of the multi-year lows from 2009 and 2011 has formed a bullish base over the past… Read More

The pullback this week in Teva Pharmaceutical Industries Limited (NYSE: TEVA) is an opportunity to use the power of options for a capital-preserving, stock substitution strategy. We’re seeing bullish divergence in Teva stock options‘ implied volatility with less fear on the latest price decline to new lows. This can mark a price bottom, as the emotional selling extreme may have been exhausted sellers. A failed test of the multi-year lows from 2009 and 2011 has formed a bullish base over the past few weeks. The extreme low at $35 a share from two years ago is a point the stock can lean on for support.  A range has been established between $42 a share and $38 since May, which targets $46 on a breakout of the trading channel. That level is near the stock’s 52-week high and the technical breakdown point. As a rule, markets often return to breakouts to test trends. The $46 target is about 21% higher than current prices, but traders who use a stock substitution strategy could make more… Read More

Hedge funds have been lining up on both sides of the fence regarding nutritional supplement multi-level marketing company Herbalife Ltd. (NYSE: HLF). The stock made a 52-week high of $73 last spring before… Read More

Hedge funds have been lining up on both sides of the fence regarding nutritional supplement multi-level marketing company Herbalife Ltd. (NYSE: HLF). The stock made a 52-week high of $73 last spring before shares took a huge hit following accusations from hedge fund investor William Ackman that the company was nothing more than a pyramid scheme. The seven-month trading range between $56 and $42 a share projected a downside target of $28 ($14 height of… Read More

Hedge funds have been lining up on both sides of the fence regarding nutritional supplement multi-level marketing company Herbalife Ltd. (NYSE: HLF). The stock made a 52-week high of $73 last spring before shares took a huge hit following accusations from hedge fund investor William Ackman that the company was nothing more than a pyramid scheme. The seven-month trading range between $56 and $42 a share projected a downside target of $28 ($14 height of the pattern subtracted from the breakdown level of $42). A volatility spike occurred when the downside channel support at $42 was broken in December, and as often happens at price extremes, the selling pressured the stock to $24 before a rebound.  Recent action has seen the price rally back above breakdown point at $42, which acts as the pivot point, to about $44. As the battle between short sellers and value buyers continues, traders can use a different approach to profit from Herbalife. Because of the high volatility (another word for… Read More

The past year was a profitable one for most investors: The Dow Jones Industrial Average rose nearly 10%, while the S&P 500 and the Nasdaq rose around 15% each. Toss in dividends, and total returns were a few percentage points higher. Of course, the goal of… Read More