Protective Collars
Written by George Traganidas Topics: Articles, Options, Wealth BuildingFool.com
By Jeff Fischer
August 10, 2009
Protective collars are useful in bear markets or when you’re uncertain about a stock’s valuation risk. They can also be a prudent way to protect your gains on stocks that have recently leaped in price, nearing your estimate of fair value. Let’s explain how collars work, starting from the beginning.[...]
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Writing Covered Calls
Written by George Traganidas Topics: Articles, Options, Wealth BuildingFool.com
By Jeff Fischer
August 10, 2009
Why use covered calls?
- Income: To generate cash on a stable stock.
- Defense: To profit if a stock you own slips in price.
- A better sell price: To obtain a higher price when you’re ready to sell.[...]
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Writing Puts
Written by George Traganidas Topics: Articles, Options, Wealth BuildingFool.com
By Jeff Fischer
August 10, 2009
Why write puts?
- Income: To make money while waiting for your preferred buy price on a stock.
- Advantage: To buy stocks at a lower net cost.
- Profit: To earn income from stocks you believe will hold steady or increase modestly.[...]
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Buying Puts
Written by George Traganidas Topics: Options, Wealth BuildingBuying a put gives you the right to sell the underlying stock at a set price (the strike price) by a specified date (the expiration date). Your maximum loss with a put is limited to what you pay for the option up front (the premium).
Buying put options is a great way to profit from a stock’s fall while putting less of your cash at risk. In addition, you can buy puts to protect a stock – one that you’re bullish on for the longer term – from a near-term price drop. Buying protective puts can also help make your portfolio immune to a market crash.[...]
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Buying Calls
Written by George Traganidas Topics: Articles, Options, Wealth BuildingFool.com
By Nick Crow
August 12, 2009
Why buy calls:
- You believe a stock has a strong catalyst for appreciation over the coming months or few years.
- You want to benefit from a stock’s upside, but put less capital at risk than buying the stock outright.
- You want to leverage your bullish expectations on a stock you already own.[...]
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Options Glossary
Written by George Traganidas Topics: Options, Wealth Building
American style: Options contracts that can be exercised at any time after purchase and before the expiration date.
Assignment: When the options writer (also called the seller) is forced to buy (for a put writer) or sell (for a call writer) the underlying stock. Essentially, your counterparty has exercised its option contract, which you wrote, to buy or sell the underlying stock.
At-the-money: An option whose underlying stock is trading at its strike price.
Bearish: An options strategy (and outlook) that achieves its maximum payoff when the underlying stock drops in price. For example, if you are bearish on a stock you know well, you could buy a put or a bear put spread.[...]
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Introduction to Options
Written by George Traganidas Topics: Options, Wealth Building
Why Options?
Options are excellent tools for generating income, protecting profits, hedging, and, ultimately, earning outsized gains. They can generate returns in flat markets, cushion the blow of down markets, and be outstanding performers in decent markets. Whatever your investment goals, options can be a powerful addition to your portfolio, used to hedge, to short, to produce income, and to obtain better buy and sell prices.
What Are Options?
Stock options formally debuted on the Chicago Board Options Exchange in 1973, although option contracts (the right to buy or sell something in the future) have been around for thousands of years. An option gives the holder the right, but not the obligation, to buy or sell an underlying stock at a set price (the strike price) by a set date (the expiration date). The option contract allows you to profit if a stock moves in your favor before the contract expires. Not all stocks have options, only those with enough interest and volume. There are only two types of options: calls and puts. A call appreciates when the underlying stock rises, so you buy a call if you are bullish on that company. A put appreciates when a stock declines. You buy a put if you believe a stock will fall or to hedge a stock that you already own.[...]
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Quotes Oscar Wilde
Written by George Traganidas Topics: Quotes
A cynic is a man who knows the price of everything but the value of nothing.
— Oscar Wilde
A dreamer is one who can only find his way by moonlight, and his punishment is that he sees the dawn before the rest of the world.
— Oscar Wilde
A gentleman is one who never hurts anyone’s feelings unintentionally.
— Oscar Wilde
A little sincerity is a dangerous thing, and a great deal of it is absolutely fatal.
— Oscar Wilde
A man can be happy with any woman, as long as he does not love her.
— Oscar Wilde
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Quotes Paulo Coelho
Written by George Traganidas Topics: Quotes
Be brave. Take risks. Nothing can substitute experience.
— Paulo Coelho
Beauty is the greatest seducer of man.
— Paulo Coelho
Every blessing ignored becomes a curse.
— Paulo Coelho
Everything that happens once can never happen again. But everything that happens twice will surely happen a third time.
— Paulo Coelho
If you start by promising what you don’t even have yet, you’ll lose your desire to work towards getting it.
— Paulo Coelho
Life was always a matter of waiting for the right moment to act.
— Paulo Coelho
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Quotes Thomas A. Edison
Written by George Traganidas Topics: Quotes
Anything that won’t sell, I don’t want to invent. Its sale is proof of utility, and utility is success.
— Thomas A. Edison
Be courageous. I have seen many depressions in business. Always America has emerged from these stronger and more prosperous. Be brave as your fathers before you. Have faith! Go forward!
— Thomas A. Edison
Being busy does not always mean real work. The object of all work is production or accomplishment and to either of these ends there must be forethought, system, planning, intelligence, and honest purpose, as well as perspiration. Seeming to do is not doing.
— Thomas A. Edison
Discontent is the first necessity of progress.
— Thomas A. Edison
Everything comes to him who hustles while he waits.
— Thomas A. Edison
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