Loans Articles
81: Tax Deferral Strategies
For years up until the burst of the bubble, investors needed
only to be right about which stock to buy. Should they buy XYZ,
ABC or PDQ? The philosophy at the time led investors to believe
that the
http://marabe7.com/ALL/Finance/Loans/Tax-Deferral-Strategies.html82: Glossary
AT-THE-MONEY: An option whose strike price is equal to the
current market price of the underlying stock.
ASSIGN: To designate an option writer (seller) for fulfillment
of his obligation to sell s
http://marabe7.com/ALL/Finance/Loans/Glossary.html83: Unusual Options Volume & Other Clues In - The Stock Replacement Covered Call Strategy
Sometimes, Wall Street has a very convoluted way of looking at
things. For instance, consider the term “smart money.” One would
think the term “smart money” would refer to a professional
investor w
http://marabe7.com/ALL/Finance/Loans/Unusual-Options-Volume-_-Other-Clues-In-The-Stock-Replacement-Covered-Call-Strategy.html84: Spreads, Straddles, and Strangles in - The Stock Replacement Covered Call Strategy
We have demonstrated how well options function in unison with a
stock position. They enhance potential gains and provide profit
protection. They enable us to manage specific risk in a single
stock
http://marabe7.com/ALL/Finance/Loans/Spreads,-Straddles,-and-Strangles-in-The-Stock-Replacement-Covered-Call-Strategy.html85: Key Point In - The Stock Replacement Covered Call Strategy
Key Point – The fact that you are creating the covered callstrategy (buy-write) by doing the vertical spread is veryimportant to note. For margin purposes, the vertical spread willbe margined at a muc
http://marabe7.com/ALL/Finance/Loans/Key-Point-In-The-Stock-Replacement-Covered-Call-Strategy.html86: Advanced Strategies - The Stock Replacement Covered Call Strategy
Recently, (October and November ‘03), the giant biotech Amgen
(AMGN) came under some intense pressure, trading down about
$12.00 before it found what appeared to be a decent level of
support, and b
http://marabe7.com/ALL/Finance/Loans/Advanced-Strategies-The-Stock-Replacement-Covered-Call-Strategy.html87: Key Point in Collar Strategy
Key Point – The collar strategy allows for a limited butcontinued capital appreciation of a long stock position whileproviding for a limited, fixed downside exposure. The positionis very inexpensive t
http://marabe7.com/ALL/Finance/Loans/Key-Point-in-Collar-Strategy.html88: The Collar Strategy
Another protective strategy that allows for some upside capital
gain while providing maximum down side protection is the collar.
The collar is a combination of the covered call and protective
put
http://marabe7.com/ALL/Finance/Loans/The-Collar-Strategy.html89: Key Point in Protective Put Strategy.
Key Point - The protective put strategy, when used correctly,
will allow investors to take advantage of some opportunities
that could provide large potential gains without being exposed
to the seve
http://marabe7.com/ALL/Finance/Loans/Key-Point-in-Protective-Put-Strategy.html90: How Can Protective Put Strategy be Adjusted?
The Protective Put Strategy can be adjusted to address the
particular lean that the stock owner has at a particular time.
(The term lean describes the stock owner’s perception of the
directional st
http://marabe7.com/ALL/Finance/Loans/How-Can-Protective-Put-Strategy-be-Adjusted-.html91: Options Trading Strategies - Rolling
Rolling is defined in options as moving a position from one
strike to another either vertically in the same month,
horizontally to another month or some combination thereof.Other times, you may have
http://marabe7.com/ALL/Finance/Loans/Options-Trading-Strategies-Rolling.html92: Options Trading Strategies - Lean
Professional traders use the term “lean” to refer to one’s
perception about the directional strength of the stock. When you
own a stock and intend to hold it for a period of time, you are
aware tha
http://marabe7.com/ALL/Finance/Loans/Options-Trading-Strategies-Lean.html93: The "Stagnant" Scenario vs. The "Down" Scenario
The “stagnant” scenarioWhen we apply the covered call strategy to the stagnant stockscenario, we take a negative return scenario and turn it into apositive scenario. Remember, when we sell an option,
http://marabe7.com/ALL/Finance/Loans/The-Stagnant-Scenario-vs-The-Down-Scenario.html94: The "Up" Scenario
In the “up” scenario, the maximum gain that can be attained isthe stock finishing at $10.00 or higher.At $10.00, you would profit from the full value of the extrinsicvalue of the option which is $.50
http://marabe7.com/ALL/Finance/Loans/The-Up-Scenario.html95: Time Decay
Time decay, also known as theta, is defined as the rate by which
an option’s value erodes into expiration. The value of the
option over parity to the stock is called extrinsic value.Since an option
http://marabe7.com/ALL/Finance/Loans/Time-Decay.html96: The Covered Call / Buy-Write Strategy
For better or worse, most investors purchase stocks with the
intent of holding their shares for an extended period of time.We do this mainly because the media and industry professionals
have drilled
http://marabe7.com/ALL/Finance/Loans/The-Covered-Call-Buy-Write-Strategy.html97: Advantages & Disadvantages of At-the-money Option, In-the-money Option and Out-of-the-money Option
An at-the-money option has both advantages and disadvantages
over stock and in-the-money options. First, the at-the-money
option will be cheaper then both the stock and the in-the-money
option. So
http://marabe7.com/ALL/Finance/Loans/Advantages-_-Disadvantages-of-At-the-money-Option,-In-the-money-Option-and-Out-of-the-money-Option.html98: Trading Naked Calls and Puts
An option is a derivative trading product that is best used by
investors as a hedging tool providing profit protection and
profit enhancement. Although it is a powerful risk management
tool, it can
http://marabe7.com/ALL/Finance/Loans/Trading-Naked-Calls-and-Puts.html99: Options Trading Strategies
Webster’s Dictionary defines the term strategy as “ 1 a) the
science of planning and directing larger scale military
operations, specifically (as distinguished from TACTICS) of
maneuvering forces i
http://marabe7.com/ALL/Finance/Loans/Options-Trading-Strategies.html100: Put Option
A put option is a contract between two parties (a buyer and a
seller) whereby the buyer acquires the right but not the
obligation to sell a specified stock or other underlying
instrument at a speci
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