Options are a leveraged instrument, and if you’re not careful, it’s easy to find yourself exposed to more risk than what you’re comfortable with. A subscriber to All Star Options pinged me this week with some questions and I thought our discussion might be fruitful to everyone… [Read more…]
[Options Premium] The Most Compelling Idea from the Promising “Solar Patch”
I was confused too. But no, $DQ is not America’s favorite destination for shakes, malts, and blizzards. But it is sexy in it’s own way — it’s an energy company named Daqo New Energy in one of the hottest sectors we think will be leading stocks higher this year — Solar Energy. According to wikipedia, $DQ is a Chinese company “engaged in the manufacture of monocrystalline silicon, polysilicon, and silicon wafers, primarily for use in solar photovoltaic systems.” OK, sounds cool? It really doesn’t matter to us, we’re just following price, and we’re going to trade it with options in a defined risk spread. [Read more…]
[Options Premium] We’re Bullish on Biotechs
It might sound like we’re beating a dead horse here, but the Russell 2000 printed another new all-time high yesterday (I know, it ended up being a red day, but that volume tho…) and there’s just no way I can view this with any bearish context. Sure, perhaps it’s extended and due for a rest (or gasp, a pullback) but it’s simply irresponsible to be spouting actively bearish broader market calls in this environment right now.
As such, the team at All Star Charts keeps digging into the sectors that are looking like candidates to lead the next leg of stock market gains higher. Today, we’ve got our eye on the Biotech sector. [Read more…]
[Options Premium] Calling Up The Next Clubhouse Leader
The team here at All Star Charts is very bullish on the Oil & Gas Exploration & Production sector as discussed here (premium). Before we get into how we’re going to play it, here’s a little background to give color for our optimism for the opportunity we see, from our kid off the bench Tom Bruni:
After a long period of indecision and relative underperformance, the Oil & Gas Exploration & Production ETF $XOP is finally breaking out to the upside and confirming a new long-term uptrend. Many stocks within the sector have spent years making no progress and are now finally breaking out to the upside. Normally we focus on sectors showing relative strength and hitting new all-time highs like software (premium), but every sector has its day eventually (see retail) and it looks like these energy names are finally ready to participate in the broader market’s rally.
As Tom mentioned above, we normally like to play where relative strength and established trends work as tailwinds to help along our trades, but sometimes you gotta take a chance on situations that are showing signs of being the next market leader. Like that kid in the minor leagues that gets a call up when the team is struggling, sometimes you just have to go deeper to find the next clubhouse leader.
Here’s how we’re going to step up with the sector leader (in our opinion):
[Options Premium] Low $COST Breakout?
Excuse the pun, it was too easy.
Everybody loves a deal. And that couldn’t be more obvious after looking at a monthly chart of Costco $COST going back to the financial crisis that bottomed out in 2009. Shoppers clearly have been filling Costco parking lots and their carts, as the monthly chart has been a beautiful uptrend with very little volatility. [Read more…]
All Star Charts EDU, Now Including FREE Options Content!
One of the great things I’ve experienced while getting All Star Options off the ground with JC has been putting pen to paper to really codify for myself how I view options trading. It’s one thing to have a nebulous sort of idea of how I approach certain options strategies and when and how I might employ them, but it’s quite another to sit down and really break down how each strategy should work, how it fails, my plans for taking profits and/or cutting losses and opportunities for position adjustments.
Instead of hoarding all this brainstorming for myself, we’ve decided to add it to the Education section of Allstarcharts.com so that you, too, can have easy reference points for thinking through your own trades.
The thing about options strategies is — there really isn’t any one way to trade each strategy. There are many common practices, but we all have our own interpretations. Mine aren’t necessarily better or worse than anybody else’s, but I think you’ll benefit from seeing my perspective. We can all benefit from opening our eyes to seeing ways that others interpret or perceive opportunities. If you take one small nugget away from what we share here that serves to earn you some profits or reduce some risks, especially if it’s a repeatable best practice, then this was time well spent. [Read more…]
[Options Premium] A Bearish Bet in Treasury Bonds
In JC’s All Star Charts May Monthly Conference call for subscribers, there was a theme that he consistently revisited: Bonds are going lower.
There’s no need to over-complicate this stuff. We could waste time arguing about what increasing interest rates means for the stock market, or yield’s implications on policy decisions in Washington, the effect to be felt in the housing market, or how retirees savings may or may not be effected. That might fill airtime on SHOUT!TV, but all we care about here is positioning ourselves to make money. Leave the intellectual debates to the talkers.
We’re the doers, and we want to position ourselves for further downside in bonds. [Read more…]
[Options Premium] If You Love The Software Sector Breakout…
…then you simply have to get long The Granddaddy Oracle $ORCL here.
It appears Oracle has successfully digested the hit the stock took after it’s most recent earnings report, and the stock is hanging just above the highs it set back in the year 2000! I could be wrong, of course, but I just don’t see $ORCL holding around these levels for too much longer. There’s just no way it recoups 2000 levels and then just stops here. [Read more…]