One of the names that stood out for me in the latest Under the Hood report, was unsuspecting. These days I expect the names that are popping up there to be the sexy tech high flyers and/or cheaper low cap speculative names. But a certain name with a pretty popular cheerleader caught my attention. [Read more…]
[Options] Public Service Announcement for Big Cap Long Stock Holders
If I was a long holder of big positions in $AAPL, $AMZN, $TSLA, $FB, $GOOG — any of the teracaps…. I’d be selling way OTM covered calls like a wild man here.#SKEW
— Sean McLaughlin, NLD 📈 (@chicagosean) September 1, 2020
Covered Calls is not a strategy we employ often at All Star Options, as there are better more efficient ways to use our capital to express similar bets.
But for any of you reading this who may be holding legacy long positions in stocks in the biggest names and highest flyers in the universe right now (think “FAANG” stocks, and your TSLA’s and Zoom’s and Peleton’s, etc), we’re seeing an unusual situation where many of these names are exhibiting skew that is resulting in options prices for upside calls being more expensive than downside puts an equal distance away. [Read more…]
[Options] September Positions Review
As September gets under way, it’s time to review positions with September options that remain open (haven’t already hit profit targets or been stopped out).
Most trades I put on for All Star Options tend to have a minimum duration of 30 days (short premium plays) and often as long as 6-8 months (for long premium plays). As options approach expiration, greeks like theta and gamma start to become my enemy and whipsaw my P/L. Therefore, as options and spreads get into the expiration month, my best practice is to put each position on notice — it’s time to take action.
This month, we only have one position with September options remaining on the books. All the rest have already hit their profit targets or stop loss levels. In the scoreboard below I denote the date we exited each position.
Here’s the scoreboard: [Read more…]
[Options Premium] Going Back In For Another Attempt
A semiconductor name that we got into a few weeks back stopped us out, and that sucked. But the beauty of honoring stop losses and stepping aside is that it allows us to gain fresh perspectives on new setups.
Armed with this new perspective, as well as seeing the stock show up in a recent Under the Hood report has me ready to test the waters again. [Read more…]
[Options] Best Practices: Taking Risk Off The Table
One of the things I preach in the All Star Options service is to manage risk by defining risks up front or having strict stop loss levels in place. And on the flip side of that equation, I also repeat over and over the need to remove risk from winning trades when given the opportunity — particularly in long call or put plays.
When holding long calls or puts, my rule of thumb is to always sell half of my position when I’ve doubled my money. [Read more…]
[Options] I’m on the Dow Train!
Salesforce, Amgen, and Honeywell were all welcomed into the Dow Jones Industrial Industrial average this week. And all three are being greeted by enthusiastic investors. (Especially Salesforce $CRM!)
While the first two names are in sexy industries, don’t sleep on Honeywell $HON. Here’s what JC said in a recent post on the new Dow additions:
Here’s a chart of Honeywell, which I’m not sold on yet. I think it does break out, but I think this is only something to be long if we’re above 165. Below that and there is too much opportunity cost, I believe.
[Options Premium] We Gotta Ride The Winners
It is undeniable that the current market environment is rapidly weeding out companies that cannot survive in a digital world, and handsomely rewarding those that can.
And it isn’t always the super high tech, VC-backed, trendy startup company that benefits. There are plenty of “old-school” names positioning themselves for the new reality of commerce in our new world. Thankfully, we don’t need to be “futurists” who can predict the future of social, economic, and government trends. All we need to do is keep a careful eye on where investors are allocating capital and the resulting price action tells us everything we need to know.
Our trade idea today is in one of those old school retailers that’s reinventing itself in new school ways. [Read more…]
[Options Premium] Book em, Danno!
I know, I know. I’m showing my age with this reference. But even this one is old for me. But it goes with the theme for today’s trade:
We want to be buying stocks in the healthcare tech space. And today’s trade is in a stock that looks ready to resume it’s march higher. [Read more…]
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