All investors need to be wary of inflation. After all, it poses a risk to your portfolio, and it can adversely affect your bottom line. To be fair, inflation isn’t necessarily bad all the time. As the MoneySense article ‘How to Inflation-Proof Your Portfolio’ notes, inflation can be a positive, especially given today’s economic climate.
“The only thing new in the world is the history you don’t know.” -Winston Churchill.
“It is critical to understand human nature if you want to succeed at investing. Basing their decisions on short-term results is in fact the biggest mistake investors make.” - Jim O’Shaughnessy.
Options traders often overlook the nature and role of diversification. In picking one strategy over another, and in deciding which companies to use for options trading, diversification should be one of the attributes worth study. Why do options traders need to think about diversification?
One of the most common questions Steady Options receives relates to managed accounts. Lorintine Capital is offering managed accounts for both Anchor Trades and Steady Momentum. This post will detail the current Steady Options managed account offerings and how they work.
The S&P 500 Index advance continues from its December 26th low at 2346.58, but it’s yet to exceed the December 3rd high at 2800.18.Will it continue?Will it crash? Will the bulls get their way? Find out in our short market review, followed by strategy suggestions, created using our Probability Calculator, currently available to all Steady Options subscribers.
SteadyOptions trades a variety of option strategies – straddles, hedged straddles, calendars, butterflies and iron condors, volatility trades, etc..Frequently these trades are designed to work together and complement each other, so for the last several years Steady Options has only analyzed total performance.
One of my all-time favorite investing books is Jeremy Siegel's Stocks For The Long Run, which is currently in its 5th edition. It's a true classic that I refer back to often. Professor Siegel lays out the compelling case for equities over extended time horizons such as 20 or 30 years.
Few days ago I came across a Seeking Alpha article called Why I Never Trade Stock Options. This is probably one of the most misleading articles I have read in years. I would like to put things in perspective and provide a rebuttal to some of the claims in the article.
The “common knowledge” about uncovered calls is that they are always high-risk. Conservative traders should avoid them. But is this always true? Risk bymost definitions is associated with specific strategies. So covered calls are low-risk and uncovered calls are high-risk. But this assumption is not always a fair one.
Perhaps the toughest part of trading options is figuring out what to do. For this we have advisors, seminars, newsletters and more. Yet, one tool that all investors need, but few utilize adequately, is data. This concept is parroted across the industry, but how does the average investor move from the desire to utilize data to the actual practice?
Many that sell equity market put options focus on the S&P 500 (SPX, XSP, SPY). Some will add small caps by selling puts on the Russell 2000 (RUT, IWM). An investor could also make their put selling strategy globally diversified by adding MSCI EAFE (EFA) and Emerging Markets (EEM).
The “random walk hypothesis” (RWH) is one idea about how stock prices behave – but only one of many. It is a theory promoted in academia and believed in my many, but not so much by traders involved with handling real money. Theories aside, is the market truly random?
