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Balancing your portfolio

As a non-directional trader, I'm trying not to be dependent on the market direction. My goal is to make money in any market. To achieve that goal, I need to constantly balance my portfolio in terms of direction and volatility.

What A High Beta Means For Apple

Apple (AAPL) closed April 16 at $580.13, down 10% from its all-time high of $644. It is now down for five consecutive days, something that hasn't happened since last October. What is behind the selloff and what does it mean for the stock?

6 Ways To Play Apple's Earnings

Apple (AAPL) reports earnings on Tuesday, April 24, 2012, after the market close. There are many ways to play earnings. Some people would bet on the direction of the stock movement after the announcement and then buy or short the stock. Others will buy call or put options.

Trading Apple's Pre-Earnings Run

Apple (AAPL) will report earnings on Tuesday, April 24, 2012, after the market close. Will it be another blowout quarter? Many people are sure it will.

Looking at the last couple years, the stock has a tendency to run up at least 3-5% during the last couple of weeks before earnings. Simply buying OTM (Out Of The Money) calls two weeks before earnings and selling them before the announcement would work well most of the time.

Exploiting Earnings - Associated Rising Volatility

About six months ago, I came across an excellent book by Jeff Augen, “The Volatility Edge in Options Trading”. One of the strategies described in the book is called “Exploiting Earnings - Associated Rising Volatility”. Here is how it works:

  1. Find a stock with a history of big post-earnings moves.
  2. Buy a strangle for this stock about 7-14 days before earnings.
  3. Sell just before the earnings are announced.

Myths And Misconceptions Of Options Trading

Options can be risky, even very risky, but they don't have to be. Today I'm starting a series of articles about options trading. I will show you how options can be less risky or more risky, depending on your risk tolerance. I will show you that there is more than one way to make money with options. I will expose some of the myths and misconceptions about options trading.

Why I Wouldn't Trade Apple Right Now

Let me begin by saying this: I think that Apple (AAPL) is one of the greatest companies in history. I love the company and own some of its products. But I wouldn't trade it right now. In this article, I will try to describe the price action on Apple from an options trader perspective.

Apple: Dissecting The Butterfly Trade

In one of my previous articles, I described the craziness around Apple (AAPL) options as reflected by the options premiums. At some point, the IV (Implied Volatility) jumped to 41%. I presented the following butterfly trade as one possible way to take advantage of this inflated IV:

5 Ways To Play Google Earnings

Google (GOOG) reports earnings on Thursday, April 12, 2012, after the market close. There are many ways to play earnings. Some people would bet on the direction of the stock movement after the announcement and buy or short the stock. Others will buy call or put options. My opinion is that predicting the market reaction to earnings is an extremely difficult task.

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