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Apple Options Trade After an Earnings Beat

If you've ever seen a stop rip off of earnings and wondered if that was a signal for a trade, or if the momentum would continue, then this is exactly the back-test you are after. We call it "star gazing" when a stock rips and we're stuck -- with no idea what to expect next. 

Stoking the Embers of Inflation

Monetary Velocity, an oft-misunderstood metric that quantifies the pace at which money is spent, has recently shown signs of rising after trending lower for the better part of the last decade. Since increasing velocity is frequently associated with inflation, it comes as no surprise the Federal Reserve (Fed) has upped their vigilance towards inflation.

PANW Broke the Golden Rule

At 5:35 EST on Friday afternoon, Palo Alto networks announced market moving news and broke the golden rule of good governance -- they buried the news in a late Friday afternoon release so the media couldn't cover the story and the market couldn't react until the weekend was over. 

Synthetic Long Stock for Extreme Leverage

Among the many options strategies, one of the most interesting is synthetic long stock.  This combines a long call and a short put opened at the same strike and expiration. The name “synthetic” is derived from the fact that the two positions change in value dollar for dollar with changes in 100 shares of stock.

If Our Options Trade Wins, Who is Losing?

My Cabot Options Traders have had some monster winners trading options in 2018, with huge paydays in Cisco (CSCO)—a gain of 565%, Nutanix (NTNX)—a gain of 307%, Union Pacific (UNP)—a gain of 227% and most recently Axon Enterprise (AAXN)—a gain of 175%. It’s been a lot of fun.

There’s Volatility To Be Found….. In Turkey

Since the correction in US markets from February to April, things have really quietened down since. Volatility is back to a 12 handle, stocks are rallying and all seems well with the world. The falling volatility is great for long term investors, but as options traders, we love high volatility and it’s becoming increasingly hard to find once again.

How to Hedge a Position with Options

Options are used in 3 main ways: Premium selling, where you are being paid to assume risk; Speculation to leverage movements in price; and Hedging where you pay a premium to reduce/take risk off. It’s easy as traders to focus solely on speculation and premium selling – we’re probably most focused on making a profit.

Buy High, Sell Low: Why Investors Fail

While investing in financial markets over the long-term is an excellent path to wealth, it’s not unusual to experience occasional losses as investment values go up and down. So if the markets go up over time, why is it that most investors lose money in the stock market?

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