Options: American Vs. European Exercise
Options traders are normally familiar with American-style exercise. Under this system, used for listed stock options, you can exercise at any time between opening a position and exercise date. But...
View ArticleWhy Trendlines Are Excellent Tools for Techical Analysts
When it comes to technical analysis, many chartists and analysts tend to over-complicate the matter. What most of us need is a simple, straightforward indicator that shows visually exactly what is...
View ArticleImportant Selection Criterion for Dividend Achievers
It is all too easy for investors to overlook dividend yield when picking stocks. However, dividends represent the most consistent form of income and, depending on the market, a consistent and reliable...
View ArticleCandlestick Formations: Understanding the Engulfing Pattern Reversal Indicator
One of the most reliable candlestick formations is call the engulfing pattern. It is found often and is a stronger reversal indicator than most other signals.It consists of two sessions. In the bear...
View ArticleOptions Trading Strategies: Is the Option Box Spread Worthwhile?
Some option strategies are elegant in the sense that they create an exchange of profit potential and risk. If you are willing to accept a limited profit in exchange for eliminated risk, some spreads...
View ArticleThe Problem of Leverage and Some Potential Solutions
Most investors and traders have heard of leverage, and it can be viewed in several ways. Some believe that it is smart or sophisticated to invest using OPM (other people's money), which just means...
View ArticleHow a Fundamental Trader Can Use Volatility
Volatility usually indicates the tendency of a stock's price to move within its trading range. If the trading range is narrow (meaning few points between resistance and support), volatility tends to...
View ArticleUsing Relative Strength Index to Confirm a Stock's Momentum
Relative strength index ("RSI") is one of the most popular and reliable momentum oscillators. Its visual simplicity shows at a glance when a stock is overbought or oversold. Originally developed by J....
View ArticleUsing the Dividend Timing Collar in Options Trading
Dividend yield all too often is overlooked by options traders. However, dividends may represent a significant portion of total return. There is one system that reduces market risk while converting...
View ArticleMatching Investments to Your Risk Tolerance
The selection of one investment over another should not be limited to a gut instinct. For example, if you like Coke more than Pepsi, that by itself is not reason enough to buy Coca-Cola stock. The...
View ArticleReviewing the Essential Facts of Leveraged ETFs
Mutual fund investors have enjoyed professional management and diversification for decades. However, the latest version of mutual funds -- the exchange traded fund (ETF) -- has taken a big part of the...
View ArticleAre Agribusiness Leveraged ETFs the Best Commodity Play?
Within the leveraged ETF sector, agribusiness recently has been one of the most popular and successful. Commodities in general have been very popular recently as an alternative to stocks....
View ArticleUnderstanding the Bearish Squeeze Alert Candlestick Pattern
One of the more unusual three-session candlestick indicators is the bearish squeeze alert. It is one of those patterns consisting of white sessions, but foreshadowing a downturn.In the pure form of...
View ArticleCalculating Margin for Leveraged ETFs
Margin calculation for most long positions is straightforward: 25% maintenance margin requirement is a standard. On leveraged ETFs, however, the calculation is more complex.Because leverage means 2x...
View ArticleWhy Leveraged ETFs Are Not for the Nervous Trader
As with any and all investment choices, the question of risk should be at the top of your decision tree. If the risk is too great, look elsewhere. If the risk is acceptable, seek ways to mitigate or...
View ArticleDaily Rebalancing: How Leveraged ETF Exposure Works
Leveraged ETFs are more complicated than the standard ETF, especially when it comes to calculations of daily rebalancing. Due to the leverage attribute itself – in which ETFs change 2x or 3x the...
View ArticleETF Investing: Diversification Vs. Dividends
Many ETFs do not pay dividends to shareholders, so for these a comparison of value has to be made between dividend yields on a stock or mutual fund portfolio, and the value of diversification through...
View ArticleFour Steps to Solving Covered Call Risk
To many traders, it seems the covered call is the perfect strategy. Too perfect, perhaps? Its fans point to the great "win no matter what" features: 1. If you pick a strike above your original cost,...
View ArticleLeveraging 100 Shares of Stock for Little or No Cost
This is an example of an options strategy that allows you to have the same experience of owning 100 shares of stock you expect to rise in value ... but for little or no cost. How is this possible? The...
View ArticleThe Ratio Write: Risks and Benefits
Most covered call writers take comfort in the relative safety of the position. The premium from the call gives you downside protection, discounting your basis in the stock. But the risk is still...
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