Yearly Archives: 2016

Gold Covered Straddles
May 09, 2016
Bullish Outlook

Gold Covered Straddles

Richard Croft

I talked about gold… reluctantly, back in February. I also read with interest comments from Patrick Ceresna who, also in February, penned a two-part thesis on why gold should move higher. And Patrick provided some strategies for investors to take advantage of his bull case which, I might add, have paid off handsomely. I also...

1081
0
1
4 years ago
Stepping Into Energy
May 03, 2016
Trading Idea

Stepping Into Energy

Richard Croft

Is the energy market becoming energized? It is a tough question laden with ambiguity. Evidenced by reams of well thought out research where slight changes in the inputs can shift the bias from bull to bear and back again. Interesting the foundation for most of the research concentrates on output. How much supply OPEC and...

924
0
Like
4 years ago
Evaluating Earnings Variability
May 03, 2016
Earnings

Evaluating Earnings Variability

Richard Croft

We often hear about the expected movement in a stocks’ share price based on an upcoming earnings release. Calculated as an implied trading range by reverse engineering the option pricing formula. Traders typically use some version of the Black Scholes option pricing model to calculate the theoretical fair value for a call and...

1553
0
Like
4 years ago
Hedging Hope
May 03, 2016
Protection

Hedging Hope

Patrick Ceresna

Those that regularly follow my articles and forecasts can easily ascertain that I am a worry wart. Fortunately, or unfortunately I am always skeptical on overly optimistic views on stocks and the economy. So what am I skeptical on now? I am skeptical on the supposed turn around in the Canadian economy. Yes, things have improved...

1060
0
Like
4 years ago
A Bombardier Covered Straddle
April 18, 2016
Stock Options

A Bombardier Covered Straddle

Richard Croft

There is little doubt that Bombardier (TSX: BBD.B, Friday’s close $1.62) is on life support. At issue is the diagnosis. Does the company follow in the footsteps of Blackberry to survive as a shadow of its former self? Or does the company collapse under a mountain of debt and litigation in much the same way as Nortel?...

1511
0
1
4 years ago
What is a Reasonable Rate of Return?
April 14, 2016
Revenue

What is a Reasonable Rate of Return?

Richard Croft

There has been a lot of debate lately about the expected long term performance of equity markets. It comes down to a simple question; what is a reasonable rate of return? To paraphrase Bob Dylan, the numbers; they are a changing! Ask most investors and they will tell you that double digit returns are possible, if not probable....

1100
0
Like
4 years ago
Has the Tide Turned for the Canadian Economy?
April 01, 2016
Index Options

Has the Tide Turned for the Canadian Economy?

Patrick Ceresna

The last two months have dynamically changed the narrative toward the Canadian economy. Over those two months, the markets have substantially shifted, including: 15% rise in the Canadian Dollar from its $0.68 lows to its current levels around $0.78. 27% rise in oil prices from their lows below $30.00 to around $38.00 today. 16%...

1093
0
Like
4 years ago
Generating Income With a Limited Risk
March 24, 2016
Revenue

Generating Income With a Limited Risk

Jason Ayres

Selling or writing options can be a great way to generate cash flow as a compliment to a diversified investment approach. In general, the strategy involves selling a call or a put and getting paid to take on the obligation to either deliver or purchase the underlying shares at the strike price agreed upon. The objective of the...

1305
0
Like
4 years ago
Volatility’s Impact When Hedging Market Exposure
March 16, 2016
Protection

Volatility’s Impact When Hedging Market Exposure

Richard Croft

Volatility represents the underlying stock price fluctuation, not the price trend. The degree of fluctuation can vary whether a stock’s price trend is bullish and advancing, bearish and declining, or remains in a steady range over time. Historical volatility can be calculated based on a stock’s actual past trading...

1177
2
Like
4 years ago
Will Gold Glitter Again – Part II
February 29, 2016
Index Options

Will Gold Glitter Again – Part II

Patrick Ceresna

With gold having a strong start to the year and a solid 20% off its 2015 lows, the bulls vs. bear’s arguments have taken center stage. Let’s review both arguments. Bear Case for Lower Gold Gold is an inflation hedge and performs poorly in deflationary times. The most commonly referenced example is the 20-30% decline in gold...

1156
0
Like
4 years ago