CANADA – Recession Worries!
July 27, 2016
Trading Idea

CANADA – Recession Worries!

Probably the most noteworthy event in the first half of 2015 was the surprise rate cut issued by the Bank of Canada (BoC) in the first quarter. It was designed to provide “insurance against a downturn” in light of the sharp decline in oil prices. The BoC was right to be concerned. Unfortunately policymakers underestimated...

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3 years ago
The Time Horizon Chasm
July 09, 2016
Neutral Outlook

The Time Horizon Chasm

For the first half of 2015 global financial markets have been obsessed with short term noise. We have witnessed a succession of exacerbated reactions to on again off again negotiations with Greece, waste of time debates on the timing of a Fed rate hike or endless dissections of monthly jobs data where 20% revisions are more the...

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3 years ago
Brexit is a reality!
June 27, 2016
Index Options

Brexit is a reality!

Brexit is a reality! Despite the betting odds, despite the financial markets’ expectation that we would see a “remain” outcome, the British electorate knowing for bucking the odds voted to exit the European Union. And now we face the inevitable fallout. Unfiltered headline noise will set the stage this week. Witness the...

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3 years ago
Gold versus Gold Stocks
June 20, 2016
Bullish Outlook

Gold versus Gold Stocks

Gold has been on a tear recently. Not because of any real change in supply demand metrics. This is all about defensive positioning against a perceived devaluation of paper currency. In short gold bulls are playing the crisis insurance card… again! I am not about to tell you to buy gold. I’ve talked about it in the past but...

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3 years ago
Could Rates Go Lower?
June 13, 2016
Revenue

Could Rates Go Lower?

Could we see lower interest rates? On the surface it seems counterintuitive with North American rates near zero and a Federal Reserve on a track to normalization. But with some industrialized economies – notably Switzerland, Germany and Japan – issuing debt with negative rates, near zero is beginning to look like the best...

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3 years ago
Equivalent Option Positions
June 07, 2016
Trading Idea

Equivalent Option Positions

In the past couple of months, I authored three commentaries talking about covered straddles. There was the blog on Bombardier (April 18, 2016), another on energy stocks (May 3, 2016) and finally one on gold stocks (May 9, 2016). I call it the double up double down approach to investing. Without re-hashing the specifics of the...

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3 years ago
Is it real?
May 31, 2016
Bullish Outlook

Is it real?

The TSX composite index finished higher for a third consecutive day. Might have been four had Monday not been a holiday. But… is it real? Mindful that a three-day rally does not make a bull market it appears there has been a major change in sentiment. Rallying in the face of higher oil prices is a shift in sentiment. As is...

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3 years ago
ESP For Option Traders
May 31, 2016
Bullish Outlook

ESP For Option Traders

A covered call strategy carries about 50% to 70% of the risk associated with a long equity position. We accept that thesis as a rule of thumb, but how does one square that position mathematically? The simple answer is to evaluate the downside protection accorded by the premium. We receive more money and, by extension, more...

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3 years ago
Playing Defence with Cash Secured Puts?
May 16, 2016
Protection

Playing Defence with Cash Secured Puts?

I have a love hate relationship with Canadian financial institutions. Canadian banks are tough competition for someone in the money management business. As an investment however, they are well capitalized – more than can be said for many European banks – and pay healthy dividends, which are bumped up on a regular basis. Or...

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3 years ago
Gold Covered Straddles
May 09, 2016
Bullish Outlook

Gold Covered Straddles

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...

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3 years ago