Stepping Into Energy
May 03, 2016
Trading Idea

Stepping Into Energy

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...

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3 years ago
Evaluating Earnings Variability
May 03, 2016
Earnings

Evaluating Earnings Variability

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...

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3 years ago
A Bombardier Covered Straddle
April 18, 2016
Stock Options

A Bombardier Covered Straddle

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?...

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3 years ago
What is a Reasonable Rate of Return?
April 14, 2016
Revenue

What is a Reasonable Rate of Return?

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....

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3 years ago
Volatility’s Impact When Hedging Market Exposure
March 16, 2016
Protection

Volatility’s Impact When Hedging Market Exposure

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...

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3 years ago
Tales from a Reluctant Gold Bull
February 29, 2016
Volatility

Tales from a Reluctant Gold Bull

In an effort to provide full disclosure I am not now nor have I ever been a raging gold bull. I am not convinced that gold provides crisis insurance or any kind of hedge against economic Armageddon. Personally if the global economy collapses under the weight of a currency crisis (note: the collapse of paper currency is the...

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3 years ago
Markets Down… Volatility Up!
February 01, 2016
Bearish Outlook

Markets Down… Volatility Up!

Worst start for equity markets since 2008! With more to come if you believe the prevailing view on Bay and Wall Street. Simply not enough “blood in the streets” according to the bears. Which itself is an interesting take since no one can provide clarity as to why markets had such a terrible start to the year. Aside from the...

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3 years ago
Belated Resolutions for the New Year
February 01, 2016
Trading Idea

Belated Resolutions for the New Year

I don’t usually make New Years’ resolution because I rarely keep them. But in my world there are times where you need to reassess how to best deal with the operational aspects of trading options. Unfortunately these reassessments are usually the result of costly mistakes. Resolution 1: Avoid expiration nightmares! Always...

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3 years ago
no-cover
September 02, 2015
Other

Seeking Income

Individuals invest for many reasons. Investing being the key word in that sentence. Investing is about making medium to long term commitments with a specific goal in mind. And it is more than simply saying I want to make money! In fact setting an objective can be the hardest decision individuals make. I should know I have spent...

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4 years ago
no-cover
September 01, 2015
Other

Oil Woes

Despite the noise surrounding the recent price action in oil, nothing much has changed. Note our blog published January 23, 2015 (Has Oil Bottomed?) I posited that oil would likely remain in a trading range between US $40 and US $60 per barrel for 2015. So far that is exactly as it has played out. Make no mistake this is a...

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4 years ago