no-cover
August 01, 2015
Other

Managing a Collared Position

Managing a Collared Position DEFINITION OF ‘COLLAR’ 1. The purchase of an out-of-the money put option is what protects the underlying shares from a large downward move and locks in the profit. The price paid to buy the puts is lowered by amount of premium that is collect by selling the out of the money call. The...

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4 years ago
no-cover
July 27, 2015
Other

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...

698
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4 years ago
no-cover
July 09, 2015
Other

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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4 years ago
no-cover
June 22, 2015
Other

Playing the Weak Loonie

The Canadian dollar has fallen on hard times. The Canadian dollar tends to follow West Texas Crude so it’s not surprising to see our Loonie trading close to 80 cents US. With lower Canadian interest rates and a US rate hike all but assured the Loonie may week stay in its current range for some time. If you buy into that...

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4 years ago
no-cover
May 19, 2015
Other

Understanding How to Exit before you Enter

Option trading is rarely static. Cost / benefit metrics can change quickly causing one to rethink whether the initial assessment underpinning a trade is still in play. Often follow up strategies are required to either minimize losses on trades that miss the mark or up the ante on profitable positions. Ideally, follow up...

628
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4 years ago
no-cover
April 27, 2015
Other

Optimizing Your Covered Call Strategy

Like a good dance lesson, writing covered calls is a two-step process. You need to be comfortable holding the underlying stock and should be happy if the stock is sold at the strike price of the short call. Having comfort with the underlying stock leads to the next step; which option to sell? Is there an optimum option to sell,...

756
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4 years ago
no-cover
April 27, 2015
Other

Strategies for Income Investors seeking Yield

Income hungry investors continue to ramp up their risk appetite in order to collect extra basis points in yield. Bonds continue to defy gravity as foreign investors flock to the safety and higher yield in North American fixed income assets. Canadian bonds have turned in strong returns as witnessed by the iShares Broad Bond...

681
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4 years ago
no-cover
March 02, 2015
Other

A Eurozone Play

On January 15th, the Swiss National Bank (SNB – Switzerland’s central bank) removed its’ self-imposed restrictions on the Swiss Franc. A major shift in policy shrouded in secrecy at a time when central banks had been trying to be more transparent, which many felt would have dire consequences for the Swiss economy....

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4 years ago
no-cover
February 17, 2015
Other

Hedging Interest Rate Risk

This past week we saw some indications that longer term interest rates may actually rise. Something investors have been talking about for the past two years! It is not that interest rates will rise significantly, it is more about what impact any change in mindset will have on your portfolio. More importantly, what steps can one...

645
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5 years ago
no-cover
February 02, 2015
Other

Consumer Skepticism

A number of the big name oil companies are reporting earnings this week and many analysts think that the numbers may be worse than expected, which is to say worse than numbers that have already been revised downward. Still, this is one case where you might want to take the numbers with a grain of salt. Let’s face it, tighter...

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5 years ago