Concepts
Reduce the Risk Associated with Time Value Decay
Martin Noël
Reduce the risk associated with time value decay In this article, we will examine how to reduce the risk associated with the time value decay of options in a directional position, as well as how this affects the strategy’s payoff profile. As can be seen in the following chart, the price of shares in BCE Inc. (BCE) have...
March – Educational Events
Montréal Exchange
March 11, 2020 Webinar – Options Premium and Pricing Time : 4:30 p.m. (ET) Speaker : OIC instructor Language: English Where : Online More information here. March 12, 2020 Webinar – What are options and how can you trade them? Time : 12:00 p.m. (ET) Speaker : Martin Gendron Language: French Where : Online More...
Currency Options University — Part 7
Patrick Ceresna
Currency Hedging for US Dollar Investors For the past decade, Canadian investors of US dollar-based assets have had it good. No, they have had it great. Not only have American financial assets been the best performing assets in the major markets, but over that same period the value of the Canadian dollar has fallen...
Currency Options University — Part 6
Patrick Ceresna
Currency Hedging for Exporters In the previous post we examined the role that USX currency options can play in hedging a company’s import costs. In this instalment of Currency Options University, we will explore using Montréal Exchange USX currency options to mitigate the risk that Canadian exporters face when selling goods...
Currency Options University – Part 5
Patrick Ceresna
Currency Hedging for Importers Although USX currency options are often used by speculators interested in expressing a directional view on the USD/CAD exchange rate, they also offer an interesting opportunity for corporations that conduct business in both currencies and are interested in mitigating the exchange rate risk...
Hedging with Delta
Martin Noël
As can be seen in the following chart, the price of shares in National Bank of Canada (NA) recently peaked at $73.22, representing an increase of 21.85% in 110 days, for an annualized rate of return of 72.50%. It is unlikely that this pace of growth can be sustained over an extended period of time. In addition, there are signs...
Year-End Opportunity in Cannabis Stocks?
Patrick Ceresna
Through 2018 and into the first quarter of 2019, Canadian marijuana companies represented one of the hottest sectors in the equities market. However, since its March 19, 2019 high of $23.87, the Horizons Marijuana Life Science ETF (HMMJ) has been on a steady decline, and by November 19, 2019 it was down to $8.34, having lost...
Currency Options University – Part 4
Patrick Ceresna
Directional Trading with USX Currency Options Our focus in Part 4 of the series is to demonstrate how USX currency options can be used for directional trading through the direct purchase of a call or put option. Options offer investors a way to buy a long position with a defined risk (limited to the cost of the option), while...
Impact of the Exchange Rate on Our Investments in the United States
Martin Noël
Given our proximity to the United States and/or for purposes of geographic diversification, many investors have investments in their portfolios that are priced in U.S. dollars. As with all investments, U.S. equities carry market risk, and it is important to carefully analyze securities so as to minimize, as much as possible,...
Enhancing Equity Positions with Options
Tony Zhang
Introduction Options are typically utilized and viewed as an instrument for trading the direction of stocks and ETFs with leverage. However, they are also useful to equity investors as a way to increase the yield of a portfolio by generating income and purchase stock at a discount. Investors looking to enhance their equity...
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