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Tweet Fear
Richard Croft
Last Tuesday at approximately 1:00 pm EST, a Tweet from the Associated Press (AP) Twitter account read as follows; “Breaking: Two Explosions in the White House and Barack Obama is injured.” Within a space of three minutes, US $136.5 billion of the S&P 500 index’s value was wiped out. The S&P 500 index fell...
Old Rules No Longer Apply
Richard Croft
Over the past 30 years, globalization has made the world a much smaller place. Supported by advances in technology and communications, corporations have sought markets outside their domestic borders. As a middle class takes root in emerging economies, those markets become increasingly important to the bottom line of global...
Perspective
Richard Croft
Listen to the US media and you might think your portfolio has underperformed, with US stocks making record highs with a 12.14% year to date return for the iShares S&P 500 index ETF (TMX: XSP). Note this ETF is hedged to the Canadian dollar, which added about 3 percentage points to the year-to-date return. Unfortunately,...
Follow Up on Royal Bank
Patrick Ceresna
On February 28th, 2013 we wrote a blog discussing if Royal Bank was worth investing in. To read the blog, click here: http://optionmatters.ca/blog/2013/03/01/royal-opportunity/ Our focus was to find an interesting way for investors to play Royal Bank. At that time in February, these were the facts: Royal Bank was trading at...
Option Writing Strategies Are Not Sure Bets
Richard Croft
Is there a particular option strategy that works all the time? The answer of course is no just as it is with stock picking or asset allocation metrics. Despite that many investors focus entirely on option writing strategies. The logic seems sound given the potential cash flow and the fact that most options expire worthless....
The Put Backspread Hedge
Patrick Ceresna
The Canadian market has continued to complacently forge ahead. Overall we have seen little progress higher throughout March as the international geopolitical circumstances in Cyprus and Korea have started to slowly taper investor enthusiasm. In past blogs, the current state of the implied volatility priced into index options...
The Power of Propaganda
Richard Croft
It must have been a slow week, or perhaps the news media was providing us with some much needed comic relief. When the long lines of depositors making a run on Cypriot banks never materialized, we were treated to pictures of Kim Jong Un, North Korea’s leader for life and close friend of Dennis Rodman, signing an order to put...
Makes you Wonder What’s Next?
Richard Croft
The title reflects the elephant in the room that overhangs the silent majority; is anything safe from the long arm of distressed governments? It sheds light on the veiled risks associated with unchecked governments searching for new sources of revenue! This week we witnessed the “what next” which is the Cyprus Solution....
To Hedge or Not To Hedge
Patrick Ceresna
The global stock markets have been kind to investors over the last 3 months as many international markets are up 2-10% in the first quarter alone. But not every investor can share in the celebration. When looking at the average investment portfolio for a Canadian, it has been a mixed picture. This is because the average...
Investors Fret over SNC–Lavalin
Patrick Ceresna
SNC-Lavalin has once again made headlines as scandals with the Montreal’s new megahospital remain unresolved. The news certainly has contributed to SNC-Lavalin’s recent price weakness. Investors fear that if the plot to rig the megahospital contract in SNC’s favor is true, the company would face penalties and material...
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