Stock Options
Minimizing Your Risk with Vertical Debit Spreads
Tony Zhang
What are debit spreads? Placing a trade on the direction of a stock using options typically requires purchasing a call or put option. When purchasing options, the largest headwind is erosion of the extrinsic value of an option over time. This is measured by the option’s theta. For a strategy to be profitable, one must predict...
Maximizing Technical Analysis with Options Trading
Tony Zhang
As a market strategist and practitioner of technical analysis for over a decade, I have spent my share of time studying indicators, price patterns and trading strategies. Having worked with thousands of clients on technical based strategies, I find that the most important aspect of trading is trade and risk management....
Low-Cost Insurance Against a Drop in Share Price
Martin Noël
As the following chart shows, the price of shares in Waste Connections Inc. (WCN), which is trading at $123.70 as these lines are being written on July 25, 2019, has delivered an excellent return of 28.6% since bottoming out at $96.16 on December 24, 2018. The chart shows that the stochastic oscillator (Stoch), an indicator of...
Writing Call Options to Protect a Position
Martin Noël
As the following graph shows, shares in the Bank of Montreal (BMO) has been in correction territory since falling below the 13 and 34-day moving averages. The stock’s last rally toward $101 is similar to one near the end of November 2018, just before the stock plummeted by almost 14% in the space of a few weeks. Furthermore,...
The Definitive and Practical Guide to Selling Covered Calls
Tony Zhang
Many equity investors utilize options to generate income on their portfolio. A covered call is the single most popular options strategy to add income to the existing stocks and ETFs in your portfolio. This simple option strategy only requires 100 shares of a stock or ETF and selling a call option against it to generate yield....
What do Cannabis, Nelson Peltz and Hedging Have in Common?
Jason Ayres
On March 13th, Aurora Cannabis Inc. (TSX: ACB) announced that they had appointed Nelson Peltz as a Strategic Advisor to help explore potential partnerships and advise on the company’s global expansion strategy. This is a big deal given Mr. Peltz’s business history and reputation for delivering results. For more details...
Dollarama: Context on Trading the Stock vs. Options
Patrick Ceresna
Dollarama has been a bright spot in the Canadian markets throughout the last year. During the first half of the year, the share price has been working considerably higher off its $93.27 52-week low. Recently investors were rewarded when the company released its 2nd quarter results and subsequently announced plans to buy...
Options Brief – Week of August 7th
Montréal Exchange
The Canadian marijuana market is preparing for a major development: the legalization of recreational use of cannabis. While some may think that legalization will boost the Canadian economy, others believe that marijuana stocks are simply overhyped. One of the largest Canadian marijuana stocks company, Canopy Growth...
A not so TD-ous trade
Christopher Thom
TD is an extremely well-run bank with diversification across many business lines and geographies. The share price has pulled back from its 52-week high of $71.31 set back in late February by around 8.5%. With shares hovering around the $65 mark, I want to pick up some yield or look to get long the stock at even lower prices. At...
Portfolio Diversifiers
Richard Croft
I assume that all investors understand the value of diversification. It is all about developing a long-term portfolio strategy that will deliver performance within a tolerable level of risk. Bonds are typically used as a portfolio diversifier. The fixed rate of interest delivers critical cash flow to the portfolio to offset the...
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