Trading Idea

Long Straddle with Cineplex
September 11, 2020
Trading Idea

Long Straddle with Cineplex

Patrick Ceresna

Before the corona crisis hit, Cineplex was scheduled to be taken over by UK-based Cineworld Group in a $1.65 billion transaction. Cineworld was going to pay $34 per Cineplex share. However, the closing of the Canadian economy due to the coronavirus crisis led Cineworld to claim that there had been a material adverse change...

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2 weeks ago
What the Options Market Thinks About Earnings
September 09, 2020
Technical analysis

What the Options Market Thinks About Earnings

Steve Sosnick

Use Your Interactive Brokers Trader Workstation to See What the Options Market Thinks About Earnings Expectations During earnings season, investors become justifiably concerned with analysts’ expectations for a company’s earnings and revenues. While analysts’ estimates provide an important framework for decision-making...

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2 weeks ago
Stock Repair Strategy Using Options
July 30, 2020
Bearish Outlook

Stock Repair Strategy Using Options

Patrick Ceresna

The coronavirus crisis seemed to come out of nowhere. It caught retail and professional investors off guard equally. Almost overnight many stocks fell by more than 25%, and although some have managed to recoup their losses over the past few months, many have not. What is an investor to do in such an environment? One could...

599
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2 months ago
Harvesting Premium By Shorting Out-of-the-money Calls
July 30, 2020
Bearish Outlook

Harvesting Premium By Shorting Out-of-the-money Calls

Patrick Ceresna

Have you ever been in the fortunate position of holding a stock that had rallied a long way, but you were concerned it had gone too far too fast, yet you did not want to sell your position? Or, have you ever thought that the market would go sideways for a while, and you did not expect your stocks to rally? Maybe you have seen...

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2 months ago
A Twist on Risk Reversals
July 10, 2020
Bullish Outlook

A Twist on Risk Reversals

Patrick Ceresna

The past few months have been challenging for investors. During the first month of the coronavirus crisis, the stock market fell from record highs with unprecedented speed. Meanwhile, the subsequent rally has been just as befuddling to many. Canada’s most liquid stock index ETF, the XIU, plunged from $27 to $17 (a loss of...

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3 months ago
Butterfly on Shopify
June 10, 2020
Concepts

Butterfly on Shopify

Patrick Ceresna

Recently the Royal Bank of Canada lost its title as our country’s most valuable company in terms of market capitalization. For two brief weeks, Shopify sat at the top of the heap.   Chart 1: Royal Bank vs. Shopify May 31, 2020 Source: Bloomberg   SHOP’s run has been a sight to behold.   Chart 2: Shopify...

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4 months ago
Profiting from the second-wave downturn
April 30, 2020
Bearish Outlook

Profiting from the second-wave downturn

Martin Noël

In a bear market, the lows of the first market downturn are often retested following a rally like the one we have just seen. This article examines how put options can be used to maximize the return on a bearish projection. As can be seen in the following chart, the unit price of the iShares S&P/TSX Capped Financials Index...

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5 months ago
Put-Writing Strategies in the Canadian Market
April 13, 2020
Bullish Outlook

Put-Writing Strategies in the Canadian Market

Patrick Ceresna

The coronavirus crisis has caused massive sell-offs in global equity markets throughout the world.  Canada has not been immune, and our benchmark large-cap S&P TSX 60 Index has lost over 36% from its February high.   CHART 1 – S&P/TSX60 Source: Bloomberg   A move of this magnitude from new highs to a...

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6 months ago
Making the most of volatility in these uncertain times
March 26, 2020
Bearish Outlook

Making the most of volatility in these uncertain times

Martin Noël

In our last article we discussed how to reduce the risk associated with the time-value decay of options in a directional position. Now we will take advantage of the market meltdown to discuss the implied volatility in the price of an option, how it reflects the degree of market uncertainty over future price movements in the...

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6 months ago
Reduce the Risk Associated with Time Value Decay
March 02, 2020
Bearish Outlook

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...

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7 months ago
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