Trading Idea

Enhancing Equity Positions with Options
September 12, 2019
Concepts

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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1 month ago
Covered Calls: Managing Risk Exposure and Generating Value During Volatile Times
September 06, 2019
Bearish Outlook

Covered Calls: Managing Risk Exposure and Generating Value During Volatile Times

Antonio Cabeda

Key facts on covered calls This strategy consists of writing a call that is covered by an equivalent long stock position. It represents a simple way for investors to manage their short-term risk exposure, allowing them to earn premium income (i.e. the money received from writing the calls) in return for part of the stock’s...

370
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2
2 months ago
Generating Income with Credit Vertical Spreads
August 29, 2019
Bearish Outlook

Generating Income with Credit Vertical Spreads

Tony Zhang

Credit spreads are a popular strategy that is used to generate income with limited risk from a modest bullish, bearish or even neutral view on a stock or ETF. Many investors are attracted to writing higher delta options because of the higher premiums, but it is important to understand the tradeoff, which is that this will risk...

389
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2 months ago
Profiting From Expectations of Relative Stability
August 20, 2019
Concepts

Profiting From Expectations of Relative Stability

Martin Noël

Shares in Cogeco Communications Inc. (CCA) were trading at $104.36 at this writing on August 9, 2019, but as the following graph shows, they jumped on July 10 when the company released its latest financial results. After topping out at $107.05 on July 16, prices moved in a relatively narrow corridor of $103.33 to $107.35....

433
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1
2 months ago
Minimizing Your Risk with Vertical Debit Spreads
August 14, 2019
Bearish Outlook

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...

514
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2 months ago
Top 3 Strategies to Generate Income with Options
July 04, 2019
Revenue

Top 3 Strategies to Generate Income with Options

Tony Zhang

Options can be used to provide an additional income stream for just about any portfolio. Whether you are interested in acquiring an equity position, already own equities, or simply do not wish to own any equities, there are option strategies that are suitable to generate income. In this post, we will explore the top 3 income...

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4 months ago
Currency Options University – Part 1
June 20, 2019
Concepts

Currency Options University – Part 1

Patrick Ceresna

Part 1: Welcome to the world of currencies It is very common for Canadian investors to invest in American stocks. Yet, it is surprising how few retail investors understand the impact currency fluctuations have on their returns. More often than not, investors look at the price fluctuation of an asset price assuming a constant...

704
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4 months ago
Profit from an Increase in Canadian Building Permits
June 05, 2019
Concepts

Profit from an Increase in Canadian Building Permits

Martin Noël

In this article, we analyze changes in Canadian building permits in relation to fluctuations in the price of Richelieu Hardware Ltd. (symbol: RCH) for the period from January 2014 to May 2019. RCH is an importer, distributor and manufacturer of specialty hardware and complementary products. The company’s main source of...

434
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5 months ago
Writing Put Options on a Support Level
May 16, 2019
Concepts

Writing Put Options on a Support Level

Martin Noël

As the following chart shows, the price of shares in George Weston Limited (WN) is down slightly from its recent high of $102.30, and it could stabilize at a support level of around $98.00. This is close to the current level of its 34-day moving average (on April 29, 2019). Furthermore, we can see that the stock’s RSI 5...

679
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5 months ago
Renting the Upside of the Canadian Markets
April 12, 2019
Bullish Outlook

Renting the Upside of the Canadian Markets

Patrick Ceresna

The uncertainty for Canadian investors has everything to do with the confusing crosscurrents of a rising stock market but simultaneously a weakening Canadian economy. The outlook for the weakening economy comes right from the top, where the Bank of Canada came out with its rate statement on March 6. The BoC took a dovish...

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6 months ago