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...
For almost 20 years, our team at CIBC Private Wealth has used defensive option strategies including Covered Calls, Selling Covered Puts and Collars to manage client portfolios. Our objective is to generate income from option premium in addition to dividends paid on stocks. Our primary focus is on wealth preservation. A Covered...
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,...
On July 27, 2007, the Montréal Exchange launched a penny trading pilot project that ended on February 26, 2016 with the implementation of a permanent program. Before the pilot project began, only options priced below $0.10 were allowed to trade with a minimum price increment of $0.01 (“penny trading”), while all other...
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...
Part 3: Specifications of USX Options To summarize, in Part 1 we reviewed the macro drivers that influence a currency’s value, and in Part 2 we focused on the impact of those changes in the currency’s value on investors. The focus in Part 3 will be on understanding the specifications of Canadian USX options and how to size...
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....
Part 2: Impact of U.S. Dollar Fluctuation on Canadian Returns I had the opportunity, early in my career, to work at a full-service brokerage at a Tier 1 Canadian bank. I remember back in the day overhearing an investment advisor having an argument with a client about the client’s performance. The client was questioning the...
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