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ESP For Option Traders
May 31, 2016
Bullish Outlook

ESP For Option Traders

Richard Croft

A covered call strategy carries about 50% to 70% of the risk associated with a long equity position. We accept that thesis as a rule of thumb, but how does one square that position mathematically? The simple answer is to evaluate the downside protection accorded by the premium. We receive more money and, by extension, more...

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8 years ago
Loonie Strength Not Likely To Continue
May 25, 2016
Currency Options

Loonie Strength Not Likely To Continue

Jason Ayres

There are few considerations for a strengthening U.S. Dollar which will inevitably push commodity prices lower and the Loonie along with it. Economic issues abroad remain unresolved U.S. Economy remains the “lessor of all evils” Continued divergent monetary policy foster a “race to the bottom” Possible...

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8 years ago
Playing Defence with Cash Secured Puts?
May 16, 2016
Protection

Playing Defence with Cash Secured Puts?

Richard Croft

I have a love hate relationship with Canadian financial institutions. Canadian banks are tough competition for someone in the money management business. As an investment however, they are well capitalized – more than can be said for many European banks – and pay healthy dividends, which are bumped up on a regular basis. Or...

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8 years ago
Gold Covered Straddles
May 09, 2016
Bullish Outlook

Gold Covered Straddles

Richard Croft

I talked about gold… reluctantly, back in February. I also read with interest comments from Patrick Ceresna who, also in February, penned a two-part thesis on why gold should move higher. And Patrick provided some strategies for investors to take advantage of his bull case which, I might add, have paid off handsomely. I also...

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8 years ago
Stepping Into Energy
May 03, 2016
Trading Idea

Stepping Into Energy

Richard Croft

Is the energy market becoming energized? It is a tough question laden with ambiguity. Evidenced by reams of well thought out research where slight changes in the inputs can shift the bias from bull to bear and back again. Interesting the foundation for most of the research concentrates on output. How much supply OPEC and...

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8 years ago
Evaluating Earnings Variability
May 03, 2016
Earnings

Evaluating Earnings Variability

Richard Croft

We often hear about the expected movement in a stocks’ share price based on an upcoming earnings release. Calculated as an implied trading range by reverse engineering the option pricing formula. Traders typically use some version of the Black Scholes option pricing model to calculate the theoretical fair value for a call and...

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8 years ago
Hedging Hope
May 03, 2016
Protection

Hedging Hope

Patrick Ceresna

Those that regularly follow my articles and forecasts can easily ascertain that I am a worry wart. Fortunately, or unfortunately I am always skeptical on overly optimistic views on stocks and the economy. So what am I skeptical on now? I am skeptical on the supposed turn around in the Canadian economy. Yes, things have improved...

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8 years ago
A Bombardier Covered Straddle
April 18, 2016
Stock Options

A Bombardier Covered Straddle

Richard Croft

There is little doubt that Bombardier (TSX: BBD.B, Friday’s close $1.62) is on life support. At issue is the diagnosis. Does the company follow in the footsteps of Blackberry to survive as a shadow of its former self? Or does the company collapse under a mountain of debt and litigation in much the same way as Nortel?...

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8 years ago


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