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no-cover
January 21, 2013
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Timing A Straddle

Richard Croft

Last week I talked about the outlook for the markets in 2013. Specifically that we will likely see long periods trading within an ever narrowing channel punctuated by short bursts of volatility where markets move sharply before settling in a new trading range. Mind you that is typical market maneuvering in most years although I...

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no-cover
January 14, 2013
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Cream and Sugar Please!

Richard Croft

Back in February 2012 I talked about a covered call on Tim Hortons Inc. (TSX: THI, Friday’s close $48.65). I don’t talk a lot about this company because THI options are not that liquid so when positions are established you will likely have to maintain the position through expiry. In fact that is exactly what happened...

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8 years ago
no-cover
January 07, 2013
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Investment Strategies for a Dysfunctional Government

Richard Croft

There is an old saw on Wall Street known as the January barometer. The theory being that a strong stock market in January portends a rising market for the year. But like most theories actual results are hardly definitive! What we do know is that equity markets throughout 2013 will be influenced by government actions or lack...

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8 years ago
no-cover
December 17, 2012
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Long-Term Options versus Margin

Richard Croft

Long-term options (or Long Term-Equity AnticiPations or LEAPs as they are known within the industry) are interesting for more than the fact that they provide a demonstrative example of the option industry’s love affair with acronyms. LEAPs are long-term options with expirations that stretch beyond the nine month time line...

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8 years ago
no-cover
December 10, 2012
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A Refresher on Calendar Spreads – Just in time!

Richard Croft

Calendar spreads offer an interesting way to play fourth quarter earnings that will heat up in February. It will look even more attractive in February should the US come to some resolution on the fiscal cliff that keeps volatility low. The calendar spread involves the purchase of a longer term option – either calls or...

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8 years ago
no-cover
December 03, 2012
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Volatility Skews

Richard Croft

By the third week in November, US volatility futures were trading in backwardation. That is longer term volatility futures expiring in January and February were trading at lower values than the cash market. For traders who look to volatility as a way to gauge investor sentiment, that volatility skew can enhance one’s...

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8 years ago
no-cover
November 26, 2012
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The Portfolio Approach

Richard Croft

Avoiding the madness of crowds Usually in this space I discuss specifics related to an option strategy one might use based on a view of the underlying stock, or provide an educational gem related to option pricing, strategy or mechanics. This week I want to step back and address a broader issue related to portfolio building....

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8 years ago
no-cover
November 19, 2012
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Never Say Never!

Richard Croft

In October 2010 I penned the following comments: there has “never” been a market anywhere anytime that didn’t revel in the prospect of easy money! Which is to say: one should never fight the Fed. At that time, most of the industrialized world was engaging in massive stimulus programs designed to keep economies from...

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