Strategy

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...

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3 months ago
Secret to Consistent Income with Options
March 19, 2018
Concepts

Secret to Consistent Income with Options

Tony Zhang

The success to trading any strategy on stocks or options is consistency. This is true for both researching the underlying stock or ETF, and choosing the right trading strategy. Having a consistent approach such as technical or fundamental analysis leads to reliable research that doesn’t conflict. The same applies to...

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2 years ago
Understanding Credit Spreads and How They Differ from Debit Spreads
March 16, 2018
Concepts

Understanding Credit Spreads and How They Differ from Debit Spreads

Alan Grigoletto

In a previous posting, “Bull Call and Bear Put Spreads, Pairing Option Strategies with Forecasts” we learned how to implement a debit spread for both calls and puts. This week we will examine another form of vertical spreads: credit spreads and how they can be used. Recall that debit spreads are a limited risk transaction,...

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2 years ago
Dollarama: Context on Trading the Stock vs. Options
October 06, 2017
Bullish Outlook

Dollarama: Context on Trading the Stock vs. Options

Patrick Ceresna

Dollarama has been a bright spot in the Canadian markets throughout the last year.  During the first half of the year, the share price has been working considerably higher off its $93.27 52-week low.  Recently investors were rewarded when the company released its 2nd quarter results and subsequently announced plans to buy...

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2 years ago