Key Takeaways Selling covered calls is a neutral to bullish strategy that involves selling calls, collecting premium, and rolling the options out  Covered calls can be used to generate income and offset a portion of the loss should the stock’s price drop The choice of strike price plays a major role in the covered call strategy […]

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Key Takeaways A swing trade may last days or weeks Some swing-trading strategies offer more than one price target Learn how to structure a combination trade to pursue multiple price targets when swing-trading stocks The objective of a swing trade is typically to capture returns within several days. Swing traders usually know their entry and […]

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Key Takeaways Tracking the risk/reward profile can help you weigh the odds When deciding whether to stick with a trade, ask if you’d initiate the trade as of that point Capital allocation has a mental component as well as a financial one  If you’re like many traders, when you buy a stock, you set your […]

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Key Takeaways Apple (AAPL) announced a 4-for-1 stock split, effective August 31, 2020 When companies split shares, valuations and obligations are designed to remain intact So you traded stocks awhile, got comfortable with the ebb and flow, and decided to add options to your lineup. You did the tutorials, read the articles, watched the webinars […]

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Key Takeaways Picking good stocks to trade requires an information-driven strategy and an understanding of what moves markets Liquidity and bid/ask spreads are critical considerations in choosing stocks to trade High-volatility stocks can present more opportunities for traders but also greater risk The daily stock market dance offers an abundance of potential partners. Prudent traders […]

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Key Takeaways American-style options can be exercised at any time before expiration Addressing dividend risk involves comparing the amount of a dividend against an options position’s extrinsic (time) value People who trade options do so for a number of reasons: to target downside protection, to potentially enhance income from stocks they own, or to seek […]

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Key Takeaways Relative to other options risks such as delta and theta, changes in interest rates (rho) tend to be less dynamic, so they may get less attention In general, an increase in interest rates will drive up call premiums and cause put premiums to decrease Interest rates affect exercise decisions for American-style options  If […]

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Now that you have your trade on, what’s next? Start sweating? Log in and stare at the screen for hours at a time? Let’s hope not. Rather, consider these ideas for navigating the time between the entry and exit of a trade. Don’t Let it Consume You One common question is “How often should I […]

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Editor’s note: The “On/Off Ramp” is a four-part guide to trade entry, exit, and what happens in between. Part 1 introduced the series and looked at the trade entry process, and Part 2 was about how to navigate the holding period.    The amount of time a position remains in your portfolio depends upon your […]

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