I have not gone over Cisco’s ([stock CSCO]) earnings (transcript of call), this is more about the last two days when I was asked about Cisco by a friend. I said that the $18 calls for August and the $16 puts for August looked good. They were very low-cost. Initially, I thought Cisco would follow the…
Intrinsic versus Extrinsic Value in Options
I have incorporated this topic into my other article, but I wanted one that focused on this topic so I can reference it as necessary for future options trades. Understanding intrinsic value and extrinsic value can help you identify profitable opportunities. Remember options are an agreement to buy or sell the underlying stock at the…
Using Covered Calls to Generate Regular Returns – The Long Version
Covered calls are a great, and in my opinion under used strategy from generating regular returns off open positions. “Capital preservation” is an old favorite among those people who want to use the stock market to grow their retirement savings to keep up with rising costs and some stable appreciation. They are some of the…
Correlation versus Causation and the Self-Fulfilling Prophecy
We have all had the class, lecture, or sermon about correlation versus causation. I still see this mistake happening all the time, as I am sure you do. We see events that happen together so often that we infer patterns. Traders and investors love patterns. We want to see them slightly before the rest so…
Local Highs and Lows and Drawing Lines
I’ll keep this one short since it’s the weekend and most are probably familiar with this stuff. I am not the biggest fan of technical analysis and charting. I prefer to look at the fundamentals and only use technical analysis for timing. I’ve softened my dislike though since starting in options. For short-term options, technicals…
