Market Beating Options: Portfolio With Biggest Weekly Gains
Our options portfolio though had the biggest turnaround rising 10% just last week! As we have said before, this is our most aggressive portfolio and returns can move sharply in either direction. That said, we think we are well positioned to finish the year strong and well ahead of the market return. However, the most important success measure in the portfolio return since inception and that is well this portfolio excels. Since inception in January 2007, the return on this portfolio is 312% versus a market loss of -25% over the same time period. No question that we take more risk in this portfolio, but we consider those risks worthwhile in light of returns like those. We took three new short positions which accounted for most of the weekly gain last week. We took these positions to take advantage of what we considered were oversold conditions from the prior week. The overall market got very pessimistic the prior week as the market indices dropped significantly. With those market declines came a sharp increase in volatility which helped push up option premiums. Higher option premiums make it more worthwhile to take short positions like the ones we took last week. All three short positions expire in November and we expect each of them to expire worthless which will leave us with 100% gains. We still believe this portfolio can make a strong run prior to the end of the year. We are 70% invested and may invest in another call option or two if we find compelling opportunities. However, we remain cautious on call options at least until the market can break through the 1100 level on the S&P.
Portfolio Details Available Online At: http://www.marketbeatingstocks.com
Sunday, November 8, 2009
Sunday, October 18, 2009
Weekly Options Trading Update
Market Beating Options: Portfolio With Biggest Gains Since Inception
The aggressive portfolio experienced a slight gain for the week as it continues a strong upward trend. That trend has propelled our performance gains to a whopping 317% just since January 2007. As we have said before, this portfolio does show a lot more volatility, but we think that risk is worth high returns like those. We just sold our call option position on the S&P Market Index to break even. We decided to sell as the market rose sharply this week. We had less than two months to expiration and grew concerned that the overall market may not continue its advance over the last two months of the year. We do not think we are in for a fall per se, just that the market may not continue to move up fast enough to warrant holding the risk on this position. We decided to sell and at least get our investment back. We have some other options that will expire in two to three months, so we will be watching those carefully to take advantage of selling opportunities. Option price volatility can increase significantly as expiration dates rapidly approach. The challenge with trading options is that investors not only have to get price direction right, but also have to get the timing correct as well otherwise options will expire worthless on expiration day. We are 60% invested and do plan to invest in another call option or two. However, the market is currently trading on the high side of what we believe is a reasonable trading range. In that light, we do not want to be too aggressive in this portfolio so we are not looking to get 100% invested right now. However, if we find a compelling buying opportunity we will invest and assume that risk.
Portfolio Details Available Online At: http://www.marketbeatingstocks.com
The aggressive portfolio experienced a slight gain for the week as it continues a strong upward trend. That trend has propelled our performance gains to a whopping 317% just since January 2007. As we have said before, this portfolio does show a lot more volatility, but we think that risk is worth high returns like those. We just sold our call option position on the S&P Market Index to break even. We decided to sell as the market rose sharply this week. We had less than two months to expiration and grew concerned that the overall market may not continue its advance over the last two months of the year. We do not think we are in for a fall per se, just that the market may not continue to move up fast enough to warrant holding the risk on this position. We decided to sell and at least get our investment back. We have some other options that will expire in two to three months, so we will be watching those carefully to take advantage of selling opportunities. Option price volatility can increase significantly as expiration dates rapidly approach. The challenge with trading options is that investors not only have to get price direction right, but also have to get the timing correct as well otherwise options will expire worthless on expiration day. We are 60% invested and do plan to invest in another call option or two. However, the market is currently trading on the high side of what we believe is a reasonable trading range. In that light, we do not want to be too aggressive in this portfolio so we are not looking to get 100% invested right now. However, if we find a compelling buying opportunity we will invest and assume that risk.
Portfolio Details Available Online At: http://www.marketbeatingstocks.com
Monday, September 7, 2009
Labor Day Options View
Market Beating Foresight: Is Sentiment Changing
The stock market lost ground last week as the S&P dropped -1.2%. The week started with declines, but did recover some of those losses by the end of the week. Economic data was mixed as the Manufacturing Indexes showed improvement along with pending home sales. Payroll data was released on Friday and those numbers too were better than expected. But the market seemed spooked by an unemployment rate that rose more than expected. We sense that market sentiment is becoming more pessimistic with traders selling good news while bad news carrys more weight than it did just a few short weeks ago. September is traditionally the worst performing month and that too may be adding to the caution. The economy is still in declining although the pace of the declines has decreased. The worst may be over, but it will take time before consumer confidence returns and that is an essential ingredient for economic growth. We expect the unemployment rate to continue rising into next year, and those job losses will dampen any recovery. All signs still suggest that the recovery will be slow and could take several years as consumers regain confidence, rebuild wealth and reduce debt loads. Over the short term we expect the market to remain very bumpy, in range bound trading. We can make money in such a market by taking gains more quickly and turning over stocks more frequently. If volatility stays low, we know our trading strategy will exploit current market conditions, allowing expansion of our performance lead over competitors, as well as the broad market index.
Options Portfolio: Whopping 254% Gain Since January 2007
Our Options Portfolio is now up a whopping 254% just since January 2007. It is returns like those that make the additional risk worth while. We expect the market to end the year slighly higher. Not a great market for buying call options, but one for selective buying. We do plan to increase our allocations in call options but will do that slowly and selectively as the market shows continued improvement.
The stock market lost ground last week as the S&P dropped -1.2%. The week started with declines, but did recover some of those losses by the end of the week. Economic data was mixed as the Manufacturing Indexes showed improvement along with pending home sales. Payroll data was released on Friday and those numbers too were better than expected. But the market seemed spooked by an unemployment rate that rose more than expected. We sense that market sentiment is becoming more pessimistic with traders selling good news while bad news carrys more weight than it did just a few short weeks ago. September is traditionally the worst performing month and that too may be adding to the caution. The economy is still in declining although the pace of the declines has decreased. The worst may be over, but it will take time before consumer confidence returns and that is an essential ingredient for economic growth. We expect the unemployment rate to continue rising into next year, and those job losses will dampen any recovery. All signs still suggest that the recovery will be slow and could take several years as consumers regain confidence, rebuild wealth and reduce debt loads. Over the short term we expect the market to remain very bumpy, in range bound trading. We can make money in such a market by taking gains more quickly and turning over stocks more frequently. If volatility stays low, we know our trading strategy will exploit current market conditions, allowing expansion of our performance lead over competitors, as well as the broad market index.
Options Portfolio: Whopping 254% Gain Since January 2007
Our Options Portfolio is now up a whopping 254% just since January 2007. It is returns like those that make the additional risk worth while. We expect the market to end the year slighly higher. Not a great market for buying call options, but one for selective buying. We do plan to increase our allocations in call options but will do that slowly and selectively as the market shows continued improvement.
Sunday, August 30, 2009
Weekly Recap - Stock Options
Market Beating Options: Looking for more Call Options
The Aggressive Portfolio (Options) had another strong week bringing the Year To Date return to 13.4%. We are not surprised at the big jump in performance. The aggressive nature of options trading can bring big moves in portfolio performance. We expect to beat the market by a large margin again this year. Options trading has been very lucrative for us. We now have an incredible 299% return since inception in January 2007. Yes there is higher risk, but we think that risk is worth returns like these. Our short spread position on the VIX continues to gain ground as the September expiration approaches. Options lose value as their expiration date approaches, which benefits short positions. All of our option positions increased in value except AgFeed Industries. AgFeed stock has come under pressure this month and that has reduced the value of our call position. The call does not expire until February 2010 so there is still time for this one to recover. As for future plans, we have cash to invest in this portfolio, and we remain optimistic regarding an overall positive trend over the next six months. In that light, we are looking for additional option buying opportunities and plan to increase allocations over the near term.
Portfolio Details Available Online At: http://www.marketbeatingstocks.com
The Aggressive Portfolio (Options) had another strong week bringing the Year To Date return to 13.4%. We are not surprised at the big jump in performance. The aggressive nature of options trading can bring big moves in portfolio performance. We expect to beat the market by a large margin again this year. Options trading has been very lucrative for us. We now have an incredible 299% return since inception in January 2007. Yes there is higher risk, but we think that risk is worth returns like these. Our short spread position on the VIX continues to gain ground as the September expiration approaches. Options lose value as their expiration date approaches, which benefits short positions. All of our option positions increased in value except AgFeed Industries. AgFeed stock has come under pressure this month and that has reduced the value of our call position. The call does not expire until February 2010 so there is still time for this one to recover. As for future plans, we have cash to invest in this portfolio, and we remain optimistic regarding an overall positive trend over the next six months. In that light, we are looking for additional option buying opportunities and plan to increase allocations over the near term.
Portfolio Details Available Online At: http://www.marketbeatingstocks.com
Sunday, August 23, 2009
Weekly Options Recap
Market Beating Foresight: Market Hits Fresh New Highs
Volatility returned as the Stock Market hits fresh new highs for 2009. For the week the broad market (S&P) ended 2.2% higher, a strong turnaround from earlier in the week. For the most part economic data was poor with jobless claims rising more than expected and housing data failing to meet consensus estimates. The stock market was able to shrug off the bad news and rise further. By the end of the week, better than expected home sales were released which helped the market realize a weekly gain. A lot more economic data is due for release next week, which we expect will confirm an economy that is slowly beginning to stabilize. Most key measures are still declining, but the pace of decline has certainly slowed. We think the worst is over, but acknowledge that the recovery will likely be weak and slow. We just do not see a quick return to the high flying days of the past few years. The de-leveraging underway amongst consumers and businesses will temper spending and economic growth. That said, we think the stock market is still an excellent place to invest. We are very optimistic that our stock selection strategy and portfolio management approach will significantly outperform the market indexes in this environment. Frankly, we would welcome a stock market with lower volatility, even if that means somewhat slower market appreciation. We know our strategy can far exceed market returns in just such an environment.
Market Beating Options: Looking for more Call Options
Our Aggressive Portfolio (Options)is up a whopping 283% just since January 2007 versus a -28% market loss (S&P) over that same period. That is truly a tremendous difference in performance in what has been the worst recessionary period since the great Depression. We continue to trade short spread positions on the Volatility Index (VIX) as that generates income for the portfolio. However, our trading of call options has had the biggest postive impact on our returns over time. At this time we are aggressively searching for more opportunities to buy call options. Our strategy is to buy six month "at the money call options" based on stocks that we find through our Momentum and Value stock screen. This has been a proven and lucrative strategy for us over time. We keep subscribers fully informed with all transactions that we make and maintain a buy list of stocks directly on our website. Many of the stocks on our buy list also trade options. Those are the options that we consider, particularly if option premiums are reasonably priced.
Portfolio Details Available Online At: http://www.marketbeatingstocks.com
Also Review Our Blog At: http://marketbeatingoptions.blogspot.com
Volatility returned as the Stock Market hits fresh new highs for 2009. For the week the broad market (S&P) ended 2.2% higher, a strong turnaround from earlier in the week. For the most part economic data was poor with jobless claims rising more than expected and housing data failing to meet consensus estimates. The stock market was able to shrug off the bad news and rise further. By the end of the week, better than expected home sales were released which helped the market realize a weekly gain. A lot more economic data is due for release next week, which we expect will confirm an economy that is slowly beginning to stabilize. Most key measures are still declining, but the pace of decline has certainly slowed. We think the worst is over, but acknowledge that the recovery will likely be weak and slow. We just do not see a quick return to the high flying days of the past few years. The de-leveraging underway amongst consumers and businesses will temper spending and economic growth. That said, we think the stock market is still an excellent place to invest. We are very optimistic that our stock selection strategy and portfolio management approach will significantly outperform the market indexes in this environment. Frankly, we would welcome a stock market with lower volatility, even if that means somewhat slower market appreciation. We know our strategy can far exceed market returns in just such an environment.
Market Beating Options: Looking for more Call Options
Our Aggressive Portfolio (Options)is up a whopping 283% just since January 2007 versus a -28% market loss (S&P) over that same period. That is truly a tremendous difference in performance in what has been the worst recessionary period since the great Depression. We continue to trade short spread positions on the Volatility Index (VIX) as that generates income for the portfolio. However, our trading of call options has had the biggest postive impact on our returns over time. At this time we are aggressively searching for more opportunities to buy call options. Our strategy is to buy six month "at the money call options" based on stocks that we find through our Momentum and Value stock screen. This has been a proven and lucrative strategy for us over time. We keep subscribers fully informed with all transactions that we make and maintain a buy list of stocks directly on our website. Many of the stocks on our buy list also trade options. Those are the options that we consider, particularly if option premiums are reasonably priced.
Portfolio Details Available Online At: http://www.marketbeatingstocks.com
Also Review Our Blog At: http://marketbeatingoptions.blogspot.com
Sunday, July 12, 2009
Weekly Options Recap
Market Beating Foresight: Summer Swoon Stokes Anxiety
The market lost ground for the fourth straight week as the summer swoon stoked more anxiety amongst investors. The market has been in the doldrums as concerns rise over the progress and outlook for an economic recovery. There was not a lot of economic news or quarterly earnings reports last week, but what was shared was not good. Oil led the market lower as concerns over declining oil demand from a faltering economy drove prices sharply down. The most recent ISM Services report showed economic contraction and jobless claims continue to rise. On a positive note, U.S. Treasury yields dropped significantly as investor demand drove prices higher which lowered yields. Smaller yields are good for Mortgage Rates as they trend closely the yield direction on longer term treasuries. To us, the market decline over the past four weeks is not all that surprising. We view recent performance as a correction and consolidation from the big run-up that started in March. The market had simply moved too far too fast and needed to catch its breath. Hopefully, four weeks of decline is all that is needed! The calendar next week will bring a heavy dose of economic data on inflation, production, retail sales, housing and jobless claims. In addition, reporting for second quarter earnings will be in full swing and will continue over the next few weeks. We believe the developments over the next few weeks have the potential to swing the market in a major way. Those developments could have a significant impact on the trend and direction that the stock market takes for the remainder of the year. We still view the stock market as reasonably priced, but caution that trading could become very volatile over the next few weeks. At the annual halfway point, the broad market is now down -2.7%. We still expect the market to finish with a positive annual return, that is as long as we avoid another market meltdown. We do have concerns that the market could test the lows hit earlier this year, but do not think that scenario is likely. We plan to stay fully invested in our stock portfolios and also plan to increase investment allocations in our options portfolio. The recent downturn in the oil industry has really pressured the stocks that we own related to that industry. We plan to carefully review these holdings over the near term and will make investment decisions based on future outlooks and price momentum.
Do we have option tips for investors? We have slightly downgraded our outlook from last week as we expect the market (S&P) to swing between a trading range of 860 and 960 over the near term. The market is currently trading near the bottom of that range and we expect that to continue over the very near term. We also expect volatility (VIX) to trade between 23 and 35 through the end of July. We think taking a short position on the SPX index with an August position might be attractive, particularly for investors that are primarily long in the stock market. Premiums on SPX put positions have risen with market fears, and now may be a good time to capture income. Overall, the economy remains fragile, and anxiety is rising that any recovery will be long and slow. The economy is not yet in recovery mode, although declines have slowed considerably. We think the current market offers attractive call buying opportunities but we favor options with at least 5 to 6 months to expiration. That extra time to expiration may be needed for the stock market to regain its footing and advance forward. We currently like the following call options PQOLW (Innophos Holdings), and newly added FQIBC (Calumet Specialty Products). Calumet is in the Oil and Gas industry and we like this option despite current industry woes. This option is already in the money and the premium remains low. We think the option offers good value If you can get in at $2.00 or less. We dropped WLTGH (Walter Energy) from our options buy list as the energy sector has come under pressure with expiration rapidly approaching. We are looking for additional option buying opportunities and plan to increase allocations over the near term.
The market lost ground for the fourth straight week as the summer swoon stoked more anxiety amongst investors. The market has been in the doldrums as concerns rise over the progress and outlook for an economic recovery. There was not a lot of economic news or quarterly earnings reports last week, but what was shared was not good. Oil led the market lower as concerns over declining oil demand from a faltering economy drove prices sharply down. The most recent ISM Services report showed economic contraction and jobless claims continue to rise. On a positive note, U.S. Treasury yields dropped significantly as investor demand drove prices higher which lowered yields. Smaller yields are good for Mortgage Rates as they trend closely the yield direction on longer term treasuries. To us, the market decline over the past four weeks is not all that surprising. We view recent performance as a correction and consolidation from the big run-up that started in March. The market had simply moved too far too fast and needed to catch its breath. Hopefully, four weeks of decline is all that is needed! The calendar next week will bring a heavy dose of economic data on inflation, production, retail sales, housing and jobless claims. In addition, reporting for second quarter earnings will be in full swing and will continue over the next few weeks. We believe the developments over the next few weeks have the potential to swing the market in a major way. Those developments could have a significant impact on the trend and direction that the stock market takes for the remainder of the year. We still view the stock market as reasonably priced, but caution that trading could become very volatile over the next few weeks. At the annual halfway point, the broad market is now down -2.7%. We still expect the market to finish with a positive annual return, that is as long as we avoid another market meltdown. We do have concerns that the market could test the lows hit earlier this year, but do not think that scenario is likely. We plan to stay fully invested in our stock portfolios and also plan to increase investment allocations in our options portfolio. The recent downturn in the oil industry has really pressured the stocks that we own related to that industry. We plan to carefully review these holdings over the near term and will make investment decisions based on future outlooks and price momentum.
Do we have option tips for investors? We have slightly downgraded our outlook from last week as we expect the market (S&P) to swing between a trading range of 860 and 960 over the near term. The market is currently trading near the bottom of that range and we expect that to continue over the very near term. We also expect volatility (VIX) to trade between 23 and 35 through the end of July. We think taking a short position on the SPX index with an August position might be attractive, particularly for investors that are primarily long in the stock market. Premiums on SPX put positions have risen with market fears, and now may be a good time to capture income. Overall, the economy remains fragile, and anxiety is rising that any recovery will be long and slow. The economy is not yet in recovery mode, although declines have slowed considerably. We think the current market offers attractive call buying opportunities but we favor options with at least 5 to 6 months to expiration. That extra time to expiration may be needed for the stock market to regain its footing and advance forward. We currently like the following call options PQOLW (Innophos Holdings), and newly added FQIBC (Calumet Specialty Products). Calumet is in the Oil and Gas industry and we like this option despite current industry woes. This option is already in the money and the premium remains low. We think the option offers good value If you can get in at $2.00 or less. We dropped WLTGH (Walter Energy) from our options buy list as the energy sector has come under pressure with expiration rapidly approaching. We are looking for additional option buying opportunities and plan to increase allocations over the near term.
Sunday, July 5, 2009
Weekly Options Market Recap
Market Beating Foresight: Rocky Week Dampens Enthusiasm
The market started last week sharply lower, then recovered in the middle of the week only to drop 3% on Thursday. It was certainly an up and down week as investors searched for market direction and a near term trend. The weekly news was more negative than positive and the lighter trading volumes due to the holiday week combined to make for a rocky trading. The biggest news was jobs data and consumer confidence, both of which came in with a negative bias. Job losses continue to mount and results have been worse than expected. But frankly this remains no big surprise to us as we expect job losses and unemployment to rise through the rest of this year. Even if we hit an economic bottom in the fourth quarter, it will take time before businesses to show an interest and willingness to expand payrolls. Unemployment may not improve until well into 2010! Investors were also startled at greater than expected declines in June consumer confidence. Consumers will likely continue to hoard cash and reduce spending which will restrict growth in demand for goods and services. Furthermore, oil prices fell over 4% last week in large part due to falling expectations of global demand due to weakening economic conditions. That negative bias, along with lower trading volumes, made for a rocky week of trading. In the end the bears won and the market ended with another weekly loss. As we have said before the economy is not good, and its recovery will likely be slow and weak. Quarter two earnings releases will begin in full force through the month of July and that will have the potential to move the market in a big way. We plan to closely monitor those earnings releases over the coming month. The market could be in for a major bump if companies fail to meet earnings expectations or if their future outlooks deteriorate. However, we still view the stock market as reasonably priced at the 900 level (S&P) and we plan to buy stocks and options long when we can at those levels. Volatility has been trending down, but could spike once again if investors get spooked with earnings news. At the 2009 halfway point, we are fully invested in our stock portfolios, but do plan to increase investment allocations in our options portfolio. In addition, over the near term we plan to prune laggards from our stock portfolios and replace with stocks that show stronger investor demand. We fully expect our portfolios to outperform the market for the remainder of the year.
Option Tips For Investors
Our outlook remains unchanged from last week as we expect the market (S&P) to swing between a trading range of 880 and 980 over the near term. We also expect volatility (VIX) to trade between 23 and 35 through the end of July. We think taking a short position on the SPX index with a July or August position might be attractive, particularly for investors that are primarily long in the stock market. With long positions, if the market moves up strong, investors lose on the short position but gain on their overall portfolio. However, if the market maintains a narrow trading range, investors can collect the income from the short at relatively low risk. However, risk is high particularly with naked positions, as those investments not offset by long positions theoretically offer unlimited loss. Overall, the economy remains fragile, but there appears to be a growing sense that the worst is over. The economy is not yet in recovery mode, but declines have slowed considerably. We think the current market does offer attractive call buying opportunities but we favor options with 5 to 6 months to expiration. That extra time to expiration may be needed for the stock market to regain its footing and advance forward. We currently like the following call options PQOLW (Innophos Holdings), and newly added WLTGH (Walter Energy). We dropped QYKLD (Chart Industries) from our options buy list as the premium on this one has gotten too expensive after the recent declines in the underlying stock price. We are looking for additional option buying opportunities and plan to increase allocations over the near term.
Portfolio Details Available Online At: http://www.marketbeatingstocks.com
The market started last week sharply lower, then recovered in the middle of the week only to drop 3% on Thursday. It was certainly an up and down week as investors searched for market direction and a near term trend. The weekly news was more negative than positive and the lighter trading volumes due to the holiday week combined to make for a rocky trading. The biggest news was jobs data and consumer confidence, both of which came in with a negative bias. Job losses continue to mount and results have been worse than expected. But frankly this remains no big surprise to us as we expect job losses and unemployment to rise through the rest of this year. Even if we hit an economic bottom in the fourth quarter, it will take time before businesses to show an interest and willingness to expand payrolls. Unemployment may not improve until well into 2010! Investors were also startled at greater than expected declines in June consumer confidence. Consumers will likely continue to hoard cash and reduce spending which will restrict growth in demand for goods and services. Furthermore, oil prices fell over 4% last week in large part due to falling expectations of global demand due to weakening economic conditions. That negative bias, along with lower trading volumes, made for a rocky week of trading. In the end the bears won and the market ended with another weekly loss. As we have said before the economy is not good, and its recovery will likely be slow and weak. Quarter two earnings releases will begin in full force through the month of July and that will have the potential to move the market in a big way. We plan to closely monitor those earnings releases over the coming month. The market could be in for a major bump if companies fail to meet earnings expectations or if their future outlooks deteriorate. However, we still view the stock market as reasonably priced at the 900 level (S&P) and we plan to buy stocks and options long when we can at those levels. Volatility has been trending down, but could spike once again if investors get spooked with earnings news. At the 2009 halfway point, we are fully invested in our stock portfolios, but do plan to increase investment allocations in our options portfolio. In addition, over the near term we plan to prune laggards from our stock portfolios and replace with stocks that show stronger investor demand. We fully expect our portfolios to outperform the market for the remainder of the year.
Option Tips For Investors
Our outlook remains unchanged from last week as we expect the market (S&P) to swing between a trading range of 880 and 980 over the near term. We also expect volatility (VIX) to trade between 23 and 35 through the end of July. We think taking a short position on the SPX index with a July or August position might be attractive, particularly for investors that are primarily long in the stock market. With long positions, if the market moves up strong, investors lose on the short position but gain on their overall portfolio. However, if the market maintains a narrow trading range, investors can collect the income from the short at relatively low risk. However, risk is high particularly with naked positions, as those investments not offset by long positions theoretically offer unlimited loss. Overall, the economy remains fragile, but there appears to be a growing sense that the worst is over. The economy is not yet in recovery mode, but declines have slowed considerably. We think the current market does offer attractive call buying opportunities but we favor options with 5 to 6 months to expiration. That extra time to expiration may be needed for the stock market to regain its footing and advance forward. We currently like the following call options PQOLW (Innophos Holdings), and newly added WLTGH (Walter Energy). We dropped QYKLD (Chart Industries) from our options buy list as the premium on this one has gotten too expensive after the recent declines in the underlying stock price. We are looking for additional option buying opportunities and plan to increase allocations over the near term.
Portfolio Details Available Online At: http://www.marketbeatingstocks.com
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