Trading

Long Inverse ETF Strategies

The concept behind inverse exchange-traded funds or ETFs seems quite simple. When the underlying target index goes down, the value of the ETF is designed to go up. The target index may be broad-based, like the Standard & Poor’s 500 index, or it could be a basket chosen to follow a specific area of the […]

Trading

Basics of ETFs

Like a mutual fund, an exchange-traded fund (ETF) pools the money of many investors and purchases a group of securities. Like index mutual funds, most ETFs are passively managed. Instead of having a portfolio manager who uses his or her judgment to select specific stocks, bonds, or other securities to buy and sell, both index […]

Options

Long Put Strategy

A long put gives you the right to sell the underlying stock at strike price A. If there were no such thing as puts, the only way to benefit from a downward movement in the market would be to short sell stocks . The problem with shorting stock is you’re exposed to theoretically unlimited risk […]

Options

Short Call Strategies

Also known as a naked call, selling the short call obligates you to sell stock at strike price A if the option is assigned. When running this strategy, you want the call you sell to expire worthless. That’s why most investors sell out-of-the-money options. This strategy has a low profit potential if the stock remains […]

Mutual Funds

Mutual Fund Investment Types

Just about every fund available will fall into one of four categories: Open-end, Exchange-traded, UIT or Closed-end. To help you make heads or tails of these fund types, the table below outlines general definitions, pros and cons, liquidity concerns and other important information to help you make wiser decisions about your finances. Before investing in […]

Mutual Funds

Comparing Mutual Funds

When someone mentions investing in a fund, most people immediately think of mutual funds. The question people don’t ask is this: What type of mutual fund are you investing in? There are actually three common types: funds that invest in stocks and/or equities, funds that invest in bonds and fixed-income products, and funds that invest […]

Options

Understanding Cash-Secured Puts

If you keep enough cash on hand, not only are you prepared in the event of an assignment, but you’ve tapped into a method to buy stock that may also earn you a little extra income along the way. Let’s explain with an example. Imagine you like stock XYZ at $52, but you’re not looking […]

Trading

Market Outlook: A Trader’s Guide

Different ways to develop an opinion on the market In the world of Wall Street, there is no shortage of colorful language used to describe one’s outlook on the markets. When using the key terms to describe your market sentiment (bullish, bearish, neutral or volatile), Ally Invest is speaking from the perspective of the U.S. […]

Mutual Funds

Selecting Mutual Funds

Before you pony up cash for an investment, first dedicate time for doing some homework. Outlined below are several key questions to consider before investing in a particular mutual fund. You can find these answers in a fund’s prospectus.   Check the Prospectus Before investing in any mutual fund, carefully consider information contained in the […]

Options

Selling Cash-Secured Puts for Income

As an option trading strategy, selling naked or short puts is highly risky and only recommended for experienced investors. There are differences between selling a cash-secured puts and selling a naked put. In either case, Ally Invest encourages you to stay mindful of the risks. What is a naked put? If you short a put, […]