Options

Protective Put Strategies

About the Security Options are contracts which control underlying assets, oftentimes stock. It is possible to buy (own or long) or sell (write or short) an option to initiate a position. Options are traded through a broker like Ally Invest, who charges a commission when buying or selling option contracts. Before trading options carefully consider […]

Options

Buying Puts vs. Short-Selling

If you're bearish on a stock, you can try to capitalize on this view in a few ways: Sell the stock, if you own it. Sell the stock, even if you don't own it, by borrowing shares via your brokerage firm. Then, at a later date, buy the shares (hopefully at a lower price) to […]

Options

Put Options Explained

It's strange but true: many investors who are perfectly comfortable trading call options get a little squeamish around put options. Puts are certainly nothing to be afraid of. When used properly, they can add a whole new dimension to your trading. What are puts, exactly? Put options are basically the reverse of calls: a call […]

Options

What is Implied Volatility?

Implied volatility (IV) is one of the most important concepts for options traders to understand for two reasons. First, it shows how volatile the market might be in the future. Second, implied volatility can help you calculate probability. This is a critical component of options trading which may be helpful when trying to determine the […]

Options

Collar Strategies

You can think of a collar as simultaneously running a protective put and a covered call. Some investors think this is a sexy trade because the covered call helps to pay for the protective put. So you've limited the downside on the stock for less than it would cost to buy a put alone, but […]

Stocks

Long Common Stock on Margin

The Strategy This strategy is similar to long common stock , but on steroids. That’s because when buying stock on margin you normally put up only half of the money to purchase the stock and borrow the other half from your broker. Although the benefit of trading on margin is a boost to your available […]

Options

Covered Call Strategies

Some investors will run this strategy after they’ve already seen nice gains on the stock. Often, they will sell out-of-the-money calls, so if the stock price goes up, they’re willing to part with the stock and take the profit. Covered calls can also be used to achieve income on the stock above and beyond any […]

Mutual Funds

Investing in Growth Mutual Funds

Growth mutual funds, as the name implies, invest in growth stocks. A growth stock is typically a younger, burgeoning company with earnings or revenue that’s growing faster than the average firm. Instead of paying out dividends to investors, growth firms usually choose to reinvest their earnings to support rapidly expanding operations or develop new products […]

Stocks

Stock Basics: An Investor’s Guide

Everybody knows the old maxim buy low, sell high, and we all hear rumors around the water cooler about stocks that are poised to take off. Some people think that's all you need to know to make a killing in the stock market. Those people are wrong. Before you begin to invest in stocks or […]

Stocks

Fundamental Analytics Explained: Balance Sheets

Reading a balance sheet: Assets Balance sheets provide a snapshot of how the company's assets (the value a company takes in) are balanced out against its liabilities (what the company must pay out). When assets equal liabilities plus equity, that's when the statement is said to be in balance. Assets include company resources that are […]