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 […]


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 […]


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 Expiration

If you have positions that are in the money, it's crucial that you monitor your account and communicate with Ally on Expiration. There are a few choices if you have positions that are expiring in the money: You can close the option position. You can leave the position open. However, if it's in the money, […]


Short Put Strategies

When selling puts with no intention of buying the stock, you want the puts you sell to expire worthless. This strategy has a limited profit potential if the stock remains above strike A at expiration, but substantial potential risk if the stock goes down. The reason some traders run this strategy is that there is […]


Short Selling Explained: An Introduction

Short selling is very different from owning stocks. It's more complex, carries more risk and requires a higher degree of responsibility on the part of the trader engaging in this practice. Before jumping in, you should understand how short selling works and what rules govern your investments, plus the potential risks and rewards involved. Knowing […]


Short Selling Explained: Risks and Rewards

What is short selling, and what’s in it for traders? Short selling flips the old adage: buy low, sell high. Anticipating that a stock’s price will drop, a short seller performs this action in reverse: first they sell high, then they buy low. The tricky part is that the short seller doesn’t actually own the […]


Short Selling Explained: Trading Strategies

How do you begin short selling as an investment strategy? A number of rules restrict which stocks may be shorted and the necessary conditions for shorting. This means you won’t always be able to short any stock you want, whenever you want. Working with an online brokerage service like Ally Invest ensures you have plenty […]

Mutual Funds

Money Market Mutual Funds: An Introduction

Money market mutual funds (usually referred to as money market funds or money funds) invest in short-term, fixed-income securities, otherwise known as money market investments. By definition, money market investments mature in less than one year. Like other mutual funds, money market funds are pooled investments that allow investors to participate in a diversified portfolio […]


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 […]

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