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Articles on this Page
- 12/05/16--07:00: _Comparing Calendar ...
- 12/18/16--21:10: _How to Make 40% a Y...
- 01/02/17--19:54: _How to Make 30% on ...
- 01/20/17--12:58: _Another Interesting...
- 02/19/17--17:17: _Using Investors Bus...
- 03/01/17--17:51: _How to Make 50% in ...
- 03/05/17--13:39: _How to Make 27% in ...
- 03/12/17--19:25: _How to Make 40% in ...
- 03/20/17--19:37: _What Can Be Learned...
- 04/03/17--19:46: _44% in 46 Days From...
- 04/17/17--07:18: _40% Possible in 2 W...
- 05/01/17--19:47: _Interesting Earning...
- 06/05/17--09:28: _Actual Positions in...
- 06/12/17--11:31: _Will Nvdia (NVDA) C...
- 06/21/17--08:18: _Is Alibaba (BABA) R...
- 06/26/17--18:39: _Lumentum Holdings (...
- 06/28/17--08:32: _Merck Breaks Out, c...
- 07/03/17--06:07: _Align Technology (A...
- 07/09/17--20:50: _Consider NutriSyste...
- 07/18/17--13:41: _Is Taiwan Semicondu...
- 12/05/16--07:00: Comparing Calendar and Diagonal Spreads in an Earnings Play
- 01/20/17--12:58: Another Interesting Short-Term Play on Aetna (AET)
- 02/19/17--17:17: Using Investors Business Daily to Create an Options Strategy
- 03/01/17--17:51: How to Make 50% in 5 Months With Options on Celgene
- 03/05/17--13:39: How to Make 27% in 45 Days With a Bet on Tesla
- 03/12/17--19:25: How to Make 40% in 45 Days With a Bet on Ford
- 03/20/17--19:37: What Can Be Learned From Successful Option Strategies
- 04/03/17--19:46: 44% in 46 Days From a Play on ULTA?
- 04/17/17--07:18: 40% Possible in 2 Weeks With an Iron Condor?
- 05/01/17--19:47: Interesting Earnings Play on Facebook
- 06/05/17--09:28: Actual Positions in One Terry’s Tips Portfolio
- 06/12/17--11:31: Will Nvdia (NVDA) Continue Its Upward Momentum?
- 06/21/17--08:18: Is Alibaba (BABA) Ready to Accelerate Higher?
- 06/26/17--18:39: Lumentum Holdings (LITE) Is Coiling For An Up Move
- 06/28/17--08:32: Merck Breaks Out, can it Continue to Trade Higher?
- 07/03/17--06:07: Align Technology (ALGN) A Buy After Being Added To The S&P 500
- 07/09/17--20:50: Consider NutriSystem (NTRI) After The Price Correction
- 07/18/17--13:41: Is Taiwan Semiconductor (TSM) Ready To Resume Higher?
Last week, in one of our Terry’s Tips portfolios, we placed calendar spreads with strikes about $5 above and below the stock price of ULTA which announced earnings after the close on Thursday. We closed out our spreads on Friday and celebrated a gain of 86% after commissions for the 4-day investment. It was a happy day.
This week, this portfolio will be making a similar investment in Broadcom (AVGO) which announces earnings on Thursday, December 8. I would like to tell you a little about these spreads and also answer the question of whether calendar or diagonal spreads might be better investments.
Comparing Calendar and Diagonal Spreads in an Earnings Play
Using last Friday’s closing option prices, below are the risk profile graphs for Broadcom (AVGO) for options that will expire Friday, December 9, the day after earnings are announced. Implied volatility for the 9Dec16 series is 68 compared to 35 for the 13Jan17 series (we selected the 13Jan17 series because IV was 3 less than it was for the 20Jan17 series). The graphs assume that IV for the 13Jan17 series will fall from 35 to 30 after the announcement. We believe that this is a reasonable expectation.
This is the time of the year when everyone is looking ahead to the New Year. The preponderance of economists and analysts who have published their thoughts about 2017 seem to believe that Trump’s first year in the oval office will be good for the economy and the market, but not great.
Today I would like to share an option trade I have made in my personal account which will earn me a 40% profit next year if these folks are correct in their prognostications.
Today, we set up a new portfolio at Terry's Tips that I would like to tell you about. It is our most conservative of 9 portfolios. It consists of selecting 5 blue-chip companies which pay a dividend between 2% and 3.6% and which appear on at least two top analysts’ “top 10” lists for 2017. This portfolio is designed to gain 30% for the year, and we can know in advance exactly what each of the 5 spreads will make in advance. For most of these companies, they can fall by 10% over the course of the year and we will still make our 30% gain.
We are also repeating our best-ever offer to come on board before January 11 rolls around.
How to Make 30% on 5 Blue-Chip Companies in 2017 Even if They Fall by 10%
The spreads we are talking about are vertical put credit spreads. Once you have found a company you like, you select a strike price which
Ten days ago, I sent you a note showing how you could make 23% on an options spread on Aetna (AET) if the stock closed at any price above $118 today. Back then, it was trading at $122.67. The day is not yet over right now, but AET is trading at $122 with an hour to go until closing, so it seems safe to say that the 23% will be enjoyed by everyone who placed the trade.
Today, I would like to suggest another trade on AET that will end two weeks from today. It will make 40% on . . .
Today I would like to share an idea that we are using in one of our Terry's Tips’ portfolios. We started this portfolio on January 4, 2017, and in its first six weeks, the portfolio has gained 30% after commissions. That works out to about 250% for the whole year if we can maintain that average gain (we probably can’t keep it up, but it sure is a good start, and a positive endorsement for the basic idea).
Using Investors Business Daily to Create an Options Strategy
IBD publishes a list which it calls its Top 50. It consists of companies which have a positive momentum. Our idea is to check this list for companies that we particularly like for fundamental reasons besides the momentum factor. Once we have picked a few favorites, we make a bet using options that will make a nice gain if the stock stays at least flat for the next 45 – 60 days. In most cases, the stock can actually fall a little bit and we will still make our maximum gain.
The first 4 companies we selected from IBD’s Top50 list were . . .
One of my favorite option plays is to pick a company I like (or one that several people I respect like) and place a bet that it will at least stay flat for the next few months. Actually, most of the time, I can find a spread that will make a great gain even if the stock falls by a few dollars while I hold the spread.
Today, I would like to share an investment we placed in a Terry's Tips portfolio just yesterday. By the way, this portfolio has similar spreads in four other companies we like, and it has gained over 20% in the first two months of 2017. We have already closed out two spreads early and reinvested the cash in new plays. The portfolio is on target to make over 100% for the year (and it is available for Auto-Trade at thinkorswim for anyone not interested in placing the trades themselves).
How to Make 50% in 5 Months With Options on Celgene
Not only is CELG on many analysts’ “Top Picks for 2017” list, but several recent Seeking Alpha contributors have extolled the company’s business and future. One article said “Few large-cap biotech concerns have a clearer earnings and revenue growth trajectory over the next 3-5 years than Celgene.”
The 9 actual portfolios carried out by Terry's Tips are having a great 2017 so far. Their composite value has increased 23.8% for the year, about 4 times as great as the overall market (SPY) has advanced.
The basic strategy employed by most of these portfolios is to bet on what the company won’t do rather than what it will do. Most of the time, that involves picking a blue chip company that you really like, especially one paying a large dividend, and betting that it won’t fall by very much. You don’t care if it goes up or stays flat. You just don’t want it to fall more than a few points while you hold your option positions.
Today, I would like to offer a different kind of a bet based on what a popular company might not do. The company is Tesla (TSLA), and what we think it will not do is to move much higher than it is right now, at least for the next few months.
How to Make 27% in 45 Days With a Bet on Tesla
Tesla is a company which has thousands of passionate supporters. They have bid up the . . .
Last week I suggested a bearish spread on Tesla that would make 67% in 49 days. The stock has fallen about $7 since then, and the spread that I placed has already picked up 30% in a single week. I am tempted to close it out and take the profit, but I think I will wait it out and happily collect the entire 67% in six weeks.
Today I am reporting on a spread I placed on Ford (F) on Friday when the stock was trading at $12.54.
How to Make 40% in 45 Days With a Bet on Ford
Several articles have been published lately which are bullish on Ford, including Ford and Its 4.8% Dividend Yield, and Ford: Break-Out Ahead
On Friday, when F was trading at $12.54, I made a . . .
Today I would like to share some thoughts I sent out on Saturday to paying subscribers at Terry's Tips. These thoughts reflected on the recent successes of the nine actual options portfolios we carry out and comment on each week. By the way, all nine portfolios are profitable for 2017 and the composite average gain is currently 28.9% since the beginning of the year. Last week while the market (SPY) fell 0.3%, our portfolios gained an average of 3.2% for the week, demonstrating that we don’t have to rely on a rising market to enjoy portfolio gains.
What Can Be Learned From Successful Option Strategies
If we can identify the strategies that resulted in the extraordinary returns we have enjoyed in the first quarter, maybe we can use those strategies for other underlying stocks or ETPs and time periods.
First, we must admit that we had some good luck. Anyone who makes these kinds of returns must admit that some of it was based on pure luck. Anyone who follows the mutual fund industry knows this intimately. Every year, millions of . . .
I would like to share a trade that we made in one of our Terry's Tips portfolios today. By the way, we have 9 portfolios that we carry out for paying subscribers where they can see every trade (including commissions) as we make them. All of these portfolios have made positive gains so far in 2017, and the composite average has picked up 28.8% at the end of the first quarter. Not bad compared to conventional investment results.
Enjoy today’s offering.
44% in 46 Days From a Play on ULTA?
There is a lot to like about Ulta Salon, Cosmetics & Fragrance's (ULTA). It has been a darling of Wall Street this year, rising about 50%. It appears on IBD’s Top 50 list of momentum stocks. The Motley Fool guys have written over 300 articles on the company and include it in their top three beauty stocks. The company has a plan to add on 500 new stores, and they have exceeded earnings estimates every quarter for the past year.
The chart for the last year shows . . .
Today’s idea involves an esoteric Exchange Traded Product (ETP) called SVXY. It is one of our favorite underlyings at Terry's Tips. Chances are, you don’t know very much about it, and I can’t help you much in this short note. But I will share a trade I made on this ETP this morning, and my thinking behind this trade.
40% Possible in 2 Weeks With an Iron Condor?
The best way to explain how SVXY works might be to explain that it is the inverse of VXX, the ETP that some people buy when they fear that the market is about to crash. Many articles have been published extolling the virtues of VXX as the ideal protection against a setback in the market. When the market falls, volatility (VIX) most always rises, and when VIX rises, VXX almost always does as well. It is not uncommon for VXX to double in value in a very short time when the market corrects.
The only problem with VXX is that in the long run, it is just about the worst equity that you could . . .
Facebook (FB) has had a great year so far, gaining just over 30%. Terry's Tips has an actual portfolio that trades calendar and diagonal spreads on FB. This portfolio has gained 157% this year, more than 5 times as much as the stock has gone up. A big part of this gain came just after the January earnings announcement when the stock dropped a small amount on the news.
FB announces earnings after the close on Wednesday (May 3), and I would like to share some trades I made today in my personal account at my favorite broker, tastyworks. These trades approximate the current risk profile of the Terry's Tips’ FB portfolio.
Interesting Earnings Play on Facebook
Terry's Tips carries out 9 actual portfolios for paying subscribers. After the first four months of 2017, all 9 portfolios are in the black. The composite average has gained 34.5% for the year, certainly an outstanding result. The FB portfolio is by far the greatest . . .
For the first time ever, I will share with you the exact strategy we use in one of the 9 portfolios we carry out at Terry's Tips. I will reveal the exact positions we have in this portfolio, their original cost, and our reasoning for putting them on. This portfolio started out with $3000 at the beginning of 2017, and has gained 83% so far. It is not our best performing portfolio, but it exceeds the average 2017 gain of 51.7% for all 9 portfolios.
Actual Positions in One Terry's Tips Portfolio
Our Honey Badger portfolio is one of our most aggressive (least conservative). Our strategy is to select companies which rank high on the Investor’s Business Daily Top 50 List, and make the assumption that these high-momentum stocks will continue to be strong for another six or ten weeks. The stocks don’t actually have to go up at all for us to make the maximum gain on the spreads we place. We select strike prices which are just below the then-current stock price so we can tolerate a small drop in the price while we hold the positions.
Here are the exact words we published in our June 3, 2017 Saturday Report which reviews performance of all nine portfolios:
Summary of Honey BadgerPortfolio This portfolio started with $3000 in early . . .
This week we are discussing another of Investor’s Business Daily (IBD) Top 50 List companies. In one of our portfolios, we use this list to find stocks which have displayed a strong upward momentum, and we place spreads which will profit if the upward momentum continues for about six more weeks. Actually, the stock can even fall a little for the maximum gain to be made on these spreads.
Will Nvdia (NVDA) Continue Its Upward Momentum?
Several articles have recently been published on the positive outlook for NVDA. Here are two of them - Nvidia: Citigroup Analyst Thinks The Stock Can Go To $300 and BofAML pushes Nvidia to new price target high; shares up 2.7%.
If you agree with these analysts, you might consider making this trade which is a bet that NVDA will continue its upward momentum (or at least not decline very much) over the next six weeks:
Buy To Open NVDA 21Jul17 145 puts (NVDA170717P145)
This week we are featuring an option trading idea based on a stock on the IBD Top 50 List that just delivered robust earnings guidance. We have added this spread to the Terry's Tips portfolio which trades vertical credit put spreads on selected IBD Top 50 companies (this portfolio has gained 77% so far in 2017).
Is Alibaba (BABA) Ready to Accelerate Higher?
Alibaba, broke out to fresh all-time highs last week following better than expected financial results both on the top and bottom line. Prices have been forming a bull flag pattern which is a pause that refreshes higher.
If you concur with the views expressed by these analysts, consider making this trade which is a bet that BABA will continue to advance (or at least not decline very much) over the next five weeks:
What impressed investors even more than the company’s financial result, was the company’s forward . . .
This week we are looking at another company listed on the Investor’s Business Daily (IBD) Top 50 List. We use this list in our portfolio to find stocks that have been strongly trending higher and this week's stock is an outperformer which has done exactly that. The Terry's Tips ’ portfolio that uses this list as its source for underlying ideas is now up 90.3% for the year to date.
Lumentum Holdings (LITE) Is Coiling For An Up Move
Lumentum Holdings hit all-time highs earlier this month and analysts believe there's further upside ahead. Here are two articles that reveal where Lumentum could be heading and why - Lumentum (LITE) PT Raised to $80 at Needham & Company; 3D Sensing Could Double LITE'S Value and DA Davidson Starts Lumentum (LITE) at Buy.
The technical outlook for LITE is solid. The stock has been trending higher for over , , .
This week we are featuring an option trading idea based on a stock that just broke out following the Senate healthcare bill. I hope that it is of interest to you.
Merck Breaks Out, can it Continue to Trade Higher?
Merck, broke out to fresh all-time highs last week following news from the proposed senate bill that would allow for less regulation and would not crack down on drug pricing. The Senate appears to be moving toward a vote, which should keep MRK buoyed.
If you concur with . . .
This week we are featuring a company listed on the Investor’s Business Daily (IBD) Top 50 List that has also recently been added to the S&P 500 index. The stock has displayed strong upwards momentum and we look to place spreads that take advantage of this underlying strength.
Align Technology (ALGN) A Buy After Being Added To The S&P 500
Align Technology is the designer and manufacturer of the Invisalign System which they state is the most advanced clear aligner system in the world. Analysts are optimistic of the company's growth prospects and have recently revised up their expectations. Zacks ranks this stock as a Strong Buy and these analysts have recently raised their targets: Align Technology (ALGN) PT Raised to $175 at Morgan Stanley; Huge At-Home Ortho Opportunity and Leerink Lifts Target On Align Technology, Sees 27% Upside.
From a technical perspective, ALGN boasts a strong uptrend and . . .
This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 companies. In one of our portfolios, we use this list to find stocks that have displayed strong upward momentum and place option trades that take advantage of the trend.
Consider NutriSystem (NTRI) After The Price Correction
Several research firms have recently upgraded their rating on NutriSystem, the following article provides some details – NutriSytem Inc Receives Consensus Rating of "buy" from Brokerages. As well, some big players upped their exposure to NutriSystem in the first quarter which is discussed in this article – Swiss National Bank Boosts Stake In NutriSystem Inc.
From a technical perspective, NTRI broke higher from a bullish flag pattern in late June to signal that a seven-week correction from a high posted in April may have completed.
This week we are featuring a company that was just added to the Investor’s Business Daily (IBD) Top 50 List. I hope that it is of interest to you. The Terry's Tips’ portfolio that places trades on our selections from the IBD Top 50 List has gained 117.7% so far in 2017. Terry's Tips subscribers who have trades placed in their accounts through Auto-Trade or who follow the portfolio on their own are happy campers right now.
Is Taiwan Semiconductor (TSM) Ready To Resume Higher?
Taiwan Semiconductor has been gaining popularity among investors as the company supplies key components used in the Iphone. Apple's smartphone saw sales exceeding 50 million units last quarter. These analysts weigh in on why there may be further upside ahead for Taiwan Semiconductor's stock . . .