Why Stock Options?





Market Information for this Week.....

Why Stock Options?
-February 20, 2012

Most traders today still use stock options as pure speculation and don't realize the true potential of stock options. Now that we've reached a period that offers a low barrier to entry, it makes perfect sense to use options to their full advantage. Commissions are low and products are highly liquid. If you use the appropriate products, there is truly no edge now for the market makers.

Correlation Gauging for Stock Picking in 2012!
-February 20, 2012

Correlation gauging has fallen significantly this year, indicating it might be time once again to utilize a stock-picking prowess. In 2011 stock correlation peaked at around 90%, and spent most of the year above 80%. In 2012, it has fallen dramatically, and currently stands around 43%.

Stock Pullback – Time to Buy Portfolio Insurance!

A stock pullback provides buying opportunities and this is evident so-far in 2012. The Dow Jones Industrial Average (DJIA) and Nasdaq Composite (COMP) have both rallied their way to new multi-year highs although several other equity benchmarks -- including the S&P 500 Index (SPX) -- finished the week just shy of their 2011 highs. Portfolio insurance became cheaper this past week, as SPX historical volatility was flat, while the CBOE Market Volatility Index (VIX - 17.78) decreased 14%, closing the gap between implied and historical volatility on the SPX.

The Week Ahead in the Stock Market - February 20, 2012

In the week ahead stocks may find it difficult to maintain the 9-month highs as everyone is waiting for a stock pullback! With results in already from 404 S&P 500 companies, investor focus may already have shifted away from earnings – the outlook for Europe and the U.S. economy -- data on existing- and new-home sales – will take the limelight.




"Success is simple. Do what's right, the right way, at the right time."


Option Tip for your Success!
Options traders are not successful because they win.
Options traders win because they are successful.


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