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Options Trading Education

Taxes are an unpleasant certainty, and can be confusing for investors. But in "Tax Tips for Option Traders," WhatsTrading.com Senior Analyst and SchaeffersResearch.com contributor Fred Ruffy shares some pointers that can be as beneficial to your portfolio as a great winning trade. Also, our founder and CEO Bernie Schaeffer uses this issue's letter to SENTIMENT readers as a place to offer potential solutions for the trading challenge known as "tail risk."

Options Trading Strategies

Will your stock move higher or lower? When it comes to buying straddles, that part doesn't matter. That doesn't mean profit is guaranteed, however. In "A Trade for Indecision," CEO Bernie Schaeffer chats with our Senior Trading Analyst, Bryan Sapp, to dissect the long straddle trade -- from the strategy's basic construction (one long call, one long put), to profit/loss probabilities, and some ideal trade setups to watch for.

Trading Advice from the Pros

Gold has a solid "safe haven" reputation and the yellow metal has been trending higher of late -- but can it continue to make headway? In "Chasing Fool's Gold," Schaeffer's Senior V.P. of Research Todd Salamone and Digital Content Development Manager Elizabeth Harrow take a look at the gold sector from a contrarian angle, highlighting some important caveats and critical technical levels to remember.

Also inside this issue of SENTIMENT

In "Pro Pearls," TD Ameritrade's Chief Derivatives Strategist Joe Kinahan has four suggestions for reducing trader stress. Additionally, Bernie tackles reader questions about auto-exercise and range-bound trading. Finally, regular features in every issue of SENTIMENT include: Making News -- following notable developments in the options market; the Idea Lab -- an examination of technical and sentiment analysis tools; and .COM -- featuring the "best of" recent commentaries and blog posts from SchaeffersResearch.com.

Archives:

Spring 2012

Expiration Myths

Options may have been around for nearly four decades, but they remain shrouded in mythology and misunderstanding. In this issue of SENTIMENT, Bernie Schaeffer tackles all-too-common fallacies surrounding options expiration and trading strategies.

Winter 2012

Trading the News: A Contrarian View

We've got a sure cure for your crippling case of trader's block. Using this basic, four-step approach -- along with the array of helpful tools available at SchaeffersResearch.com -- just about every investor should be able to rustle up an actionable options idea to break out of that trading rut.

Fall 2011

Options Trading Education

In the second of his two-part series on technical analysis, "Breaking Down the Level," Bernie Schaeffer brings his trading lessons to life by breaking down two case studies. By utilizing uncommon, "uncrowded" chart levels, Bernie was able to pin down triple-digit winning trades on Green Mountain Coffee Roasters (GMCR) and Lorillard (LO) in a matter of mere weeks.

Summer 2011

Trading on the Level

Most traders are probably already familiar with the merits of technical analysis -- but when you're trading options, nailing the timing of a stock's rebound from support (or rejection from resistance, as the case may be) is a matter of the utmost importance.

Spring 2011

Souping Up the Short Term

It was once thought that the 30-day option was created for a populace of traders with an appetite for risky bets. Now there are “"weeklies",” which, yes, are listed a week before they expire. And they’re gaining popularity. Are they worth the risk?

Winter 2011

Trading the News: A Contrarian View

Sometimes you can get the best trading ideas from the media. But while magazine covers and TV gurus talking about the next gold rush or the end of days may seem anecdotal, when the common view is a crowded one, it pays to fade the trend.

Summer 2010

The Eternal Contrarian

Bernie revisits Humphrey Neill’s iconic The Art of Contrary Thinking and some of its most famous dictums, including that the crowd is right during the trend, but wrong at both ends.

Spring 2010

Money management

Don't put all your eggs in one basket. Sure, it’s a cliché, but like many other clichés, it's also good advice. Still, how much of my trading capital should I commit to a single trade?

Winter 2010

Expiring With Profit

If you think trading during expiration week is dangerous, think again. Not only do opportunities abound, but they can come with very little risk. The trick is knowing exactly what to do when there’s no time to lose.

Fall 2009

The Long Vertical Cure

There are times when directional opportunities abound, but conditions aren’t right for straight calls and puts. The long vertical spread -- also known as a debit spread -- offers a unique alternative to trading your bulls and bears without the risks associated with higher market uncertainty.

Summer 2009

Hunting for Hedges

When you’re bullish on a stock but the market seems to be running on fumes, perhaps it’s time to consider your options—pairs trading with options, that is. And the best part? What you can make when you’re very wrong.

Spring 2009

Are We There Yet?

How do you truly know when a new bull market has started and it’s not just another bear trap? Though the answers may not be obvious, they’re usually right in front of you. You just need to know where to look.