My Bag Holder Experience in Tesla — Seeing -55% Disappear in 25 Minutes

A bag holder is a stock market sucker. This is an investor who buys a stock, hoping it goes higher, but then gets caught “holding the bag” as the stock eventually crashes. For some reason, we investors like to believe we’re never the bag holder of a stock, and never will be. I’m ashamed to admit […]

How Options Time Decay Destroys the Prices of Calls and Puts

Options time decay can be one of the most insidious forces to lose you money as you buy call and put options. As I mentioned in my options for beginners guide, time decay (known as theta) erodes the price of an option over time and is the primary reason why an investor would take the […]

How to Trade Options: A Beginner’s Guide to the Risks (and Rewards)

Table of Contents [Click to Skip Ahead] Intro to Options The Two Most Basic Options Contracts The Options Killer: Time (Theta) How to Create a Safe Income Stream from Options How to Calculate Potential Profit and Loss on Any Call or Put Other Strategies and Important Risk Management The Martyrs of Options Trading and Their […]

Selling Covered Puts for Great Premiums: It Doesn’t Have to Be Risky

Getting down to the basics of selling covered puts really helps the options trader conceptualize the risks and reward profile behind the trade. The big risk for the seller of covered puts comes down to this: If the buyer of a put option has the option to put their shares on someone else, then the […]

Pyramiding Your Protective Calls and Puts When Trading in a Trend

As I mentioned in my Trading Options for Beginners post, I’ve been dabbling with quick day trades with options, and using a protective call or protective put to shield against a reversal. I took the protective call one step further by pyramiding this protection and giving myself exposure to upside potential after already exiting my […]

Examining Small Caps for Speculators

If you are a stock speculator, you believe you can outperform the market and markets are not efficient.  Regarding the subject of market efficiency, I am not a proponent of the efficient market hypothesis at the small-cap level because there simply isn’t the same number of investors looking at what the company is doing and […]

Trend Following for Beginners

Trend following is probably the single-most successful method I have used in stock speculation and it can be an easy strategy once the necessary research has been conducted.  I believe that our results in practically any endeavor in life are directly proportional to the amount of effort we are willing to expend.  Get ready for […]

Stocks Vs Options: What Beginners Need to Know

If you haven’t already, you’ll quickly discover the sexy, fast moving counterpart to stocks — options. It’s hard not to stumble upon these shiny derivatives. Brokerages constantly pitch them as a quick way to massive returns. (They’re also a quick way for the brokerage to generate commissions for itself.) “Options can double, triple, or even […]