By Don Fanstone, Member, Kitchener/Waterloo User Group
Option Blog May 24, 2015:
VectorVest advises buying undervalued Hi VST stocks in a rising market.
VectorVest will help you to make money if you follow VectorVest timing advice.
The “BUY” values shown below are $.10 above the previous high value unless posted otherwise:
USA: Color Guard Mildly Bearish, MTI 1.12, Up/Up, C/Up, Use caution.
Apple: APPL: Above: $134.54 October 120 Call Options.
Skyworks: SWKS: Above: $102.87 November 90 Call Options.
Avago: AVGO: Above: $136.38 October 115 Call Options
Criteo: CRTO Buy Range: $46.60 to $49.00 Oct. 40 Call Options
Canadian: Color Guard Neutral, MTI .88 Up/Down, C/Dwn Use caution.
Dominion Diamond DDC Above: $24.70 October 20 Call Options
Great West Life: GWO Above: $37.74 October 34 Call Options
Linamar: LNR October 76 Call Options
Magna: MG November 62 Call Options
Can. Tire CTC.A August $120’s or November 120’s. Look for a close above resistance on a new high of $137.58 to purchase.
Sells for the Week of April 27:
None
Buys for the Week of April 27:
5 Skyworks (SWKS) Nov. 90 Call Options @ $20.00
5 Magna (MG) Nov. 62 Call Options @ $10.20
Adding to a Position:
When adding to a position, if you purchase an equal amount of Call Options, you are effectively cutting your current profit in half. If the underlying security drops in price, a gain can quickly become a loss.
As the price of the underlying security rises in price, I normally purchase Call Options at a higher strike to initiate a new trade in lieu of adding the existing trade.
If the underlying stock drops in price, selling the lower strike locks in a profit and provides a cushion on the higher strike.
The Magna purchase this week is an example, as I am currently holding 5 Nov. 58 Call Options which are up 28% and in a position to lock in a gain on any price weakness.
Education:
The VectorVest Basic Options course is available online.
The VectorVest Intermediate Options course will be available on May 28th in Mississauga, and is already online.
The Montreal Options Website has a significant amount of information for those seeking to learn more about Options.
Visit www.m-x.ca
Look under the heading Education:
- Option Examples
- Option Blog Articles:
- Optimizing Your Covered Call Strategy by Richard Croft
- Strategies for Income Investors Seeking Yield by Richard Croft
- Excellent Blog Posts by Patrick Ceresna and Jason Ayres.
I encourage all to read Lee Lowell’s book “Get Rich with Options”.
Understand Options Before you begin to trade, there is much to learn.
DISCLAIMER: Options trading involves risk and is not suitable for everyone. The information contained in this Blog is for education and information purposes only. Example trades should not be considered as recommendations. Options training is strongly recommended before placing any trades. VectorVest offers a basic options course online and occasional intermediate options workshops in Canada each year.
Hello Don,
Your articles are very useful. Thursday I am going to attend Int. Options Course.
I trade only US options. Apple: APPL: Above: $134.54 October 120 Call Options.
I learned new strategy of buying call options deep in the money and longer expiry date. Does this
strategy works in rising Market?
I use Think or Swim TD account for US trades.
Shashi Karandikar Mississauga.
Hi Shashi:
Great to meet you last Thursday. You’re on the right track, patience is a virtue, something I could use more of and I am getting better. Impatience is too expensive!
Don