Apple announced earnings today after the close.. Usually at earnings there is a bigger move than usual in whatever direction. As I write, Apple’s earnings are below than expected and the stock is down 8%. Good Defined risk earning strategies are put spreads and call spreads. If you sold a call spread, good job, take your profits and look to deploy your capital elsewhere. If you sold a put spread, you can..
1. Hold, the spread you sold is probably 30 days out
2. If you are not confident about being long, you can roll your spread into another spread a week later and you should get the top put strike the same or even lower that your existing put spread. This will buy your time..
3. Sell a call spread above the stock price of apple, this will bring you in more premium which you can offset against your loosing put spread..
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Trade small and trade often is how option traders stack the odds in their favor. Let me give you an example. If a stock is trading at 60. You sell a 65 call option ( As you can see 5 points above the present price ) 30 days out. By selling a call option – if the stock bypasses 65 at expiration – you have to cough up 100 shares per option contract to the call option buyer. So if the stock is at 68 at expiration, you have to go into the market ( this will all happen automatically within your brokerage account) get the shares at 68 and sell them back to the buyer at 65. So basically you would lose on this trade..
But here is the kicker – if you did this 100 times, how many times would you be exercised?. You probably have a 65 to 70% possibility that you will not get exercised and that that particular stock wont reach 65. Its the same on the put side – sell an out of the money put a good bit below the present stock price with again small funds. if you have a 70% probability of success on your trades and you are doing enough trading to make the probabilities – you should make money as long as you don’t get wreck-less..
I forgot to mention above with the call option example – you have the possibility to roll your trade into the following month to give yourself more time. you wont make much but you could turn a losing trade into a scratched trade or a small winner..
Think probabilities – think occurrences and above all stay small as one bad big trade has buried many a trader…
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A lot of people lost a lot of money in the financial crisis of 2008. A close relative of mine lost a substantial amount of money because he was following old outdated techniques… The old way of investing was to ring your broker, go long a company by buying some stock and then holding.. This way is still being used today but its still outdated unless you are in control of your investment. Let me explain..
If you do this through a broker, he really is in control of the investment. If your investment turns against you, you will probably hold onto it until you recover your losses. Alternatively, if your investment goes in your favor, you will also hold onto to it hoping that your gains will increase. Don’t worry, this isn’t just you, this is how society has been programmed – Invest for the long term.. The problem with this way is that you never get paid until you cash out. It doesn’t matter if your down or up – you never get paid until you sell your stake.. This was the old way and this was the way banks and brokerage firms brainwashed us us to invest..
You see, investing like this is very profitable for financial firms.. They take your money – brainwash you to invest for the long term and then they use your money to try and make stellar returns.. Its the same principle as having money in the bank earning 1% interest if your lucky. You are probably loosing money when you add-up taxes and inflation whilst all the while the institutions are using your money to get rich.., Like the old way and hopefully people are waking up but tits still pretty slow because these banks and institutions can relay a lot of fear into society which will again cause people to save and invest for the “long term”
Here is the new way of investing. The new way is all about taking control. Its about diversifying your assets, its about doing your own research, its about taking 100% responsibility.. You try to make high probability trades. Trades that have a 70% chance of being successful.. The difference now being is that you execute the trades – you don’t ring a broker to do it for you. You now take profits when they are there to take, you don’t wait and invest for the long term.. The world is moving so fast now, companies that are around today might not be around in five years, we need to act today
I will discuss soon how I place these high probability trades
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Yes I’m so excited about this. We are due to have our next baby in February. We already have a boy (Adrian who is six). Family means a lot to me.. My wife hasn’t had the smoothest of rides in this pregnancy but all is still OK at this point. She will be 34 weeks come next Wednesday. If all goes well, we have another 4 to 6 weeks left before the little baby comes out to join us
I put both my health and my family before career and money. Do you agree with my value chain?. All three and very important, I mean
2. Family & Close Friends
and you have can have a fantastic life with the first two. Nevertheless , I have seen so many wealthy people who haven’t had their health nor meaningful relationships. I would prefer even to just have my health rather than be rich and unhealthy…
So guys and girls to attract money into your lives, you need to be really grateful for what you have..
If you have good health, be grateful for it. If you have great relationships, be grateful for them. I live in a country with a fantastic climate and I feel great when I wake up every morning, take a few deep breaths and see the sun shining in the cloudless sky.. Give thanks and be grateful and the universe will respond.., Expect good things and good things will happen in your life.. For what you give out and appreciate, you will receive more of it back..
Do you see where I’m coming from here?, Do you agree with my value chain?
To sum up, here is a eco scan of my new child 7 months gone. Im so grateful that Im going to be a Dad for a second time.. So let me know what are you grateful for today?
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