1. Strike Price – if the stock price don’t move beyond the strike price, then the option will expire worthless 2. Time to Expiration (time decay) – the longer the time, the higher the option price – the most time decay happens as option is near expiry 3. Effect of Interest Rate on short- term options prices…
Category: Education
Option Strategy – Long Stock; Stock UP/ DOWN since Purchase – what next?
Long Stock, Stock UP since purchase Next steps 1. Take no action – monitor price and change strategy if price outlook sours 2. If want to sell at my Target Price –> write Covered Calls – look for Strikes = stock target price, short time to expiration, high option premium –…
Cheatsheet for ETF Selection
1. Fund’s Longevity How many years have the fund been effective. Longer history suggests stability and track record to see the results. That said, past data does not imply future performance. 2. Fund Size At least USD 100 million AUM (Assets under Management). Larger AUM is better. 3. Expense Ratio The % of funds that…
Option Expiration
1. Expiration for Index and Equity Options is the Saturday immediately following the 3rd Friday of the expiration month (except when Friday is a holiday, then the expiration date brings fwd 1 day to Thursday). 2. American Style Option (usually the case) – can be exercised at any time prior to expiration, up to the…
Stock Picking Strategy – CANSLIM
CANSLIM is System for Selecting Stocks. It is created by William J.O’Neil, the founder of Investor’s Business Daily. Each letter represents a key factor to look out for when looking to purchase stocks in a company. C – current Quarterly earnings of a firm – last Quarterly earnings have > 20% growth A – annual…