Netflix is a high-flying growth stock with a sky-high valuation based on its price-to-earnings multiple. Due to its rapid growth, expanding original programming, wrestling market share away from big cable companies, expansion into international markets and its overall ubiquity, it’s difficult to arrive at an accurate valuation based on traditional metrics. Due to these factors and the difficulty of placing an accurate valuation on Netflix, options in the form of aggressive covered call writing may be an effective way to leverage this high-flier while mitigating downside risk and generating additional income. Netflix offers a confluence of volatility, liquidity and a high level of interest which gives rise to high yielding premiums on a bi-weekly or monthly basis which bodes well for options trading. Selling aggressive covered call options (i.e. aligning the strike price at or near the current price) to generate current income may augment overall portfolio returns while mitigating risk. This may be particularly invaluable if one is long a highly volatile stock such as Netflix. Below, I’ll walk traders through an aggressive options trading strategy leveraging Netflix stock a proxy. Continue reading "An Aggressive Covered Call Options Strategy For Netflix"
Tag: Options Strategy
S&P's Stabilize, But Is The Low In?
The S&P rallied a jaw-dropping 60 points during Wednesday's session and left many traders wondering if the lows are in? Using eSignal software, I dive into the price action and outline the exact boundaries that should contain this "recovery."
Learn more about TradingAnalysis.com here.
Plan Your Trade, and Trade Your Plan,
Todd Gordon
Aggressive Covered Call Options Strategy To Generate Current Income
Selling aggressive covered call options (i.e. aligning the strike price at or near the current price) to generate current income may augment overall portfolio returns while mitigating risk. In brief, options are a form of derivative trading that traders can utilize in order to initiate a short or long position via the sale or purchase of contacts. In the event of a covered call, this is accomplished by leveraging the shares one currently owns by selling a call contact against those shares for a premium. An option is a contract that gives the buyer of the contract the right, but not the obligation, to buy or sell an underlying security at a specified price on or before a specified date. The seller has the obligation to buy or sell the underlying security if the buyer exercises the option. An option that gives the owner the right to buy the security at a specific price is referred to as a call (bullish); an option that gives the right of the owner to sell the security at a specific price is referred to as a put (bearish). I will provide an overview of how an aggressive covered call is utilized and executed to generate current income and mitigate risk. Further details focusing on actual examples of selling in-the-money covered calls and the ability to sell these types of options in an aggressive manner to generate cash in one’s portfolio will follow. Continue reading "Aggressive Covered Call Options Strategy To Generate Current Income"
I Was The Most Hated Guy On CNBC Today
I pulled some of that Fibonacci voodoo that we do on Apple and if the uptrend support does break around $96, Apple is headed into the lower 80's.
I did a video for CNBC.com and they tore me to shreds in the comments section. The last time I got this kind of reaction was when I said oil is headed towards $26.00 while trading $41 at the time.
From there we take a look at our options positions in the S&P and AMZN.
Learn more about TradingAnalysis.com here.
Plan Your Trade, and Trade Your Plan,
Todd Gordon
Why Would Anyone Share A Successful Trading Strategy?
I recently asked people who had seen my 10 Minute Options Strategy to send me some feedback.
I wanted to address a question that I saw one too many times.
"Why would anyone share a successful trading strategy, instead of just using it to get rich on their own?"
It disappoints me that someone would be so skeptical that they would ask this question, but at the same time, I get it.
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So, I decided to make the video above to share 3 personal and 3 financial reasons why I teach in addition to trading my own strategy. Trust is earned, not given, which is why I think it's important that you know where I'm coming from and what my goals are.
I can't speak for everyone that chooses to share their trading strategy, but you'll learn why this matters to me. Also, I urge you to check out MarketClub Options. I hope you'll join our trading tribe and learn to trade options using MarketClub alongside myself and other members.
Best,
Trader Travis
Co-creator, MarketClub Options
