Did you have the misfortune of owning for-profit education stocks in the third quarter? Then you’re likely licking your wounds right now, and presumably, cutting your losses. Just look at the third quarter share price drops for some of the leading players in the sector. I noted… Read More

I’ve written many times about using a cash-secured put sale strategy as a disciplined way to enter a long stock position at a lower price or get paid not to.#-ad_banner-# I have a slight twist on this strategy that I call the… Read More

When he was head of General Electric (NYSE: GE), Jack Welch had one rule for his company: Be the top player in the field, or don’t even bother. The numbers backed him up. Business school professors repeatedly teach that an industry leader can have up to twice the… Read More

An options price is determined by a variety of factors, but volatility, the amount an underlying stock’s price is expected to move, is one of the most important factors to consider when trading options. If a stock is highly volatile, there is a greater chance that it will reach the option‘s strike price. With low-priced, high-volatility stocks, we can often trade inexpensive at-the-money options to take advantage of low-risk trading opportunities based on volatility rather… Read More

An options price is determined by a variety of factors, but volatility, the amount an underlying stock’s price is expected to move, is one of the most important factors to consider when trading options. If a stock is highly volatile, there is a greater chance that it will reach the option‘s strike price. With low-priced, high-volatility stocks, we can often trade inexpensive at-the-money options to take advantage of low-risk trading opportunities based on volatility rather than price. Bank of America (NYSE: BAC) is a low-priced stock (under $10) that has traded with a high amount of volatility during the past year. In the past 15 weeks, BAC is up more than 30%. That reversed a 32% decline in the previous 11 weeks. In the 15 weeks prior to that, BAC was up 105% after falling 30% in 13 weeks. BAC’s history of volatility is well established, and given this, I would expect options to price in a move of at least 25%-30% over the next four months. But the January 2013 options… Read More

Over time, the nation’s major department stores have always sought to provide consumers with a unique shopping experience. Sears Holdings (Nasdaq: SHLD) was known for a healthy mix of hardware and appliances along with the usual assortment of clothes, jewelry and shoes. Kohl’s (NYSE: KSS) was known for a solid… Read More

Transitioning from a niche drug maker into a “Big Pharma player” can be fraught with challenges. As these companies seek to grow through the development or acquisition of new drugs, they need to keep an eye on their existing portfolios of products… Read More

Every investor dreams about buying a beaten-down stock and riding it to riches. These are the kind of investments that can fuel incredible returns and give your portfolio a serious boost. But even though it may sound like something best left to… Read More

One of my favorite ways to evaluate the stock market is by taking a macro, top-down approach. This means I research what’s happening in the world’s major economies and use this information to project how it may affect stocks in the… Read More

Bad news can send stocks sharply lower, and that initial down move based on the news is often just the first step in a steeper decline. But unless the company is destined for bankruptcy, the stock will eventually stop falling and turn up. That’s the idea behind bottom fishing. There are some trading strategies that can be used to spot when the selling has gone too far and an upward bounce should be expected. But keep in mind that bottom fishing should… Read More

Bad news can send stocks sharply lower, and that initial down move based on the news is often just the first step in a steeper decline. But unless the company is destined for bankruptcy, the stock will eventually stop falling and turn up. That’s the idea behind bottom fishing. There are some trading strategies that can be used to spot when the selling has gone too far and an upward bounce should be expected. But keep in mind that bottom fishing should only be done in a bull market when stocks have a stronger tendency to rise.#-ad_banner-# The first step is to identify when the selling may have peaked. In a downtrend, it is very common to see the selling pressure accelerate. As prices fall, more and more traders want to sell and the result is a fast down move. When the selling stops, we often see prices bounce higher, and this is a good time to buy if we can find rules that define this pattern. To find… Read More

It may be one of the fastest reversals of fortunes we’ve seen with an initial public offering (IPO) in quite some time.  Before its May 18 IPO, Facebook (Nasdaq: FB) was growing its user base like… Read More