Is The Bear Growling?

Do you believe we are in a bear market? So what does that mean to your portfolio? In a bear market the equities take the brunt of the downside. In this case we see the NASDAQ down 21% from it’s high, the DOW 17%, and we may have more bleeding before it’s all over. So what is an investor to do?

It’s time to learn to use options to leverage your investment dollars. If  you own a stock the only way you make money is an increase in the price or receiving dividends. If you learn to use options you can make money when the market moves down, up, or sideways.  If you pull out of your stocks you may create a large taxable event. One way to prevent that from happening is learning to use an options hedge to protect your downside.

We believe you will benefit from becoming a member today!

As always, consult your advisor before investing of any kind. Options are not suitable for all investors and people can and do lose money. Invest at your own risk. Optionsdodjo makes no warranties or guarantees regarding our opinions.

Stock Replacement Strategy

If you have gotten out of the market and are going to try and time your reentry you may want to consider the following strategy. The stock replacement strategy is for stocks that you want to look at for a long term hold, or simply find them attractive at a much lower price. Let me give you an example. AMZN has dropped from $2000 to $1375.  That is a drop in excess of 30%. We don’t see this point as a good entry until we see some stabilization. That being said we would find it much more attractive at $1100 per share, that is another 20% drop from it’s current price.

The strategy would be to sell a put at $1100 strike price. This means that 20% down, and the premium you will receive will place you in the stock below $1100 per share. That is 45% off the high.  The beauty is that you are letting the stock come to you. If the stock is put to you, we believe it is a good price, if not you have collected the premium.   We would encourage you to buy out of the put if we have an outstanding rush to the upside. Keep an eye on our suggestions.

As always consult your financial advisor before investing of any kind. Options are not suitable for all investors, people can and do lose money. All investing involves risk, so having professional advice is key. Optionsdojo makes no warranties or guarantees regarding specific performance. Invest at your own risk.

The Train Will Come Eventually

This is how many investors operate. If you wait long enough the train will arrive. This is a sure way to lost a good portion of your portfolio. If a stock declines 50% it must move up 100% to get even. It is important to limit your losses. This is one of the reasons we believe you should learn to use options.

If you buy a call option your maximum loss is whatever you spent for the option. This is usually a fraction of what it would cos you to buy the stock and hold it. So if you believe a stock is going to jump due to earnings, management change, political changes, or other issues. You may want to consider using a call option to maximize your leverage. The same can be said for buy a put. If you believe the stock is going to continue to fall this may be a valid option.

For those of you that are holding and bleeding a little each day, we encourage you to learn to use options to protect your portfolio.

Options are not suitable for all investors and you should consult your investment professional before investing of any kind. Options can be risky, people can and do lose money.

Not all brokerage firms are the same.

A number of options users have asked what brokerage platform are we using to trade options? The advice we can give without selecting a firm is to list a number of questions you want to ask before placing your account with that firm. It is important that you ask firm if they allow using options in your IRA? We like the use in IRA’s as you don’t create a taxable transaction. We also find that many investors have the majority of savings in their retirement accounts. The use of options allows you to hedge the portfolio. Another question to ask what is, what is  the cost of your transactions? Our platform allows us to trade at $1.00 per trade (most trades). The fees charged will affect your net outcomes.  If you are going to use options as a strategy, go ahead and call the prospective brokers and find the platform that fits your needs.

We also suggest using optionsdojo to get your feet wet, and learn to immerse yourself in the learning curve. As with any investment, we advise that you never invest without consulting your professional advisor, options are not suitable for all investors and people can and do lose money.


Often we need to be told more than once.

TThe object of investing is making money. We all want to increase the values of our portfolio’s. When markets exist that scramble the basic tenants of investing you must learn to look outside the box. This is why we teach others how to use options.   Let us revisit the idea of collars.

A collar is where we buy and sell a put and a call. Now depending on your perception of the market the collar can be turned to accommodate investors needs.

An example would be (protecting your downside), you sell a call and thus receive funds. The second part of the collar involves buying a put where you spend the funds you received from the call premium.  If the stock falls the call will depreciate in value. The put will increase in value.  This type of collar can be very effective in a falling market. We encourage you to become a member of optionsdojo, so that you will know how to setup your collar.

Keep an eye out for upcoming videos and options selections in the coming weeks.

As always consult your advisor before investing of any kind. Options are not suitable for all investors and people can and do lose money. NEVER invest before consulting your professional advisor.

Fake News, Real News, take a look at CBS

As a major network we are definitely seeing more eyeballs on the news. The stock is closer to the bottom of $47.54 then the top of $61.59.  The dividend is only 1.25% that’s not much to speak of. However at it’s coming up in the next few days we may see some movement. You can get roughly 1% return in 7 days. So how’s that for upside. Remember we want just a little bit more. 

So we are buying here at $51.13 and selling the December 14,  51 call for .77.  Not a fortune but that’s .64 upside for one week. If you don’t get called away you will see a small dividend.

Our targets are designed to make just a little bit more. Nothing feels better than a profitable trade.

As always consult your advisor before investing of any kind. options are not suitable for all investors and people can and do lose money. The above is an opinion and no warranties or guarantees are given or implied. investing requires risk and each investor must due their due diligence before investing of any kind.

Chip on your shoulder?

NVDA has been pummeled. It is for this reason that we are looking to acquire NVDA under 200 and sell long term calls out to Jan of 19.  The option premiums are bringing 10% or more. AS NVDA is down 30% since the high we believe it’s a good opportunity to enter. For our PUT sellers we suggest the selling the November 2, 195 puts.  This will cover a short amount of time and give you the opportunity to get in under $200.  If the stock pushes forward you’ll pickup the premium.

This trade is not for everyone. Options imply risk and we suggest that before investing of any kind you consult your advisor. Our opinions may not match your investment objectives and options are NOT suitable for all investors.

Are you frightened by the recent downturn?

The use of options to hedge your portfolio is well known to those who have taken the time to learn the efficiencies of hedging a portfolio.  Over the last two weeks was a great time to be using what is known as a collar.  You can sell a CALL and BUY a put with the premium you receive. This way you limit the amount of money out of your pocket. The above is if you believe the market is going to go down. The call expires worthless as the stock declines and the PUT increases in value as the stock declines.

If you would like to be invited to our next learning session, you can email us at .

*options are not suitable for all investors, consult your advisor before investing of any kind, people can and do lose money investing in options*

Can You Play The News?

Beware investors of trying to use news as to momentum. On Friday TSLA blew up as everyone thought MUSK was out. Your Sensei was all over that and addressed the issue with staff. WE did not buy PUTS as our public was suspecting.  As with Martha Stewart you we suspected that big money would win the day and it did. The fine was 20 million but MUST still is in charge. They don’t lose the genius.

You may have seen that the stock was shorted. This means that you sell the stock and hope to buy it back at a lower price. This is the short explanation. If you play the options your risk is the price you paid for the PUT. So in some cases the options strategy is the way to go.

Options are not suitable for all investors, you should consult your advisor before making any investment of any kind. Our recommendations imply no warranties of specific performance. Invest at your own risk. People can and do lose money investing in options.

Listen And Learn

When I was a young man I thought I had plenty to say. As I matured I realized that listening to those who have been there can be profitable. If you’ve ever tried to hang crown molding without advice you know what I’m talking about.

At Optionsdojo our mission is to educate the investor so that you have more arrows in your quiver. Let us look at a strategy that allows those of you who have concerns that the market will decline to enter the market and limit your risk.

The strategy is stock replacement. You may not want to buy AAPL at the current price, nor AMZN, or even GILD.  However if you were to sell a PUT at 10% below the current price you would have some opportunity to make money and if a pullback occurs get the stock at a lower price. This is stock replacement. Eventually the market will have a decline, the question is when. As you hear the pundits scream the market is strong, beware that confidence in one’s decision does not equate to accuracy. Using the stock replacement strategy, if nothing else provides that you can make money by waiting or get the stock at a lower price.

Options are not suitable for all investors. We strongly encourage you to seek the advice of your professional advisor before investing of any kind. Our mention of a stock or ETF does not imply an endorsement or solicitation of that investment. Options are not for the risk adverse and people can and do lose money.