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

If tax rates rise and government spending slows next year, the economy is expected to fall into a recession, according to the nonpartisan Congressional Budget Office. Some political pundits insist that Congress and the… Read More

Your subscription to The Daily Paycheck is now eligible for renewal. $FIRSTNAME$, As a valued Daily Paycheck subscriber, I am pleased to invite you to lock in the lowest renewal rate we… Read More

The earnings cycle is widely followed by economists and some long-term investors, but traders often overlook the state of the economy when they develop their… Read More

It’s no secret that stocks have enjoyed a big run higher in 2012, with especially strong gains in the major market averages during the past three months. It’s also no secret that much of these gains can be attributed to the… 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

The launch of the iPhone 5 has created a media frenzy. Hailed by many consumers and critics as the best iPhone ever, this new iteration of Apple’s (Nasdaq: AAPL) miracle product has kept all eyes focused on this once struggling computer company. The demand has been so high that more… Read More

The average IPO is up 23.1% year-to-date… Looking at the headlines, you wouldn’t know it. Newly listed tech stocks, such as Facebook (Nasdaq: FB), Groupon (Nasdaq: GRPN), and Zynga (Nasdaq: ZNGA) have grabbed the attention recently.#-ad_banner-# But… Read More

Wal-Mart Stores (NYSE: WMT) is one of those stocks just about every investor wishes they had from the beginning, since Oct. 1, 1970, when the company first went public. If you’d even been able to buy just 10 shares that historic day… Read More

The biggest winners in the past several decades have included “boring” companies like soda and energy drink maker Monster Beverage (Nasdaq: MNST), an 83,000% gainer, and UGG boot maker Deckers Outdoor (Nasdaq: DECK), which gained more than 10,000%. Studying these and other big winners, we can identify some simple characteristics that the greatest stocks share.#-ad_banner-# First and foremost is that the biggest winners are all real businesses. Small-cap stocks can include companies that are developing products or services, but have not yet generated any sales. As MNST and DECK demonstrate, there is no need to buy before sales confirm that… Read More

The biggest winners in the past several decades have included “boring” companies like soda and energy drink maker Monster Beverage (Nasdaq: MNST), an 83,000% gainer, and UGG boot maker Deckers Outdoor (Nasdaq: DECK), which gained more than 10,000%. Studying these and other big winners, we can identify some simple characteristics that the greatest stocks share.#-ad_banner-# First and foremost is that the biggest winners are all real businesses. Small-cap stocks can include companies that are developing products or services, but have not yet generated any sales. As MNST and DECK demonstrate, there is no need to buy before sales confirm that the company has a viable business opportunity. A record of sales is what distinguishes low-priced stocks with potential from the thousands of penny stocks that will never amount to anything. In addition to sales, the biggest winners also all started their quadruple-digit run-ups from a small market cap (less than $350 million) and a low stock price (less than $10 a share, and occasionally less than $1). We want to buy when they have positive momentum because that indicates that there are other buyers looking at the stock. One mistake many… Read More