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How much return do you earn from writing a covered call?

The answer: That depends. There are two important qualifying tests you have to apply in order to ensure like-kind comparisons between two or more covered call outcomes. Assume you write two different covered calls on the same day and both expire worthless. Also assume that both were written on stocks you purchased for $5,000, and both earned a premium of $250.

These covered calls both earned 5%. However, that is not the end of the story and,

Radar and Specialty Technical Publishers (STP) Launch Online Risk Management Assessment Program

Announcing ERM BenchMarker™, offering tailored assessment of risk management effectiveness and improvement based on decades of experience in risk management, and organizational competence in managing risk.

Radar, The Risk Management Company providing Consulting, Engineering, Education and Software Services, in partnership with Specialty Technical Publishers, premier North American publisher of audit, co

Of all the candlestick indicators, only a few are as strong as the black crows (also known as three black crows). This is a set of three (or more) consecutive black (downward-loving) candlesticks.

Why is it so strong? First, it is a 3-day consecutive downward-moving indicator. Second, each session opens within the real body of the previous session, and then closes lower.

The second day opens lower than the opening of the first; and the third day opens lower than the opening of the second. Each clo

So, when you think about summer travel safety, what comes to mind? Which beach you’ll be lounging on? Sunburns? Shark attacks? While sunburns and vacation plans are rational concerns most have when traveling during the summer, shark attacks are a new one.

With all of the news of recent shark attacks, people are now anxious about wading into the waters, despite the fact that the chances of getting mauled by a shark are a whopping one in 3.7 million. No guarantees, of course, but your odds are look

Selling short options as part of a swing trading strategy is a higher-risk strategy than the opposite focus on long options only, although the degree of risk might not be as severe as you think at first glance. This is true for seven reasons:

1. You can cover the short call with ownership of stock. In this case, you combine covered calls with uncovered puts.

2. The short put risk is not as severe as the short call risk, especially on lower-priced stocks, where the distance between strike and tangi

The word "harami" means "pregnant" in Japanese. This is explained by the shape of the two-session indicator, with the second day entirely within the trading range of the first.

However, this pattern is only reliable as a reversal signal about half the time. So by itself, it cannot be relied upon to take action in either entering a position or exiting it. You need more.

The harami serves as confirmation, however, for other reversal signals. So if you see a signal in the firm of a candlestick patte

This October 14-16, MoneyShow.com will present this year's International Trader's Expo. From the website:

"Join thousands of your fellow traders for this three-day event that will have a substantial impact on your trading success in today's markets. We're bringing together the country's top trading pros with one goal in mind-to teach you their best trading strategies to help you profit in the months ahead."

Registration is free. You can sign up at Las Vegas Traders Expo, where further details are

What a disgrace: A private investigator, Eric Saldarriaga, 41, got nailed for hacking into peoples’ e-mails. He may get six months in the can. Is six months reasonable for this, though?

A recent online New York Times article quotes a prosecutor who points out that hackers could be deterred by the threat of harsh penalties—because the mind of a hacker operates with a lot of thinking, vs. the mind of someone who impulsively pulls out a gun or knife.

So what did Saldarriaga do exactly? He paid an ove

Can options work in a conservative way and actually help protect your portfolio?

Most conservative investors traditionally have seen options as high-risk, speculative plays on short-term market swings. This is appropriate when you think of the many high-risk option strategies available. But increasingly, options are going mainstream as even the most risk-averse investors find ways to use options to lower risks while protecting their long stock positions.

Three basic ways this is accomplished:

1. Co

An in-depth investigation by the non-profit analysis organization RAND reveals that hackers and their attacks are maturing at a much more rapid pace than organizations’ cybersecurity programs. Hackers now regularly and successfully plan sophisticated attacks to gain valuable information from large, well established organizations. In June 2015, Tony Scott, the CIO of the federal government, stated that organizations need “an architectural model that is secure by design rather than security slappe

So many traders start out with a sensible plan, only to abandon it because of the way the markets move. This abandonment of a smart plan invariably leads to potentially small added gains but large added losses.

In entering a trade, it is sensible to set two goals: the point where profits will be taken, and the bail-out point where losses will be cut. If you buy a long option, you should know going in that 75% of options expire worthless, so setting goals to sell and close make sense.

This does not

Remember the good ‘ol days when you thought of a finger pushing a button that launched a Russian missile that then sped at seven miles per second towards the U.S. to blow it up?

Little did we know back then what would one day be a way for the Superpowers to war on each other: cyber technology!

A new book is out called Ghost Fleet: A Novel of the Next World War, written by Peter W. Singer and August Cole. WWIII certainly won’t be wrought with speeding missiles and hand-to-hand combat in the trenche

As non-banks enter the financial services marketplace through innovative payment and banking offerings, it is vital for the financial services industry to establish design thinking and innovation as an underpinning of their business model to incentivize the customer loyalty necessary to regain competitive advantage in banking.

Christopher Whitlock, Vice President, Executive Creative Director at Fidelity Investments recently spoke with marcus evans about key topics to be discussed at their upcomi

The curiously-named "iron butterfly" is a complex strategy offering limited losses and limited profits. It is an expanded version of the basic butterfly (two separate spreads offsetting one another). The "iron" version is a combined straddle consisting of four options instead of the butterfly's three.

An iron butterfly can be either long or short. The long version consists of a long call and long put at the same strike; and a lower-strike short put plus higher-strike short call. For example, a co

Stock investors need good, strong signals to identify timing of entry and exit. Even conservative buy-and-hold investors have to time trades to maximize the possibility of profits.

One candlestick pattern involving two sessions helps to build confidence. Of course, as with all indicators, you have to rely on reversal indicators and confirmation. So before buying of selling shares, master the art of identifying signals and then also finding confirmation in other signals.

One of the best reversal s

When you write covered calls, greater profits will be earned by writing several two-month positions per year, than from writing one covered call with the longest time to expiration. Time decay for further-out options is quite small, so writing options more than a few months away is equal to lost time. Based solely on option premium profits, focusing on short-term ATM or OTM contracts produces impressive annualized returns.

An example of the covered call and how to identify profit, loss and breake

A delta neutral trade is one in which a long and short options contain offsetting delta so that the net delta is at zero. Delta is a measurement of the degree in an option's price movement when the underlying moves.

The theme of delta neutrality can refer to many differently constructed strategies including spreads (covered and uncovered) and straddles. When an option position is covered with long stock (one short call offsetting 100 shares of stock), the delta neutral creates an equivalent stock

Did you know that sometimes, the apps you use for your smartphone have access to your personal information and are capable of sharing it? Are you aware that your privacy can be invaded across the network board? That includes Twitter, Facebook, Instagram, LinkedIn, Google+ and more.

And how can you tell which applications can do this? MyPermissions can tell you. Once you load this and do some setting up, you’ll see which apps on your device has access to your information.

For instance, it’s not jus

The dilemma of the long stock position is unending downside risk. This is where options serve their best purpose: as tools for portfolio management. Rather than use only as speculative and high-risk market plays, strategies like the synthetic short stock position protect against downside loss and, unlike the better-known covered call, offer a practical alternative to selling and taking profits. This position combines a long put and a short call. In a pure synthetic short, no stock would be held

In 2015, Amair Saleem was named the Global Risk Management Professional of the Year by the Institute of Risk Management. Saleem manages safety, risks, and regulations for Dubai’s Roads and Transport Authority (RTA), which serves many of the same functions the U.S.’s DOT does. So what has made Saleem such a preeminent risk management expert?

According to The Wall Street Journal’s “Risk & Compliance Journal,” the Dubai RTA sees more than a million passengers every day and manages 40 departments, wh