Guide to Option Trading Strategies and Technical Analysis.
The Option Trading Guide is a growing resource providing in-depth graphical guides to some of the most popular option trading techniques and technical indicators used in the market today. For your convenience and for trading stock options made easy, this site is divided into the following sections:
This section provides introductory information about stock options trading, from option basics such as terminology and usage to component options and basic options trading strategies.
This section provides graphical and tabular examples of more advanced option trading strategies that involve combining and manipulating the basic call and put options.
This section covers the basics of technical analysis and how to use technical indicators. It also contains graphical and tabular examples of some of the more popular technical indicators.
This section contains a range of resources relating to stock options trading and technical analysis, including trading articles, books, related websites and inspirational quotes .
If you have questions or are unsure where to start, do check out our Frequently Asked Questions page.
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John F. Carter — November 7, 2017.
Here are the entries we took on these stocks and where I've got my targets placed. . . . keep reading.
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It's always good to go back and review your trades to see if they're actually working. Two that we've been covering here have had solid results and there's two more worth considering. . . . keep reading.
Henry Gambell — November 3, 2017.
In Wednesday's free video we laid out a few ideas for AAPL pre-earnings. Let's see how those ideas look, and a few way you can modify the strategy to give you a little more room to the upside with no downside risk. . . . keep reading.
Henry Gambell — November 2, 2017.
FB reported earnings after the close today, and despite solid numbers, traded down after the report. When you find a bullish stock that is technically extended, this can be a great way to look at trading their earnings. . . . keep reading.
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Option trading made easy

We’ve devoted a number of pieces in our options education series to the covered call strategy in its various forms and iterations, and today we’re going to add one more twist to the list.
It’s an initiative called the “deep-in-the-money bull call spread, ” a variation of the simple bull call spread discussed in our piece on debit spreads. But as you’ll soon see, there’s a significant difference.
Components and Rationale for the Trade.
Covered call writers, of course, have the option of taking the traditional path and buying 100 shares of the underlying security and selling a call against it.
In this variation, however, the trader simply substitutes a deep-in-the-money call option for the shares; everything else stays the same. In so doing, the resultant cash outlay and the trade’s profit/loss profile are significantly altered.
Let’s look at a real-life example to flesh out the details.
With the stock moving sideways (blue lines), and your belief in the company’s prospects growing, you figure by late June that it’s a propitious time to employ a covered call strategy (green circle).
On the one hand, the covered call lowers your price per share for the stock – affording you a comfortable downside cushion should the current slide continue. And on the other hand, it offers you some good capital appreciation potential should the stock resume its rise over the next few months.
The only problem with implementing the strategy is the incredibly high cost of the shares. At a whopping $1,155 per Priceline share, you’d have to drop $115,500 just to cover the cost of the underlying stock! And even though the near month 1400 strike call is offering a fat $15 in premiums, the thought of ponying up that kind of cash is still a bit rich for you.
So you consider the deep-in-the-money call option instead, and – lo and behold – you see there’s an opportunity.
The six-month (December) deep-in-the-money 1050 call is now trading for $131, meaning you can initiate the long side of the trade for $13,100 instead of $115,500. What a savings!
The near month 1400 strike still represents the short side of the trade, so your cost to initiate is $11,600 ([$131 – $15] x 100).
Deep-in-the-Money Bull Call Spread vs. Traditional Covered Call.
A look at the table below illustrates all the parameters of the deep-in-the-money bull call spread versus a traditional covered call at expiration.
The deep-in-the-money bull call spread clearly offers both limited upside and downside potential on the trade. You’ll neither earn as much nor lose as much as you would with a standard covered call.
But with an initial savings of roughly 90% off the traditional covered call’s cost, it’s hard to argue against it. Particularly when it offers the possibility of writing additional premium in the ensuing months.
Forget everything you thought you knew about the market …
Because you’re about to discover a unique – and highly profitable – approach to stocks that maybe 1-in-1,000 investors know about. Yet it’s a simple, safe, and easy-to-use trading tactic that has, historically, made money nearly 90% of the time . Even better – following this simple strategy lets YOU determine how much money you make . Check it out now. Just click here. The next round of trades are all ready and waiting for you here.

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