The cost of a call and the cost of a put are almost directly related. If you have a $40 stock, a $40 call and a $40 put will be almost exactly the same price most of the time. If there is a difference, the possibility of an arbitrage usually exists meaning that there is a 0 risk strategy (minus commissions) to get something for nothing. This is true whether it’s a collar or another strategy. I don’t completely understand the full process that allows for that to happen, but a complex series of trades usually makes it possible. So if the price of a call and put are going to be the same that means generally the higher priced calls are due to greater risk. Some reasons may be historical volatility, as that plays a roll, but the implied volatility, that is, how much people expect or are betting on the stock to move, becomes important.

One covered call strategy is simply to seek the maximum yielding calls to sell. If you decide on this strategy, you probably want to check the recent put volume on this month’s contracts, and you also may want to make sure the company is solvent. It should have positive cash flow more current assets then current liabilities, and ideally increasing cash flow.

Often times biotech stocks will have negative cash flow because they have to spend money researching and eventually they hope to hit a major discovery. These stocks are very difficult to price as a discovery would make the company worth a lot, an approval of F.D.A. will also catapult the stock much higher. You also should look for some recent strength in the stock, and there should be no bearish chart patterns, that means no chart patterns as well as no sudden high volume sell offs recently and generally a stock that has had a sudden sharp drop is also a warning sign.

If you feel comfortable with selling these higher priced options, you want the sudden move that’s expected to be upward if at all. You are in a way betting that a move will not happen. Once you identify a target, I recommend selling slightly deeper in the money calls as this will cover you more in a decline. You will be collecting the theta, which is the cost of an options potential for gains that the option buyer must pay.

However, if you seek the highest yielding covered calls you can sell, head over to optionsbuddy.com. http://optionsbudy.com is a great way to identify the highest yielding stocks. They also have a rating system, which I have not read about, but my guess is that may be based on historical volatility vs. implied volatility where implied volatility is what the investors expect (and what factors into the options price), not what has happen recently; and perhaps it is also based on the yield compared to the risk, the difference between the bid and ask price, the liquidity, and the market cap and other factors. Google for example, would need a lot more people to sell then a micro cap stock for the stock to crash. A stock with high float has a lot of traded shares already, so if suddenly people were to start selling it may not have as huge of an impact on the price.

Maclin Vestor teaches about varioustrading systems and teaches you to find a trading system that works for you.

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A covered call strategy is great, as it can allow you to get your income back, and put it to work elsewhere quickly. In addition, time value is certain, and covered calls will allow you to collect this value while speculators betting on a stock rising beyond the option price plus what they paid for the option will have to pay this amount to you no matter what. Even if the stock does go beyond this point, you don’t incur a loss; instead, you miss out on potential gains. This can cause a covered call strategy to be more stable. You ultimately want the stock to expire at the money as this will allow you to collect the full premium, and still own the stock. Anything above this and your gains of your stock will cover the loss of the call and your gain will ultimately be the same. However, if it goes higher, you will have to repurchase your shares at a higher price, although selling another call against them will result in a higher premium.

Some covered calls will yield a 10% monthly return based on it’s time value premium that you collect, meaning that in 10 months you will have your initial investment back if you can successful receive the full time value. The risk is not that the stock goes up in value and that you miss out on potential gains, as the yield will be roughly the same after appreciation, but that the stock goes down dramatically in value. However, you cannot lose more than your initial investment minus the full premium. This is a major point that critics of the covered call strategy often miss, as they say it has “the same risk profile as selling naked puts.” This means that if you sell a put you are un-hedged, and if the stock goes to zero, you are also limited to the loss of the strike price minus zero times $100. Where a put owner will gain $100 per share ($10000 per contract) if a $100 stock goes to 0, a put seller will have to pay the put owner this $10,000 per contract. Selling puts is dangerous because people generally do not manage money well. The top 10% of people own the other 90% of wealth generally because the top 10% have learned to manage their money better than the other 90%.Selling puts is dangerous, because if you sell a $100 put for $500 your gain is capped to $500 per contract for a given length of time, and your potential loss is $10,000. Now a covered call owner may be capping his gain to lets say $500, and if the stock goes to zero, he is also going to potentially lose $10,000. So why is a covered call generally less risky? The reason why is that unless the seller of the put has $10,000, then he risks going on margin. In addition to actually having to have put up what the buyer affords to risk, The buyer of the stock not only is required to have that 10,000 before he can buy 100 shares of $100, but even someone with a limited understanding of risk management will do at least something to manage risks, even if it’s still investing a high percentage such as 20% of the income that loss is limited to 20% of the portfolio. Technically that buyer should risk only a smaller percentage of his capital. A seller of a put receives $500, but to collect $500 and have to leave $50,000 to the side doesn’t seem naturally as rational. People that invest in a covered call buying a stock for $10,000 and collecting a $500 premium and invest the remaining $40,000 will be risking less than someone who sells a naked put, but invests the remaining cash. Of course the reason is, the put seller has to have $10,000 to cash if the stock goes to zero.

However, there’s an even greater difference. In the event of a loss when the stock doesn’t go to 0, the covered call seller experiences a paper loss; where as a put seller experiences a real loss. The covered call owner might put up $10,000 and that $10,000 suddenly is only good for $8,000 and all he has received is the $500 premium for the covered call. However, if this person has done the research and determined that the stock is undervalued, and is currently in a panic due to margin calls and forced selling, and that the fundamentals are good, the covered call owner still owns the 100 shares of the stock that they determined to be worth $140 at $100. Technically the put seller could choose to buy that same stock at $100 which is now worth $80, and put up the money rather than take the $20 per share loss. However, the covered call owner has likely researched the stock, has determined it to be undervalued and intends on owning this stock anyways. The put seller doesn’t want to own this stock, instead expects the stock to remain neutral, and just wants to collect the $500. If the covered call owner was wrong, that means the stock goes lower than he expects, however that doesn’t mean that the stock still wouldn’t be undervalued even more so. If the put seller is wrong, the put seller will have to buy 100 shares of an $80 stock at $100. It may just seem like semantics, but the covered call owner already has bought the stock where as the put seller may not really believe he has to buy the stock. A put seller gets paid to buy the stock at a set price, where the covered caller gets paid to own the stock. Psychologically, it’s a lot easier for a put seller to say “well I’m a good investor I think, my bet is probably right, I don’t need to worry about the fact that the stock might drop in value because I don’t think it will. I don’t need to do more research, and oh, by the way, this extra $10,000 on the side, I can invest it elsewhere because I’m a good investor, and I’m not going to lose. An over confident put seller can lose everything in the account and then some with even a drop from $100 to $80, where as a covered call owner who is over confident will probably only lose a maximum of the amount he owns in that individual stock minus the price of the stock, and that’s if the stock goes to all the way to zero.

In many ways they are a similar strategy betting a stock won’t go up beyond a certain point, and that it won’t go down beyond a certain point. But a person who writes a covered call will be forced to have the money to pay for it and on maximum in a margin account that person can only go on 2:1 margin. If a covered call buyer with $10,000 risked $20,000 they might need to transfer some money from their bank to their stock account and come up with $10,000

If someone sells puts, they are not technically on margin until a major loss occurs, however, if they sell 10 covered calls of a stock at $100 at $500 each, they risk losing $100,000 if it goes to zero. Put sellers most likely think that has a low probability of happening. Covered callers may think the same thing is true, the difference is, covered callers can never bet more than twice what they have even on margin, and most people won’t go on margin anyways simply because they don’t have the account set up to. Put sellers will usually HAVE to have a margin account to sell puts.

Selling puts requires a more sophisticated understanding as well, and when lost in the technical, I believe it’s easier to forget about what you are betting on happening. If you sell an out of the money covered call, you are betting on it going down less than what you received for the option, or going up to the strike price (or higher, but gain is capped). If you already own a stock, it’s easier to understand that you are trading upside potential for income, where as put sellers are risking money they don’t have committing to buying a stock at a certain price no matter what betting that a stock will do the same thing essentially. But leveraged buyers and sellers are generally not the type that likes to have money on the sideline.

Naked call seller as are collecting income but if the stock goes up, they have unlimited risk since they do not own the stock that will cover them in case the stock goes higher. Selling a naked call could potentially result in unlimited margin. However in order for a stock to go unlimited gains, it has to have an unlimited amount of money put into it. This does not happen, especially to the largest of large cap stocks that are already heavily owned on heavily leveraged companies… However, large amounts of cash reserves still are needed, as large caps still appreciate in value, sometimes significantly. Being un-hedged and selling any sort of shares “naked” is not recommended. In theory there may be an identical hedged strategy, but in practice it just doesn’t work out the same way.

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The Right prediction is the stepping-stone for any stock trading enthusiast-it makes or breaks a stock trader. However, you have many tested options to gather the required predictions.

If you are a long- term investor in stock trading, then it is advisable that you seek predictions from the experts. You can find prediction experts on the Internet, television, making predictions of the stock market for different span of time ranging from a week to a year. On the other hand, the general trend for short-term investors is to engage in other prediction tools that cater to their personal needs in stock trading.

Predictions for stock trading can be categorized into four generalized areas namely Technical Analysis, Fundamental Analysis, Software training and momentum.

*Technical Analysis-this area uses charts and trends as tools. This method predicts the price of a stock by determining the levels of resistance and support. The chart usually contains high points, low points, special formulas, and calculations relating to previous lows, highs, and volumes. In this system, directors, news, dividends of a particular company are not considered as indicators. It is facts and figures that count.

*Fundamental Analysis-under this system the entire aspect of the company in question, is taken into careful consideration. Data relating to the company including shareholders, directors, services, products, and news are analyzed. This system allows predictions on the movement of stock for a given time frame.

*Technology-this system usually makes use of trading software. Depending on the type of software, both technical and fundamental analysis can be performed. The software performs a data analysis using data pertaining to previous prices, trends, and movements to predict the future price of a particular stock.

*Momentum-regulars in stock trade usually use this method. The system involves analysis of two lists of buying and selling orders during the same hours of the stock market. The movement of a particular stock is determined by analyzing the buying and selling orders, volume, and price. This method involves rapid actions to accommodate the sudden changes that usually occur in stock prices.

Predictions can be made in regards to how the stock market will go at a given time and facilitate the trading of stocks in these ways. If predictions are done correctly, they can take you in the right direction. However, you have to remember that these are not foolproof indicators.

Summary:

For a stock trading enthusiast his best bet is predictions. Predictions, if right, can make a successful stock trader. There are four methods of predictions namely technical analysis, fundamental analysis, technology, and momentum. This article gives a brief insight into these four areas that are key to successful stock trading.

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I am in a keeper league with contracts and all sorts of funking rules. You get $23 to spend on 25 players all from the NL. It is an auction based league. I am in dead last and have no way of making up enough ground to get back into it.

Also, you can't just drop players when ever you feel like it. One, there are no players on the waivers. This is a 9 team league and everyone get 25 players plus 10 reserve players (bench) = 315 players. So even If I wanted to drop my crappy players, I'm pretty much stuck with them.

I do however have some high $ players that I would like to get rid of for low $ promising players. For instance, I have Carlos Zambrano, Teixiera, Kelly Johnson, Francouer, Oliver Perez, Brett Myers and Franisco Cordero.

I was just offered: Max Scherzer and a 3rd round Farm-system pick for Zambrano. I like the deal, but I want another player. So this is what I want. Scherzer, 3rd round Farm pick and Will Inman.

What should I do?

i think the first deal is good enough to do. Carlos is a monster

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we now see how corp greed has clearly taken advantage of ouyr system with the future trading of oil. Yet another example of how capitalistic society can become greedy without some kind of supervision then eventually kill the economy. Comlete opposite of a labor union but with the same result.
Could Obama be good for our country?
Easy guys, I premised it by saying "I can't believe" But wait until the Dems get out of bed to give their response. I figure around noon.

No. You clearly have it all wrong. You are seeing evil that does not exist. There is no such thing as corporate greed. US businesses are so overloaded with government regulation, they have to move to other countries to survive.
Government creates the problems in our society. It does not cure anything.
Oil speculation is an international phenomenon. It is as simple as selling something on EBay. The seller says I have a billion barrels of oil to sell. The high bidder gets the oil. That is basic economics.
People who look to government to solve problems are really being naive.

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Seventy-seven years ago, members of Congress erected a tariff wall aimed at protecting American business concerns. The result was a stock market crash followed by drastic retaliatory tariffs and a shutdown of the global trading system. The 1932 Revenue Act made matters worse by massively raising marginal tax rates on domestic incomes. These blunders set the stage for the Depression and world war that followed.

Current members of Congress appear to have let their history books collect dust: A raft of anti-China currency and tariff legislation is now widely supported by both political parties as the exigencies of political grandstanding subvert the ideals of sound policy. At the same time, Chinese government officials have threatened to dump some of the government’s $1 trillion in U.S. Treasury securities if Congress continues its currency bashing and tariff threats.

This fiscal folly couldn’t come at a worse time. Financial markets have been reeling over the last several weeks as hedge funds deleverage from wrong-way bets on mortgage products. It certainly doesn’t help matters that a tone-deaf Congress, led by a bi-partisan coalition of the economically obtuse, is attempting to advance legislation that would raise tax rates on investment companies as part of a “fix” for the alternative minimum tax (AMT).

Has anyone in Congress ever stopped to contemplate why London has once again become the financial capital of the world? Perhaps it has something to do with the fact that the rest of the world is lowering corporate tax rates and trying to moderate regulations while the U.S. is stuffing Sarbanes-Oxley down the throat of its businesses.

If that weren’t bad enough, the 2001-03 tax cuts on incomes and capital are essentially on the chopping block, set to expire in several years time unless Congress and the president act to extend them. The current Congress isn’t disposed to extending the tax cuts, while online futures trading points to a Democrat sweep in 2008. In other words, there’s a high probability that tax rates are going up.

Some politicians argue that the current anti-trade sentiment has been driven by wage inequality and poor income growth, “tax cuts for the rich,” and high energy and food prices for the poor. But the data refute this. Personal income has grown at an average pace of 6.2 percent since 2004, despite large swings in reported GDP growth; personal income is up 6.1 percent year-over-year as of June, right in line with the average of the last few years. And thanks to a low unemployment rate and a tight labor market, real non-supervisory wages are growing faster today than they were at this stage of the last cycle (1.6 percent vs. 1.3 percent, year-over-year).

In fact, low-end (non-supervisory) real wages have grown at about twice the pace for this cycle compared to the first 23 quarters of the last expansion. A broader measure of real non-financial compensation per hour also shows superior wage growth during this cycle (1 percent per annum average vs. a 0.3 percent per annum average at this stage of the last cycle). So to call this a “wage-less” expansion is utter nonsense, despite the fact real GDP growth has averaged 2.7 percent per annum this cycle versus a superior 3.3 percent average at this stage of the last cycle.

Attention protectionist stooges: Since the implementation of NAFTA in 1994, real non-supervisory wages have grown at an average pace of 1.2 percent per annum, triple the 1971-2007 average of 0.4 percent per annum. Inflation-adjusted household net worth has jumped $22.2 trillion since NAFTA was implemented while non-farm payrolls have increased by 24.9 million. Manufacturing output, far from falling, actually stands at a record high, and is up 62 percent since 1994.

Undoubtedly some have been left behind by the global economy. But free trade, China, and Wal-Mart for that matter have dramatically increased the standard of living for most people, just as protectionism, a trade war, tax hikes on investment and work, and the absence of Wal-Mart would sink living standards for most people.

While the global boom continues on the back of pro-growth policies around the world, Congress is speeding down the road to ruin with trade protectionism and a raft of untimely tax hikes. It’s time to take a detour and think about the hugely anti-growth consequences of turning our backs on the global economy and pro-growth tax policy.

Let me ask you this…do you favor tainted tooth paste, lead paint on childrens' toys, harmful chemicals in animal feed and in people food? Something has to be done to regulate what China is sending us. Nice rant without evidence cited but nice rant anyway. Dismissed.

One final question for you…Have you enlightened Congress to these facts? If not, perhaps you should. Perhaps they can learn from your great (yeah right!) wisdom.

Complaining to us on YA will do nothing. You need to write letters to the editor, to Congressional reps and even to some of the radio talk show hosts to get your point across. Otherwise you are merely blowing smoke. Your money and your mouth remain separated.

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