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Michael Thomsett

Options Books

By Michael C. ThomsettMay 1, 2012

I invite everyone to check out my options books ... these are written to provide useful education and strategic information on  a range of strategies.

Michael Thomsett

Options -- Covered Call Total Return

By Michael C. ThomsettApr 25, 2012

How do you calculate returns from writing covered calls? At first glance, this seems like an easy question; return is return, right? But in fact, calculating return can be done in several different ways.

Michael Thomsett

Complex Strategies Are Not Always Better Strategies

By Michael C. ThomsettApr 23, 2012

Even the most experienced option trader can benefit with an occasional reminder: The most basic strategies often are the best, all depending on the situation and what you hope to accomplish with the option position.

Michael Thomsett

Option Speculations -- The New Bad Guys?

By Michael C. ThomsettApr 19, 2012

The president has identified "speculation" as the cause for high oil prices. But as an economic observation (and not a political one) I challenge anyone to explain how that works.

Michael Thomsett

Options Trading: The Question of Suitability

By Michael C. ThomsettApr 18, 2012

Anyone interested in trading options has to be qualified by their broker to trade. This demands a separate options agreement in which you have to state your experience and knowledge.

Michael Thomsett

Options: The Call Bear Spread - Worthwhile or Not?

By Michael C. ThomsettApr 16, 2012

The call bear spread is a two-part strategy best used when you believe the underlying price will decline. It consists of a long call plus a lower-strike short call.

Michael Thomsett

Options Trading: Know Your Tax Risks

By Michael C. ThomsettApr 4, 2012

Options are odd devices in many ways; but one potential risk many traders are completely unaware of is the tax risk involved. Taxation for options is complicated and illogical in many respects. Know where you stand before closing out positions to avoid having an unpleasant tax surprise.

Michael Thomsett

Options Trading - Ultimate Leverage with Synthetics

By Michael C. ThomsettMar 26, 2012

The two major synthetics -- long stock and short stock -- involve options but mirror price movement in 100 shares of stock. These may reduce market risks while setting up positions with zero cost - the best leverage of all.

Michael Thomsett

4 Ways to Create Conservative Options Trading

By Michael C. ThomsettMar 22, 2012

Options traders are always hungry for new, valuable sources for information. If you are a conservative investor who wants to learn how to create appropriate trades within your risk profile, and how to use options as a portfolio management tool, here are four suggestions for you:

Michael Thomsett

Options Trading: Timing Short-Term Trades

By Michael C. ThomsettMar 22, 2012

Market risk exists whether you own shares of stock or use options to anticipate market-wide movement. In that sense, options are not higher-risk than stocks. In fact, because one option lets you control 100 shares of stock, they are far less risky. If you can benefit from stock price movement for about 5% of the cost of those shares, your risks are lower.

Michael Thomsett

5 Powerful Ways to Swing Trade with Options

By Michael C. ThomsettMar 20, 2012

Most “swing traders” -- those moving in and out of positions in two- to five-day short-term price swings -- use shares of stock for their strategy. But options can vastly expand your swing trading program with less risk and greater leverage. Here are five ways this can work for you.

Michael Thomsett

4 Ways to Turn High-Risk Naked Options Strategies into Low-Risk Ones

By Michael C. ThomsettMar 16, 2012

We have always viewed specific option strategies in terms of risk. Naked contracts, for example, are high-risk. Even basic long options are high-risk because most of them expire, right? Not always. Here is a new and expanded way to look at risk, even for those strategies widely believed to always be high-risk.

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