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Options Trading Education

In the classic SENTIMENT article "The Eternal Contrarian" -- back by popular demand! -- Bernie Schaeffer explains why the investing principles outlined in Humphrey Neill's seminal book, The Art of Contrary Thinking, are just as relevant today as they were back in 1954. Using Google (GOOG) as a case study, Bernie walks readers through the various phases of the sentiment cycle -- from euphoria to despair -- and warns of the potential pitfalls of adopting "a blindly contrarian stance" based on sentiment alone. And, while the lessons of the past may prove their mettle over the years, our founder and CEO also reminds investors why it's so important to consider the ramifications of a changing market environment on tried-and-true contrarian indicators.

Options Trading Strategies

In "Zero to Hero," we've got a sure cure for your crippling case of trader's block. Using this basic, four-step approach -- along with the array of helpful tools available at SchaeffersResearch.com -- just about every investor should be able to rustle up an actionable options idea to break out of that trading rut.

Trading Advice from the Pros

With volatility still dominating the daily action on Wall Street, traders can't be blamed for experiencing occasional bouts of motion sickness. Fortunately, Randy Frederick of the Schwab Center for Financial Research is on the case. In this installment of "Pro Pearls," Frederick offers five prudent tips to help options players manage risk and keep a tight rein on their trades during periods of roller-coaster price action. If you've ever wondered whether you should be hedging with collars or protective puts, this article is required reading.

Also inside this issue of SENTIMENT

Regular features in every issue of SENTIMENT include: The Sentiment Report, our quarterly analysis on a sector of note; the Idea Lab, an examination of technical and sentiment analysis tools; Ask Bernie, with Bernie Schaeffer answering some of the most commonly posed questions by traders; and .COM, featuring the "best of" recent commentaries and blog posts on SchaeffersResearch.com.

Archives:

Fall 2011

Options Trading Education

In the second of his two-part series on technical analysis, "Breaking Down the Level," Bernie Schaeffer brings his trading lessons to life by breaking down two case studies. By utilizing uncommon, "uncrowded" chart levels, Bernie was able to pin down triple-digit winning trades on Green Mountain Coffee Roasters (GMCR) and Lorillard (LO) in a matter of mere weeks.

Summer 2011

Trading on the Level

Most traders are probably already familiar with the merits of technical analysis -- but when you're trading options, nailing the timing of a stock's rebound from support (or rejection from resistance, as the case may be) is a matter of the utmost importance.

Spring 2011

Souping Up the Short Term

It was once thought that the 30-day option was created for a populace of traders with an appetite for risky bets. Now there are “"weeklies",” which, yes, are listed a week before they expire. And they’re gaining popularity. Are they worth the risk?

Winter 2011

Trading the News: A Contrarian View

Sometimes you can get the best trading ideas from the media. But while magazine covers and TV gurus talking about the next gold rush or the end of days may seem anecdotal, when the common view is a crowded one, it pays to fade the trend.

Summer 2010

The Eternal Contrarian

Bernie revisits Humphrey Neill’s iconic The Art of Contrary Thinking and some of its most famous dictums, including that the crowd is right during the trend, but wrong at both ends.

Spring 2010

Money management

Don't put all your eggs in one basket. Sure, it’s a cliché, but like many other clichés, it's also good advice. Still, how much of my trading capital should I commit to a single trade?

Winter 2010

Expiring With Profit

If you think trading during expiration week is dangerous, think again. Not only do opportunities abound, but they can come with very little risk. The trick is knowing exactly what to do when there’s no time to lose.

Fall 2009

The Long Vertical Cure

There are times when directional opportunities abound, but conditions aren’t right for straight calls and puts. The long vertical spread -- also known as a debit spread -- offers a unique alternative to trading your bulls and bears without the risks associated with higher market uncertainty.

Summer 2009

Hunting for Hedges

When you’re bullish on a stock but the market seems to be running on fumes, perhaps it’s time to consider your options—pairs trading with options, that is. And the best part? What you can make when you’re very wrong.

Spring 2009

Are We There Yet?

How do you truly know when a new bull market has started and it’s not just another bear trap? Though the answers may not be obvious, they’re usually right in front of you. You just need to know where to look.