option

Is Natural Gas a Buy?

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Since mid 2008 natural gas has been completely decimated by the market with the past eight months have been particularly bearish, cutting natural gas stocks in half.  Take a look at UNG for instance, down close to 60% from it’s June high of 12.32 a share.  So with natural gas bouncing off it’s all time low is it time to take a bullish stance on the commodity?  Recent options activity has spiked dramatically, with a call to put ratio of more than six to one.  With options activity a good forward looking indicator of investor sentiment, this is generally a very bullish … Read more

How can you buy below the market? Try selling puts below the current price.

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We’ve added this explanation on put writing from the Options Industry Council.  One of our favorite strategies is naked put selling.  We only do this on securities we would be willing to own.  When we can’t find anything to buy at prices we like ( for example the market has risen to new heights), we may sell puts on stocks we would be willing to buy if they fell back to a level we were comfortable with.  If we get put the stock, we are no worse off than had we bought it at that price.  If we don’t’ get … Read more