To The Moon

Relations between the USA and China have grown increasingly more tense. China’s economy is in trouble. The Chinese communist party is cracking down on private businesses there. And Apple is in their sights. We have long been concerned about what happens to Apple when China decides to punish the company as part of their economic and strategic fight against the US. The most recent chapter in this story is that China is not letting government workers bring their iPhones to work much like the US has banned Tic Toc from the phones of US government workers. Apple’s stock took a big hit. Has Apple’s day of reckoning arrived? FREE: Get Our Daily SITREP (Situation Report) Newsletter

Over the short term markets are driven by the sentiment of those buying and selling. Over the long term the markets are driven by fundamentals such as quarterly profits, interest rates, and events both domestic and foreign. Long term investors generally do very well by determining the intrinsic value of a stock. They will ideally buy the stock in a depressed market or use an approach like dollar cost averaging to avoid always buying at market peak prices. Either way they tend to make handsome profits over time. Thus the time frame for investing in fundamentals is five years, ten years, or longer. Fundamentals are important for those who trade options as well. However the time frame for trading fundamentals is not the same as for long term investing.The Market Only Cares When It CaresW

If a trader wants to make money trading options they need a way to determine if prices are doing up, down, or sideways. The strategies that you choose and the degree to which you hedge your risk in trading options will be based on what you think the market will do and how certain your are that it will do what you think. There are two basic ways to predict where the stock market will move next. Over the long term stocks go up and down based on how much money companies make. This is determined by fundamental factors like the company’s business plan, the economy, interest rates, and even events far from our shores like social unrest or even war. Newsletter: Our Less-Than-10-Minute Video Overview of Today’s Market Activity<

An item in the financial news caught our eye the other day. Warren Buffett appears to be expecting a recession. How do we know that? He is rotating parts of his massive Berkshire Hathaway portfolio into consumer defensive stocks. At Top Gun Options we trade options. We are able to turn on a dime and change our trading strategies as needed. So, why are we interested in consumer stocks in a recession, what Warren Buffet is up to, or any of that? There are two things to consider here. One is the potential for options trading profits with stocks like McDonalds, Procter & Gamble, or Coca Cola as their share prices rise going into a recession. The other is in line with our DRINC approach to paying attention to what is going on in the world. Many times things that would not appear to be relat

Here at Top Gun Options we always emphasize that you need to pay attention to what is happening across the country and the world and how it may affect your trading of options. The most recent huge examples were the Covid-19 pandemic with the resulting crash and recovery, the worst inflation in four decades with the subsequent raising of interest rates by the Federal Reserve, and the Russian invasion of Ukraine with all of its fallout. When you pay attention to the news about what is going on in the world beware of the risks involved in news propaganda and your trading! Free Video Training - Why Diversifying Isn’t as Important as You Thought

There are times when the market gets ready to fall off of the earth. We typically suggest that you get long volatility, buy puts on the S&P 500, or go pop some popcorn, go for a walk, or get into cash and don’t trade anything. There is a time when not to trade options. It is when you have no good idea where stocks or the economy are going. When the market is crazy is not the time to guess. It is a great time to trade with a dedicated squadron like at Top Gun Options where we called the Covid crash to the day and printed money for the next month while the “smart money” kept saying to “buy the dip.” But if you did not know how to trade in that situation you lost your shirt. Free Video Training - Why Diversifying Isn’t as Impor

Anyone who pays attention to our trading here at Top Gun Options can see that we use a handful of strategies again and again. This may seem repetitive. What is, in fact, repetitive is that we repeatedly profit from using these strategies. For example, we use a lot of credit spreads. It is not that we don’t know any more strategies. Rather these approaches to trading options work to create profits again and again. They hedge risk, which we do on every single trade. Options strategies never get old or wear out. You can use a few of them again and again to profit from trading options. Video Shows Why Diversifying Isn’t as Important as You Thought<

Investors are fleeing Chinese stocks like rats leaving a sinking ship. China’s population is aging and even shrinking at bit. Their real estate sector is in trouble. Their public and private debt burdens are huge and growing. And the US and its allies have finally woken up to the fact that China represents a significant economic, military, and strategic risk for Western democracies. Thus, the US and others are cutting China off from high tech computer technology as well as investment capital. However, there are always options trading opportunities as Chinese stocks plunge.Why Are FXI Shares Falling?Foreign funds that invest in Chinese stocks have been selling at a pace not seen in seven years. Outflows in the range of $200 million a day have gone on now for 9 days. The sentiment

There are more than four hundred possible options trading strategies. Do you need to know them all? Keeping your options trading simple is generally a good idea. This is especially important for beginners. A trader may think that they will be missing out on potential profits if they limit the number of strategies they routinely employ. However, there are only three directions that the market can go. It can go up. It can go down. And it can trade sideways. There are more strategies available for the trader for each of possibilities than they could reasonably use. So, how many options strategies does a beginner need?Video Shows Why Diversifying Isn’t as Important as You ThoughtWhat Levels of Options Will Your Broke

In the world of options trading a credit spread is a strategy in which the trader buys and sells options on the same stock (both calls or both puts) with the same expiration date but at different strike prices. The strike prices chosen are such that the premium received for selling a call or a put is greater than the premium paid for buying the other call or put. Thus the trade begins with a credit. Common credit spreads are the bull put spread and bear call spread.Video Shows Why Diversifying Isn’t as Important as You ThoughtCredit Spread for a Rising Stock PriceIf a trader expects a moderate price increase for a stock, an appropriate credit spread is the bull put spread. This approach uses put options, one