Quickly finding the best option strategies with one click and one tool...
Knowledge is Power. It doesn't matter who said this originally or how many times it has been stated over the course of human history, it still remains a simple fact and an undeniable truth. Knowledge is Power. The more knowledge you can obtain the more advantage you will have over your competitors. The greater your advantage is the more likely you are to be successful and come out on top. This concept is also true in options trading. The more information you can get on the existing options and possible strategies, the better suited you are to make a wise investment. Furthermore, the more information and stock market investment advice you can get your hands on, the more comfortable you will feel making your investment decisions. Be careful though...every investment has risk.
"The safest way to double your money is to fold it over and put it in your pocket."
- Kin Hubbard (1868-1930)
Let's say for example that you either own shares of a stock or that you are interested in maybe purchasing some stock that you have been tracking. In either scenario, you might be a little cautious of your investments because you are unsure of what strategies could be used to protect your new investment from sudden shifts in the market. Whether you are bullish and buying calls or you are bearish and are working with puts, the search Summary tool allows you to view and analyze the possible investing strategies for any particular stock. An advantage of this tool is that it shows possible strategies on the same page allowing you to compare returns and costs of the different strategies.
To access this tool, LogOn to the PowerOptions. At the top of the page, enter a stock/index symbol that you are researching and click the "search summary" link. If you are unsure of the stock symbol for a certain stock, click the blue letters "Symbol lookup" at the top of the page. If you know the stock symbol type the letters into the first box.
The next page that comes up will be a layered spread sheet. Each layer represents a different strategy. They are either Covered Calls, Covered Puts, Collars, Calendar Spreads, Bull-Put Credit Spreads, Bear-Call Credit Spreads, Bull-Call Debit Spreads, Bear-Put Debit Spreads, Long Straddle Spreads, Long Calls or Long Puts. These are the possible strategies that have been calculated to maximize possible profit on the stock that you entered.
Please note that one or two of the strategies might not have any calculated returns with them. You might see a text message under the strategy that reads, "No Results found for this strategy." The reason for this is that the Strategy Search Summary Tool has preset screening filters already in the system. Some examples: Open interest > 5, Option Volume > 0, options only within 2 strikes of current stock price, average broker recommendation is present, etc. If no options examples appear under a certain strategy heading then no options in that strategy met the preset criteria for the search.
Since all of the near-money strategies for your selected stock appear on the same page, you can now compare them against one another to search for which strategy might provide the highest return percentage or the lowest initial investment or is inline with your outlook for the stock.
Also note that on the right hand side of the header bar for each strategy you will see a help section in small blue letters. (Bear-Call Credit Strategy Help, Bull-Put Strategy Help, Covered Call Strategy Help, etc.) If you click these links you will automatically go to the "Investing Strategy Help" menu that is in the Help section. This section defines all of the strategies and runs you through specific examples of a trade in each one.
The descriptive blue text at the top of each column in the strategies works the same as in the other tools. Hold your mouse above the blue text to get the pop up definition window. You can also click the words and you will be taken to the glossary page.
The More Info Buttons next to each option in the spreadsheet (or next to the first option in the spread strategies) will connect you to the full option chain, the calculator tool, and the stock or the option research tools. Just click the blue arrow and you can select which research tool you want to view. You can also use the blue arrow at the top of the page by the stock symbol and the current price box to review the company news, profile and information.
The last item to discuss in this tipsheet is the small blue lettered words above the spreadsheets. These links help you to better research the stock in question. You can check the stock charts, industry lists, opinion indicators, earnings calendars, analyst estimates, cash flow statements, and the scorecard as well as other useful information that can help you view the performance and history of the company. To go to any of these links and recieve further tips on the stock market, simply click the actual words at the top of the page.
The Strategy Search Summary Tool is a useful way to research the different options strategies for a particular stock. An investor is able to compare the differences in initial investments, percent returns, and possible risk in each strategy. Whether you are already in the market and are looking to compare strategies for the upcoming months or you are just looking to get into the market and you want to research the strategies on a certain stock, the Strategy Search Summary Tool can help you research which options strategy might best benefit your investing techniques.
Enter your User ID and password then click the [Log On] button.
At the top of the page, enter a stock or index symbol and click the "search summary" link.
You can change the expiration month and strategies that are included in the report if you wish. If you make any date or strategy changes, click the [Submit] button.
In order to view the companies information, news, or financial status you can use either the blue arrows on the sides of the option row or the large blue arrow at the top of the page. You can also select the individual information links at the top of the page by clicking the words written in the small blue font that are underneath the stock symbol box and the month selection box.
Once you have viewed the strategies for the stock you selected you can simply go back to the top and search strategies in another month or select a new stock entirely. To select a new month simply go to the month selection box and change the setting. To enter a new symbol just click in the symbol box, erase the previous symbol and type in the new one.