Looking at my current watchlist, I see all kinds of trade ideas for the current quarter. Companies report at different times, but when it’s time for reports to come in, they all seem to hit at once. Earnings time is when companies either hit or miss the mark. If you’re a day trader, you know that sometimes those trades earmarked for a quick sale can sometimes end up being swing trades.
Swing trades can even be held for longer than a quarter, but earnings time is always just around the corner. Even less volatile stocks end up swinging one way or the other. Do you trade options as well? There are all kinds of trade ideas when options come into play.
One of my favorite trade ideas involves writing covered calls for stocks I truly want to buy and hold. Take for instance NWL, which is selling for $20 a share right now. There is a big chance it could start climbing towards $30 in the coming months. Yet I would be comfortable buying 100 shares and then writing a covered call for a $30 strike price in one year. I would collect the premium, realize any gains over the year up to $30 and of course still get the dividends for four quarters.
The stock market, in general, has been volatile as of late, and it makes the options market look like the way to go. You can make money with stock options if you know what you’re doing. Of course, it takes more than just knowing what you’re doing. You do essentially win some and lose some. I would diversify with your options just like you do with stocks in general.
I would sell some puts and calls, all for different lengths of time and for different securities. Forget buying puts and calls. There are a time and a place, but if I purchase anything, I’m purchasing shares. That’s at least how I feel about it right now. I have purchased a call before, but I am just not in the business of doing so.
Those are my current suggestions for trade ideas. What do you think based on what the market looks like today? There are all kinds of great ideas, and you will see that many securities have hit 52-week lows. That doesn’t mean they are going to go up, but you catch my drift.