Greed and Fear

As you know, the US main brokers (Ameritrade, Fidelity, Charles Schwab, eTrade) are now offering zero-commission in stocks, ETFs and options trading. A piece of great news, by far the best this year for retail traders.  It's a great opportunity to start trading options more aggressively, creating an options-based portfolio as now commissions are no longer cutting our profits. I share here some suggestions for taking advantage of the power of options during trading.


1. Options as a substitute for Stocks: Delta > 0.80
Substituting stocks with options has two unique advantages: only options bring leverage and protection.

- Options provide tremendous financial leverage to users when they are used in a conservative way: you can control the same amount of shares with less money, and mainly, the % returns are much higher when you trade with options. This carries another advantage: with more money available you can diversify better your portfolio.

- And provide protection: with the ap…

The year 2020 begins and investors and traders are designing the best asset allocation for their portfolios. And they ask ourselves the usual questions: how will this year comes and what surprises will it bring? What will be the performance of the global economy, today in deceleration with central banks resorting to declines in i-rate and debt issuance? Will the anticipated recession, due to inversion of the yield curve since 2018, finally will occur or seems the US its avoiding it? Will its manufacturing indices fall further and will consumption continue to be the mainstay of its economy? Will the impressive growth of the US exchanges continue or the correction finally come after 10 years of an incredible bullish rally? Will there really be a "Phase 2" in the Trade War? And the Brexit? Many questions and the experts are divided. Whatever the new year has in store, you've got options for investing in 2020 that promise a positive return.

This 2020 I will look for defensiv…