Blog > Featuring... > Options investing: Playing the mother-in-law effect
Share this article:
  • Print
  • Digg
  • del.icio.us
  • Facebook
  • Google Bookmarks
  • NewsVine
  • StumbleUpon
  • Twitter

Options investing: Playing the mother-in-law effect

Today's Financial News - Posted October 30, 2009

housewife on the phoneThe equities market is getting dangerously volatile. That means it is time to take advantage of the options market. The profit potential is increasing by the minute.

By Andrew Snyder, TodaysFinancialNews.com

Baltimore – (TFN): I am dreading next week. Not because my “evil” mother-in-law is coming to town. She’s far from the kind of dreaded in-law that create sudden desires to move overseas and change the lock on the front door every few weeks.

I’m dreading the coming days because when my mother-in-law enters our front door, women will become a super-majority in a once evenly divided home.

They will have control of the dinner menu, control over my schedule and, worst of all, control over the remote.

I can only imagine the scene when we decide to go out for a nice dinner. There I will be, sitting in the driver’s seat of the car, gently tapping my thumb against the steering wheel, while Vote Number One and Vote Number Two decide what to wear.

Just as one of them prances down the front steps, appearing to have come to a final decision, she’ll turn around and shoot right back through the front door. Four hundred or so thumb taps later, she’ll reappear in an entirely different outfit.

If you think about it, the market is not much different these days. It’s as fickle as a seventeen-year-old getting ready for prom.

We are all waiting for the final result, some of us less patiently than others.

Better shot at scoring than prom night

We could be patient and wait for the markets to naturally appreciate, although it could be another decade until we reach previous highs.

Or, better yet, we can do something not possible when the mother-in-law is in town… put our foot down and take action.

The options market offers fantastic opportunities in a choppy market like this one. Just look at the CBOE Volatility Index (VIX), a key measure of option price spreads. After hitting a fresh 52-week low last week, the “fear gauge” has surged ahead.

It means options investors are getting rich. As the VIX rises, it shows that demand for options is increasing. This week, as investors look to hedge against further downside, demand is soaring.

That is good news for those of us sitting on a portfolio filled with strategically chosen contracts.

Over at TFN Strategic Trader, the group’s options-trading service, a wishy-washy market is anything but bad. These day-to-day surges create incredible buying opportunities.

Just last week, I recommended three ways to play the natural gas industry. Two of the three picks soared this week to gains of over 150%. The third was up by double-digit proportions the last time I checked.

Our lone retail-related pick doubled in value this morning after the underlying stock moved ahead by just 5%.

As much as I know the week’s negative action has hurt many investors, I don’t want it to stop. It is flat-out powerfully lucrative to options investors.

If you are not hedging your portfolio with the powerful investing tools, do it now. It may by your only shot at profits over the next few months.


Next Article: Crocs: What to do when ugly goes out of fashion

Posted by Andrew Snyder · Filed Under Featuring..., Options 

Share this article:
  • Print
  • Digg
  • del.icio.us
  • Facebook
  • Google Bookmarks
  • NewsVine
  • StumbleUpon
  • Twitter

 Add to Technorati Favorites | Follow Us on Twitter!

Be the first to leave a reply.

Your comments are welcome