Facebook Calendar Spread Offers Attractive Risk-Reward Ratio In Options Trading

[Option Beast]( 05/15/2021   |   [View in browser]( --------------------------------------------------------------- [Facebook Calendar Spread Offers Attractive Risk-Reward Ratio In Options Trading]( In the world of options trading, do you know how to set up a calendar spread? This income-generating trade involves selling a short-term option and buying a longer-term option with the same strike price. Usually you do this with monthly options, but it can also be done with weekly options. Traders typically use call options unless the trade has a bearish bias. In this case, they would use puts. In today's example, we'll look at a calendar spread trade on Facebook (FB). With Facebook stock closing Tuesday's trading around 306, setting up a calendar spread at 310 gives the trade a neutral to slightly bullish outlook. Ahead of Wednesday's sharp market sell-off, selling the June 4 call option with a strike price of 310 would have generated around $750 in premium and buying the June 18 call at 310 would have cost around $980. That results in a net cost for the trade of $230 per spread. In other words, that is the most the trade can lose. The estimated maximum profit is $500, but that could vary depending on changes in implied volatility. [More...]( SPONSORED CONTENT [Can Your Nest Egg Survive A 89% Market Crash?]( The stock market crashed 89% back in 1929... and it can happen again. But options give you the potential to go after profit even when the market crashes. Getting started is simple. [Click here get your absolutely FREE options trading guide for more details.]( [REFLECTIONS... The Wavering Indices by David Sager](#) Barron's at 100: As the stock market approaches Barron's 100th anniversary, with the Dow and the S&P 500 at record highs, while the Nasdaq is less than 3% from its peak, despite three straight losing weeks, the markets have surged on as this historic financial publication has dutifully monitored the indices. Barron's 100 years encompasses what has been called the American Century, during which the United Kingdom was supplanted as the world's great power.. Two world wars dissipated the 'U.K.'s' wealth, and its empire faded with the end of colonialism. Does America face similar prospects, challenged by China, economically and politically? The West won the Cold War against the Soviet Union , which was a military superpower. However, Russia and other former Soviet states--along with additional third-world economies--remain mostly dependent on the export of raw materials. China in contrast, is a fast-growing economic and military superpower, a force to behold. America has coped through a series of financial crises by taking on more debt, printing more money, made possible because our liabilities are the world's best assets, and that's the case because American economic and political strength have reigned this past century. History does suggest that those may be subject to change... Just when the stock market seems like it's starting to make sense, it back tracks, slightly. Reacting to Froiday's payrolls report which was a massive disappointment. All week, the Dow Jones Industrial Average had been treading upward, beating the Nasdaq Composite, suggesting that investors had finally gotten behind the notion that the economy was really firming a base, and ready to give hope that the market's cheapest value stocks would launch. Instead, the jobs report hit, noting that 266,000 jobs were added in April, well below economic forecasts for about a million, making it the biggest miss on record. What's more , March's number was reduced to 770,000 from 916,000. If the numbers are correct , they suggest the U.S. econom\y isn't nearly as strong as many observers suspect it is. As the week unfolded the Dow closed up 903 points or 2.7% to 34,777 and the S&P rose to 4232, or 1.2%, both record highs for the week. All the while the tech heavy Nasdaq slumped to a negative low, not recovering. The bigger swings of the techs were swinging lower, thus the average ended at 13,752, dropping 1.51%. Copper prices climbed to record highs for the first time in more than a decade Friday, fueled by bets on a U.S.-led global economic rebound that would boost demand for metals used in manufacturing and construction. Copper futures on CME Group's Comex in New York rose 3.2% to $4.75 a pound, eclipsing their previous peak just below $4.63 from early in 2011. Interestingly on the London Metal Exchange, copper to be delivered in the three months rose to $10,417 a metric ton surpassing its previous all-time closing high of $10,160 from February 2011. Prices for these base metals, such as copper and aluminum have marched higher since tumbling at the onset of the pandemic early 2020. Demand for goods among consumers unable to spend money on travel or meals out, disruption at South American mines due to Covid-19 and difficulties shipping material around the world have all contributed to the massive rally. Goldman Sachs analysts say, there is "no decarbonization without copper," which they call "the new oil." Nicholas Snowdon, analyst with Goldman, sees copper now around $4.50 a pound, hitting $6.80 by 2025. Bank of America analyst Michael Widmer is even more optimistic with a prediction of $6.00 this year. With copper potentially in a 'long bull' market, there still is time for investors to get aboard. Dogecoin.....A Joke No More.....Dogecoin has soared to 68 cents Wednesday, not bad (57 cents, 5-9-2021) after starting the year at less than a penny, now worth a staggering $81 billion. Founded as a joke in 2013, Dogecoin, unlike Bitcoin, has no supply cap, so it is no inflation hedge. And while a few retailers accept Dogecoin, it lacks Bitcoin's mainstream appeal, and presently is not a factor in commerce. What Dogecoin does have is a big community of followers probably in the millions, and some colorful 'big guys' the likes of Elon Musk and Mark Cuban who both playfully buy and sell cryptocurrency mentioned above. "The social aspect of crypto is meaningful," writes Matt Hougan, chief investment officer of Bitwise Asset Management in an email to Barron's. "(It's) the first money native to the internet, and it's not surprising some of the common features of the internet are part of its story, including online communities, viral growth, etc." "Investors who came of age before the internet may view online "assets'' as worth less. Those who grew up spending real money to buy a videogame sword are more comfortable with it, says Avi Salzman, writer, Barron's. RUMBLINGS ON THE STREET Rick Rieder, BlackRock's fixed-income chief on Treasury Secretary Janet Yellon's warnings about the economy overheating, Barron's "Listen, every client call I'm on, including the one I just finished...is talking about overheating." Joey Montoya, a crypto enthusiast and an audio engineering student in Arizona, WSJ "The more people that adopt the currency and the more people that are using it, the more valuable it is, and that's why it's not too late," he said. "I call it a digital gold rush, basically, of people adopting cryptocurrency." Christopher Harvey, U.S. equity strategist at Wells Fargo Securities, Barron's "It is the first time in about a decade that value is expected to offer more growth than growth. Paying that kind of a premium might make sense if growth stocks were, you know, expected to grow faster than value. Not anymore. When growth is abundant, you don't pay a premium for it," Harvey says, "jobs disappointment or no jobs disappointment." Wenyu Yao, senior commodity strategist at ING Group, WSJ "The risk that inflation could be more persistent: that is pushing some investors to buy commodities particularly as real assets, as an inflation hedge." [Cathie Wood Goes Bargain Hunting: 3 Stocks She Just Bought]( The last couple of months haven't been kind to last year's star money manager. Ark Invest's Cathie Wood is seeing her high-octane exchange-traded funds (ETFs) get hit as investors rotate out of last year's darling growth stocks. Wood isn't ready to give up the fight. She added to some of her hardest hit investments on Wednesday, picking up more shares of DraftKings (NASDAQ:DKNG), Coinbase (NASDAQ:COIN), and Zoom Video Communications (NASDAQ:ZM). Let's see why she may be on to something with all three stocks. [Article continues...]( [Always Anxious About Money? Here Are 3 Strategies To Cope, From A Psychotherapist]( From worries about job security during the pandemic to managing crippling student loans, young people face many stressors when it comes to money. "Anxiety is really meant to bring our attention to something, because humans are wired to survive," Amanda Clayman, a mental health clinician who specializes in money issues, tells CNBC Make It. However, "anxiety can get attached to a lot of things, especially related to money." Financial anxiety is more severe than just worrying about having enough money in your bank account. It manifests similarly to the symptoms of generalized anxiety disorder, such as tension, worried thoughts and irritability. People might avoid checking their finances, imagine scenarios where they don't have enough money, get hypervigilant about tracking their money or obsess over saving, Clayman says. Here are some strategies from reframing your relationship to money, to developing a money "practice" that can help you cope, according to Clayman. [Click to continue reading this article...]( [3 Simple Moves to Shift Your Retirement Savings Into Overdrive]( Retirement ticks closer every day, yet your nest egg barely seems to grow. Sound familiar? You're definitely not the only one. Shoveling money into a retirement account isn't always enough to get you where you want to go. You also need the right strategies to help you make the most of that money. Here are three simple tips that can help you take your retirement savings to the next level. [More here...]( SPONSORED CONTENT [Do You Have Zero Experience Trading?]( Quick!....get this free e-book that was designed to teach beginners how to trade options while you still can. Want to start trading with a small account? Got you covered on that also. Chuck Hughes has taught thousands of beginners how to be successful in trading. [Click here to get the e-book while you still can.]( --------------------------------------------------------------- [Option Beast]( Send this to a Friend. [Click here.]( | Not a Subscriber Yet? [Click here.]( All content © 2021 Option Beast Neptune Ave, 300 Main Street #711, Madison, NJ 07940 USA Welcome to Option Beast, an e-mail service that replaces many of our previous alerts. We hope you enjoy it. If you do not wish to receive this email service, please [click here to unsubscribe](. [Privacy Policy]( --------------------------------------------------------------- © Copyright 2021 Option Beast, All rights reserved. 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