The Advisors Option

Listener Mail: Listener questions and comments Question from Kevin Duggan. Regarding no cost collars with long put LEAPS and short term call writes. How do you manage them when the stock drops? Then the calls. I want to write have little premium since they're now way OTM and, I don't want to lock in a loss by getting assigned at a lower strike than I paid for the stock. So a question for Randy sin...

Options 101: Many clients are sitting on gains in their portfolios right now and are rightfully concerned about protecting them. Selling the assets with gains is a sure bet but eliminates future upside potential. This is an ideal use case for options. Basic hedging strategies: Protective put: the basic defensive play. Put spread: ideal for protecting gains due to limited outlay. Collar: the holy g...

In this episode, Mark and Randy are joined by Joe Cusick, Vice President of Wealth and Asset Management at MoneyBlock. Options 101: "Low VIX" is all over the financial media these days. Which makes it an excellent time to review the relationship between volatility & options. Haven't discussed volatility on the program since Feb 2013 and the VIX products since October 2013 so we'll review the follo...

The Buzz: News out of China: OIC, Shanghai Stock Exchange content licensing agreement. Pensions seek bond diversification. Report: UK pensions miss out on returns. Chuck likes index funds. Retail investors not afraid of equity markets. Low VIX: what does it mean for volatility? Listener Mail: Your comments and questions Question from Neil Staffenberg: thank you for this program. It is very informa...

The Buzz: An overview of the upcoming Options Industry Conference. What topics are discussed at the conference? Who attends? Is there any benefit for advisors? Listener Mail Extravaganza: The Advisors Options mail bag is filling up, so we are going to tackle as many as possible this episode: Question from Neal Santos. I am in the market for a new advisor and your program has awakened me to the ben...

The Buzz: Overview/highlights for advisors from the RMC. Are advisors genuinely interesting in volatility products such as ETN, VIX ETPs, etc.? The one-year anniversary of mini options is upcoming, what's the feedback from this product? What is the panels take on the most recent Goldman-Sachs study? Listener Mail: Stock Replacement Using American-Style Calls Question from Greg S. I am looking for...

Options 101: Straddles & Strangles Straddle: Buy/sell a call and put on the same strike. Long straddles. But be careful of high decay. Flip that around and you have a short straddle. Strangles allow you to benefit from significant underlying with smaller premium outlay compares to straddles. High decay still exist. Flip that around and you have a short strangle. Covered Straddles and Strangles. Li...

Options 101: Mini Options What are mini options? Which underlying stocks? The SEC approved mini options on five underlying securities: Apple Inc. (AAPL), Amazon Inc. (AMZN), Google Inc. (GOOG), SPDR S&P 500 (SPY) exchange-trade fund, and SPDR Gold Shares (GLD) exchange-traded fund. What is the use case? Why would you not want to use mini options? Tricks of the Trade: The Right Skill Set Today we w...

Advisors Option: Year in Review Options 101: A Year in Review Options in Lieu of the Underlying Stock Replacement Strategy Stock Repair Strategy "Wheel of Fun" Listener Mail: So, what do you want to know? Question from Charles A. - I have heard it said that you should never exercise an option early. Is that accurate? Are there no scenarios when it would be appropriate? What is the point of paying...

Options 101: The Stock Replacement Strategy Using options in lieu of stock. What is stock replacement? What are the advantages of stock replacement over just owning stock? What are some scenarios where you might want to consider a stock replacement strategy? Jazz up your covered call by using a stock replacement to save money and improve returns. Listener Mail: What do you want to know? Question f...

Options 101: Using VIX options/futures and volatility products as hedges. What is the VIX? How is the VIX calculated? How are VIX options priced? How do the greeks work with VIX options? VIX is not a perfect hedge that offers pure inverse correlation to the S&P. Beware of the VIX settlement process and some of the other issues traders encounter during it. VIX settlement was 10/16 this month. There...

Advisors Option: Stock Repair Options 101: The Stock Repair Strategy Have a downturn in your account? Options can help make that money back. Stock repair strategies are a popular way for many advisors to regain some or all of the losses in a clients' portfolio. When should you use a stock repair strategy? How does it differ from just holding the stock? You can trade calls on a ratio for additional...

Advisors Option: Spreads with Wings Options 101: We have discusses collars and verticals on this show in the past, and now it’s time to explore some of the more elaborate option spreads that many advisors/asset managers may be familiar with - particularly spreads with wings. What is a butterfly? When would an advisor want to use a butterfly spread? What is an iron condor? How does it differ from a...

Options 101: Alternate methods for entering and exiting stock positions using options - aka "The Wheel of Fun." Caveat 1: Short puts are excellent tools for income generation, but most advisors and clients should limit themselves to only writing puts at prices, and on underlyings, that they don't mind owning. Caveat 2: The income generation portion of these trades are extremely volatility-dependen...

Advisors Option: The Problems with Annuities and Structured Products. Tricks of the Trade: The problems with Annuities and Structured Products. Many advisors gravitate toward structured products instead of using options/derivatives in client accounts, but structured products frequently present problems: Accuracy Options Exposure Time Management Expense Evaluate your product. Listener Mail: How may...

Advisor’s Option: Listeners Take Over Listener Mail: It’s all mail, all episode long. Question from Jackson_CFA: What do the hosts think of annuities as a tool for diversification and income generation for risk-averse clients? Question from Alexander Sarsgard, Portland, OR: Just adding puts to your client's portfolios is expensive. What is your favorite methodology for reducing the cost of protect...

The Advisors Option 5: Asset Allocation Tricks of the Trade: The myth/lie of asset allocation. It used to be 20 different underlyings to be fully diversified. Now with increasing correlation, it is closer to 40. Debunking asset allocation as a method of defense. The old style of asset allocation in no longer effective. Absolutely nothing about options, hedging or volatility was discussed at the Mo...

Mark, Mike, and Randy are joined by Alan Grigoletto and Eric Cott from the Options Industry Council. Tricks of the Trade: OIC has issued a new white paper, "Tales from the Front," that looks at the use of options from the advisor point-of-view. Eric and Alan give an overview, the purpose, and some of the findings. Randy and Mike give their perspective as advisors who already use options. Each pers...

Advisor Option: Volatility Options 101: Volatility --What is Vega? --Implied vs. realized volatility. --What is the impact of low vs. high volatility environment on options trading? --Correlation and becoming fully diversified by adding a volatility component to your portfolio. --How do you get volatility exposure? --What is an overlay strategy, and how do you construct one? Misconceptions of the...

Advisors Option: Spreads Options 101: Spreads. What is a spread? Vertical spreads? How do you add spreads to your portfolio? How do spreads affected by the Greeks? Mail Bag: Our hosts answer listener questions. Question from Tony - Glendale, AZ: Thank you for this insightful program! I typed the terms financial planner and options into the iTunes search bar on a whim and was amazed to find the Adv...

Join your co-hosts Mark Longo, founder of the Options Insider, Randy Swan, co-founder of Swan Wealth Advisors, and Mike Cavanaugh from Know Your Options, Inc., as they help advisors navigate their way through the world of options.   Options 101: The ultimate advisor's option strategy: the collar. The group is joined by Alan Grigoletto, director of Education at OIC, to discuss the collar. The group...

Advisors Option Episode 6: Swan Wealth Advisors Mark and Mike are joined by Randy Swan, President of Swan Wealth Advisors. In the Interview Segment , the group discusses: Two words: Risk Management. The major stumbling blocks keeping advisors from using options. How to take the first steps? Should there be more credentials to help people feel more secure with an advisor trading options with their...

The Advisors Option Episode 5: Selling Puts In this episode, Mark is joined by Mike Cavanaugh of Know Your Options Inc., and Option Block Fame. Options 101: Looking at the other end of the spectrum, the Covered Put. Reasons why you, as an advisor, may want to consider selling naked short puts. Less risk than buying a stock outright. Examples with everyone's favorite stock: XYZ. How does KYO use th...

Our exclusive OIC 2012 audio coverage continues with Options Insider Founder Mark S. Longo's compelling panel The Holy Grail of The Options Market. This session explores the tumultuous relationship between financial advisors, asset managers and the options market. What are the major stumbling blocks keeping advisors from adopting options? Why aren't more asset managers using options to hedge their...

Options 101: Covered Calls What is a covered call? When should you use it? Reasons to write covered call Downsides to the covered call Covered call vs. naked short put Interview Segment with Sean Heron Mr. Heron is an Adjunct Finance Professor, CFA, Rutgers University as well as the Senior Investment Manager, Glenmede Trust Company. In this segment, the gang discusses the OIC/Rutgers options progr...