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Basic Strategies for Big Profits in Any Market
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Not surprisingly the post-election market wiggles continued last week as many stocks and sectors continued to show strength, while others got hit hard. By week’s end the three leading indexes had all lost ground as the S&P 500 fell 2.3%, the Dow declined by 1.7%, and the Nasdaq lost 3.65%.

The election results and Federal Reserve rate cut were seemingly just what the market was looking for as the S&P 500 rallied 4.7% last week, the Dow added 4.65% and the Nasdaq gained 5.4%.
Before I dive into my election preview, I first wanted to address Palantir (PLTR) earnings as the company will report its quarterly results today after the close.
Ahead of a monster week of economic data and earnings releases the S&P 500 fell 0.85%, the Dow lost 2.6%, and the Nasdaq gained 0.4%
Another week, another all-time high for the S&P 500 and Dow, while the Nasdaq is slowly creeping towards its previous highs. By week’s end the S&P 500 had gained 0.6%, the Dow had rallied 1%, and the Nasdaq had risen marginally.
It was yet another strong week for the market and countless stocks, many of which are breaking out to new highs. At some point the market may cool off, but for now at least, I’m not seeing any truly worrying signs. And in fact, the S&P 500 closed at a new record high as the index gained 1.44% on the week, while the Dow added 1.56%, and the Nasdaq rallied 1.63%.
Despite plenty to worry about in the market including the rising tensions in the Middle East and the short-lived port strike, impressively the S&P 500, Dow and Nasdaq all rose marginally last week.
It was a mostly quiet week for the market, which isn’t terribly surprising as traders have moved past the Federal Reserve event and inch towards the election. By week’s end the S&P 500 had gained 0.4%, the Dow had rallied 0.5% and the Nasdaq had fallen 0.55%.
As I noted last week, because of family travel this Monday’s update is focused on our open positions. Let’s dive in …
The market bounced back very nicely from the previous week’s losses, ahead of the big Federal Reserve announcement this week. By week’s end the S&P 500 had rallied 3.2%, the Dow added 1.9%, and the Nasdaq rebounded 4.9%.
Led by an awful week for the Semiconductors (down 11%), the S&P 500 fell 3.62% last week, while the Dow lost 2.42%, and the Nasdaq dropped another 5.5%.
Ahead of the long weekend, and the unofficial end of summer for the trading community, it was a mostly quiet and mixed week as the S&P 500 was unchanged, the Dow gained 0.9%, and the Nasdaq fell 0.7%.
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Options Strategy
Options trading has its own vernacular. To know how to do it, you need to know what every options term means. Here are some of the basics.
Want to know how the big institutional investors use options? Here is an example of how one trader spent $132 million on three technology stocks.
This guide will help you execute the three types of options strategies recommended in Cabot Options Trader: Buying puts and calls, covered call writing and spreads.
Guide to Options Trading — Pro Version
Using Options to Hedge a Portfolio


A few Cabot Options Trader subscribers have asked me about ways to protect gains in their portfolios, so I thought I would write to everyone with a couple of strategies using options to hedge your portfolio.

Options Education
From the questions I receive, I’m aware that a decent percentage of my subscribers have stock and/or options positions in a handful of stocks, including Apple (AAPL), Facebook (FB) and Alibaba (BABA).
Worried about another market correction? This bit of options education should help you learn how to hedge your portfolio using puts.
Options education is one of my main goals for Cabot Options Trader subscribers. And here are three important lessons I’ve been telling people lately.
Options education is one of my main goals for Cabot Options Trader subscribers. And here are three important lessons I’ve been telling people lately.
All options are a wasting asset whose time value erodes to zero by expiration. This erosion is known as time decay.
A protective put is used when a trader is bullish on a stock he is buying or already owns, but is wary of the stock’s short-term future. It is used as a means to protect unrealized gains, while giving the trader continued upside potential.
Combining Cabot Options Trader and Cabot Growth Investor
Below is an article I wrote a couple years ago in response to a subscribers’ question regarding options and option volatility around earnings.
I’ve received a ton of great emails from subscribers over the last couple of days about huge profits this year. I’m thrilled that you are making lots of money. That said, while it’s great that we are making good money, we must remember the risks as well.
The S&P 500 is down 0.5% this morning, though well off the overnight lows (lower by 1.25%) following news that Gary Cohn, President Trump’s top economic advisor, is leaving his position. As the market has heated up, I’ve received many great questions from subscribers.
As the market has rebounded just short of 2018 highs, an interesting and somewhat complex trade structure has become popular: 1x2 Bull Call Spreads.
As the market was falling apart and the VIX was exploding to multi-year highs, Cabot Options Trader Pro subscribers executed a short volatility trade, selling an Iron Condor. Here are the details of the trade and some of my commentary.