Wow, this board is really dead. Anybody else out there?

 

Where are the new M* articles on options trading? They don't need to offer advice on specific stocks, but an article on volatility trading, for example, would be nice. I think to give the options board some support, it would be nice to have a new article each month.

But the market volatility has been at historic highs recently, so I think that has some merit for some new articles addressing the situation, both opportunities and risks.

 

Steve

 

 

I thought there would be more activity from their experts in regards to articles.  You are correct, with this volatility it should be an options traders dream.

 SR

I must say, I am disappointed by the articles on options in M*. I do think that the quotes, voltality etc. tables are nice. It would be very useful if strategies on options are written about regularly !

I am very disappointed in Morningstar's options education, information, and tools. I pop in every few months to see how things are progressing and slowwwwwwwwww is an understatement. I was hoping for enhancements that would complement the education, info and tools Schwab provides. I am learning a lot at sites like Investopedia.com and I have found the Ivolatility.com (free) basic calculator an incredibly useful tool. I have been shifting from writing covered calls exclusively to buying/selling calls and puts as well as selling bullish put spreads. Again, I was hoping M'star would provide tools to sort out the best options trades but ... .. .. An approach similar to that used by Value Line would be worth considering. They provide stock recommendations and have an online tool for considering various options strategies. They have a "guide" that shows how to use the tools and they have articles that provide general education as well as well as examples of how to use the tools on a daily basis. .. .. Since the market is always in flux I would prefer M'Star providing tools (or specific recommendations) rather than general articles. With respect to articles, the word "actionable" comes to mind. Yes, that's it. Any arcicles should be actionable. With respect to tools, I think the focus should be on crystalizing choices of specific actions that can be taken. For example I would appreciate a tool that helps pick the best spreads, the most overpriced/underpriced calls, and the most overpriced/underpriced puts. .. .. First, the work of M'star analysts could be distilled into a few (very few) "recommended" stocks and possibly ETFs (e.g., These stocks are more likely to move up than down over the next X months). Then tools could guide us to a short list of options strategies to take advantage of the synthesized analysis findings (e.g., the puts, calls, spreads with the highest likelihood of success). .. .. I guess what I am saying is that I am still in search of the "Options Holy Grail" and I will be stopping back periodically to see if M'Star comes up with one. .. .. Good luck to all.

Very nicely said, jms.

 

I hope M* takes your advice.

 

Steve

' 

If y'all are interested, my entry into this year's Hands-On contest is an all-options portfolio, presently up approx 67% for the year.   The explanation of my strategy is here:

 
 http://socialize.morningstar.com/NewSocialize/forums/post/2472885.aspx

 http://socialize.morningstar.com/NewSocialize/forums/post/2472886.aspx

 http://socialize.morningstar.com/NewSocialize/forums/post/2473606.aspx

 and some more on what I think is going on in general:

 http://socialize.morningstar.com/NewSocialize/forums/post/2463921.aspx

Enjoy.
 

Yes it is dead...Nothing new for months...They had a trade on DEO but they took it off the site for some reason...I've asked a couple times whay with no reply..Randy

Hi Randy,

I thought I had responded to you.  I try to respond to every email I receive, but I've been out for a bit on paternity leave, so I may have missed it.

While we're working on building the options research staff, I've been working with our programmers on the options chains (among other things).  There have been beta versions of some new features up for months, and once we get things polished up, I'll write some articles explaining their use.  I'd love to hear everyone's feedback, and requests for additional features.

We don't plan to continually track every investment we propose, but here's the scoop on the DEO investment.

The article is still in the archive accessed from the options tab.  If you go to the "more" link below the current list of articles, you'll find the DEO article at the top of the list.  The analyst is no longer with Morningstar, so we took the article off the front page.  The investment concept is still valid.  At the time it was written, the numbers were:

Diageo: Sell Bullish

Stock Price      
$77.38

Option     
Write Jan 09 put

Strike     
$80.00

Premium    
$8.30

Cash Required    
$71.70

Expected 221-Day Return      
12.60%

Expected Annualized Return   
21.70%

Expected 3.6-Year Ret if Assigned  
106.20%

Expected Annualized Return if Assigned   
22.22%

The current data on the put is:

The put currently trades for bid $9.30 ask $10, and the stock price is at $73.40, down 5% from when the article was written.  If you were assigned today, you'd be up $2.20 on your $71.70 of cash, or 17% annualized.  The ask would make the trade a loss to exit today.

The concept is still valid, whether you collect the premium or get the stock put to you.  If entering the investment today, I'd consider writing Jan 09 puts:

                       Bid   Mid   Ask

70.00 DEOMN 3.60  3.85  4.10

75.00 DEOMO 5.90  6.20  6.50 

Both look attractive.

 

Phil