Word: gained
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Dates: during 2000-2000
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...raise the down payment. You could sell now and put the cash in the bank. Nothing wrong with that. But if you're banking on a depressed stock like Microsoft and think it will rebound, options can protect you against further erosion while giving you much of the potential gain...
Here's how: an October put option giving you the right to sell at $70--about where Microsoft currently trades--costs $5 a share. If the stock swoons, you still get to sell at $70. For that right you give up the next 5 points of gain but capture everything beyond that. A similar strategy can bridge you to the point at which you've held a high-flyer 12 months, qualifying for favorable capital-gains-tax treatment. "It puts a floor under your wealth," says Lee Reid, head of retail options at A.G. Edwards...
...general, use options only in tandem with stocks in your portfolio--to lock in gains and protect against events like an earnings report or a court ruling. There are exceptions, like Grandma's bull-call spread. That's a fairly conservative play in which you buy one long-term call option and sell another at a higher strike price. You lock in most of the difference--though the stock must go up, and if it goes way up, you lose the excess gain. If you've got a big portfolio, odds are there is an options strategy for you. Talk...
...rally not just every summer, but every season. And get this: seasonally speaking, the summer rally is the least exciting. Yale Hirsch, editor of the Stock Trader's Almanac, studied seasonal Dow moves back to 1964 and found that, on average, the summer rally was good for a 9.7% gain. But the autumn rally--August or September low to the high reached in October, November or December--averaged 10.4%. The winter rally averaged 14%; the spring rally...
...know if this is a suckers' rally? You can't. But note this: the NASDAQ's scintillating 19% gain Memorial Day week came on modest volume, and advancing stocks were roughly even with those falling--a tepid showing that suggests this rally could fade like a suntan. Don't be fooled by the sharp gain. Since 1900, there have been 31 bear markets, and in 17 of them there was at least one suckers' rally greater than 10% on the Dow, according to Ned Davis Research. All but one had at least one 5% bounce. The typical bear market...