Fundamentals 101: Return on Equity
How do you evaluate the effectiveness of a company’s management? One measure that can be used on a wide variety of stocks is Return on Equity. That means that if you’re looking for a growth, value or income stock you can apply this measure. That’s due, in part, to the fact you’re considering the return […]
The Ultima Income Generator Guide to Selling Options Part 6
This is the sixth and final installment to the Ultima Income Generator. While this doesn’t represent a complete description of all of the elements to the strategy and hedges, our members have access to a 5-hour class with slides, and multiple 3-hour classes on hedges. Since we have progressed through the back-drop of strike and […]
Find Your Valuation Edge with the PEG Ratio
I know, you’re probably laughing at the prospect that a fundamentals measure like PEG provides an edge. You may think that we’re beyond looking at fundamentals in the current market. You may be thinking that growth perennially outperforms value. The reality is that fundamentals and valuation always matter. It’s just a matter of which fundamentals […]
The Ultima Income Generator Guide to Selling Options Part 5
Now that you have the rules for selling calls and puts, let’s talk more about the advantage that you gain from the strike/expiration selection. As a premium seller, you make your money through time decay, measured by the option Greek “Theta.” The rules outlined in Ultima are specifically designed to balance the reward and risks […]
The Ultima Income Generator Guide to Selling Options Part 4
So far, the focus has been on setting the stage for the strike and expiration selection for the Ultima Income Generator. The numbers say to sell more time, sell OTM and hedge your risk. Today, the focus is going to be on some of the advantages of the strike/expiration combination of Ultima. Ultima Foundational Strategy […]
Introduction to Inflection Point Spreads (IPS)
Since the “COVID Crash” of 2020 the market has generally been vertical with minimal volatility. Ironically, the VIX has remained relatively high, and the high skew reflects the guarded nature of institutional investors. This has made it difficult to apply hedges without increased of out-of-pocket cost, which will be a drag on performance. Here is […]
The Ultima Income Generator Guide to Selling Options Part 3
The next step in the Ultima progression is understanding implied volatility and strike selection. Before we delve into which strikes to choose, there is an important concept called implied volatility skew that is important to understand first. In part 2 of the Ultima Income Generator, I discussed the concept of buying low and selling high. […]
The Ultima Income Generator Guide to Selling Options Part 2
I hope last week’s Part 1 blogpost led you to want to learn more about the Ultima Income Generator. If you missed it, you can click here to review the origin story of Ultima. Now that we understand the name and the person that developed it, let’s talk about selling options. Everyone Loves High Probability […]
The Ultima Income Generator Guide to Selling Options Part 1
There has been a lot written on selling options to generate income and trade in a high probability fashion. However, there has never been an approach that adequately addresses the risks of selling nor approached it quantitatively like this. The Ultima Income Generator is unlike anything you’ve ever studied on the subject! The Ultima strategy […]
The Rubber Band Trade for a New Year
You’ve probably heard the term, “what goes up, must come down.” That makes sense when gravity is considered, but what about asset prices? Is there a certain financial “gravity” that plays out for stock trades? Absolutely! For financial assets like stocks, valuation is something that will eventually impact the price either positively or negatively. If […]