Markets were mixed and pretty flat yesterday and look to have some lift today. Traders are trying to figure out how to create positions with all of the information they are processing on interest rates and inflation and the indecision is clear when you look at the charts.
In unclear markets like we are seeing drilling down on the stocks that are working and are less effected by these challenges is the key to spotting winners.
Ian Cooper walked us through a few trades he is looking at and highlighted a very interesting clean energy play that has the opportunity for an explosive upside move.
Take a look at the video below and check out what he spotted as well as a couple other plays.
(scroll down for the video)
Scroll down to see the charts mentioned in the video.
The tools Ian uses spot these trades are outlined clearly in his Trigger Point Trade Alerts book which you can access here. It is a good resource to have on your desktop to reach for when you want to get an idea or confirm your next trade.
Keep learning and trade wisely,
John Boyer
Editor
Market Wealth Daily
Do you have to have money in your account to cover the 100 shares when you buy call option for 100 shares
Hi there! That is a great question. No, you don’t need to have the cash to cover the 100 shares, unless you plan to exercise the call option. (most options traders aim to sell the contract before expiration for a profit rather than exercise the contract and purchase the shares).
However, let’s consider what would happen if you did not sell your call option before expiration. (IMPORTANT: Every brokerage company is a bit different. Many beginner traders use Robinhood, so I’ll use them as an example. It’s very important that you find out how YOUR brokerage company handles these situations, so please contact them to ask what will happen if your options expire In The Money)
If your option is out of the money at expiration, it will expire worthless at the end of the trading day and be removed from your account. On the flip side, if your call option is IN the money on expiration day, your brokerage company will check to see if you have enough money to cover the 100 shares. If so, the contract will automatically be exercised and you’ll purchase 100 shares at the strike price. If your account does not have enough money to cover the 100 shares, your brokerage company will attempt to sell your contract before the market closes (usually an hour or two before close) and you’ll receive the full intrinsic value of the contract in cash.
Remember, you should check with your brokerage company to be sure you know how they will operate in these circumstances.
Good luck!