Welcome to the inaugural post of Karpel’s Corner. This is where I will throw out my thoughts on the markets and share some of my favorite strategies. I will keep it market focused, but won’t miss an opportunity to teach trading strategies and commentate on the latest trends affecting the financial markets. Hope you enjoy […]

Over the years, we have seen many a market event du jour or “event of the day” that will often spur strong stock movements. Years ago, all eyes were on the trade balance. Then there was the money supply; durable goods; and the unemployment report. And now, the most watched event is any scheduled Fed […]

What do you do when a trade moves in an unexpected direction (and that direction is the opposite of up)? Here’s what you may be thinking: “I liked this stock at 80, when I first bought it, so now that the price is 50 it’s an even better deal!” Think again. It can be tempting […]

Of the utmost concern to any trader is protecting against loss. Your trading toolbox should include strategies that protect you whether selling or buying. Today, we’ll focus on stop-loss methods, basic tools that help you stop the inevitable losses before they are unmanageable. To begin with, the sell stop order is a basic strategy to […]

Taking an option position off correctly counts for more than putting a position on. Let’s talk about ways to do that. When I speak of an option position, I am talking about an options spread. Trading options outright is seldom an advisable way to trade. When you own options outright, time decay can crush your […]

There are many variables involved in deciding the optimal size for a trade. The size of your account, capital available, tolerance for risk and trading goals are all important considerations. Before we address these, though, let’s begin with a simple reminder: Liquidity, liquidity, liquidity. Ease of exit is always more important than ease of entry. […]

Options are an excellent vehicle for taking a directional view on a particular stock or the market as a whole. Having said that, I do not believe in buying puts or calls outright as time decay is the option owner’s worst enemy. So, we will discuss a simple and straightforward options strategy, the vertical spread. […]

Today, I want to talk about one of my very favorite low risk, high reward directional option strategies, the Butterfly. The strategy is long strike A one time, short strike B twice and long strike C once. The strategy is all puts or all calls. You can look at it as a combination of two vertical […]

With an increase of more than 30 percent in the S&P 500 during 2013, no one can blame the market for being stuck in the trading range this year. After five years of  steady increases, a correction may be approaching soon. The signals are mixed so far: Although the financial crisis is behind us and the […]

Sometimes, the prospects for a stock are not very good. You might want to open a short position on a stock when the price is too high relative to earnings, when economic prospects deteriorate, or simply when you believe a stock will suffer some selling pressure. But the availability of short selling may be limited […]