Andrew Baxter

So, you have an interest in investing or generating Cashflow? One of the most common trading strategies used by successful traders, for generating cashflow, is covered calls or buy/writes.  This is a strategy that has the potential to significantly increase your returns – above and beyond that of simply shares. According to the ASX, a recent study* has shown that “through a range of active and passive covered call strategies, you can make your shares work up to 7.25%pa harder” Often, investors spend a lot of time working out the relative benefits and weaknesses of using this stock options strategy on either Australian or US stocks. Some use clumsy tools and even the newspaper to try and find out the best opportunities for them. At times they don’t know what do next, if the share price moves up, if it falls or if it stays static. When it all gets too hard, most investors seek input from a specialist advisor to assist them with placing or managing the position...

Quite often I speak to clients who have just seen on the news or read in the paper that XYZ company is looking to merge with ABC company, and is willing to pay a phenomenal price per share. The commentary will usually include an expectation for the share price to rise, and that investors in XYZ are likely to make a fantastic return. Headline If a headline is in the newspaper, then the stock market has usually already reacted. Whether that is in a positive or negative sense. While the newspaper in years gone by was the key information source, the Internet now provides us with instantaneous assimilation of newsworthy data. Stock prices will rise and fall as investors perceive company announcements, industry news, or economic data to be influential on the future profitability for the business. For example, a scheduled earnings announcement from XYZ will cause investors to buy or sell shares depending on how the results are perceived. If they exceed expectations,...

For those that follow the stock markets closely, the past month or two has seen nervousness rise, with events in Crimea, North Korea and Turkey all turning up the heat, in terms of geo-politics. For some, this has meant pulling on the crash helmet and getting in the bunker. However, not for those who have attended our Options Trading Course Australia. These times of volatility are what skilled, trained options traders look for and love. I guess it’s a bit like is the cup half full or half empty! Volatility Allow me to explain. Volatility is one of the Greeks – the complex mathematical components that go into an option’s pricing. It is a major element of what we look for in certain strategies. As a rule of thumb – again something we teach at our Live Options Trading Course – is during times of low volatility (where you expect it to rise), traders should look to buy options – volatility being low and rising should help push the price of the option up. Equally, whe...

Australian Resource stocks have been hammered recently, with share prices falling and driving the broader ASX (Australian Stock Exchange) to 2-month lows. With fear of a global economic slowdown, are Australia’s leading Mining stocks likely to fall any further? Two sectors drive the Australian stock market : Banking and Mining. While they may not be the largest employing sectors, they produce a large proportion (through royalties) for state governments, and when these sectors decline, the average investor feels the pinch. Statements from the World Bank, released last week, suggest that global economic growth will slow more than previously expected in 2014. Global growth forecasts have been cut from 3.2% to 2.8% following a ‘sluggish’ start to the year. Expectations are that the US will continue to slowly improve while the Eurozone remains in a slow recovery. The Developing countries are also feeling the pinch, with sub-par performance expected, with China GDP expect...