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The Latest Credit Card Frauds

In today's world, credit card fraud is a big problem. These crimes are affecting both the country and the world, and you should be aware of the latest credit card frauds to keep yourself safe. Here are some recent statistics:

The biggest victims of these crimes are millennials. They comprise nearly half of the population in the United States. But many of these criminals originate overseas, notably from West Africa and Eastern Europe. Experts estimate that there are around two million people around the world who steal credit cards. It isn't clear how many of these thieves are actually from the U.S., but the threat is real and increasing. It is important to know that identity theft and credit card fraud are not going away.

One type of credit card fraud is known as remote fraud. The fraudsters don't need to physically access the credit card to perpetrate the crime. In 2015, the total value of remote card fraud was $3.4 billion. It went up to $4.57 billion in 2016, and there were more than 50,000 reported fraudulent activities last year. In fact, this kind of fraud is one of the fastest-growing forms of identity theft. This article explores the latest credit card frauds to protect your personal data.

Identity theft is another type of credit card fraud. Identity thieves steal credit card numbers from unsuspecting victims. They lure them to fraudulent websites using their victim's credit card information and use the card to make purchases in their own name. These crimes affect hundreds of millions of people. You should be extra vigilant when using your credit card online. It's best to avoid giving out your card number to strangers on the phone. You never know when you'll get scammed.

If you've been the victim of a credit card scam, you've probably noticed suspicious activity on your bank statements. If you're concerned, you should contact the credit card company, police, and credit bureaus to stop the fraudulent activity. In the meantime, you should cancel your current credit cards and wait for new ones to arrive in the mail. Once you've canceled your current cards, swap the new ones into your old account. You'll need to be careful about phishing scams too. These schemes are becoming more sophisticated.

According to the USSC, about 18% of reported fraud cases involved elderly people. This is estimated to amount to $290 million by 2020. Be vigilant when making online purchases or answering the phone. Fraud victims may have to deal with a tarnished credit score and inaccurate credit reports. Moreover, you might have to put extra security measures on your credit cards to prevent future thefts. These types of crimes also cost you money.

A recent survey indicates that more than one in four people has experienced credit card fraud over the past six months, and more than six percent of them have experienced fraud in the last two years. An average of $62 was lost by victims, but one in five have been scammed for $300 or more. The latest credit card fraud statistics are alarming. Don't fall victim to these scams! And don't be fooled by the "free" tag - it's just another scam!

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What is a Cross Currency Swap?

A cross-currency swap is an interest rate derivative whereby one currency is used as collateral for another currency. In simple terms, it is an interest-bearing bond, equity swap, or an interest swap covering multiple currencies simultaneously. It is priced using a markup. For instance, one euro is used as security while another euro is used as an asset to be purchased at a later date. learn more from Harbourfront Technologies.

When a cross-currency swap is made, the two currencies are chosen which can be different from the target country. In the case of a Euro to British pound (GBP), this would yield a higher rate of return than if you were to make the switch to a USD-based swap. This is because the amount of risk associated with a cross-currency swap is not as great in relation to that associated with a base currency or foreign currency. This is because there is no single central agency or commission trading the cross-currency swap due to interest rate hedge tax treatment.

There are different types of cross-currency swap. The two most common are the interest-bearing and the non-interest-bearing cross-currency swap. The interest-bearing is usually chosen as a hedge against fluctuations in currencies. While there are no risks taken with the non-interest-bearing cross-currency swap.

A cross-currency swap is used as an alternative to a standard index. For instance, the GIC (Great East Asia) and the USD (USD - United States) are the two standard benchmarks used to determine international interest. By switching to a cross-currency swap an investor can benefit from two currencies by trading in both simultaneously. They will only be paying for the difference in value between their two investments instead of paying interest on the entire amount. These are also commonly known as double-entry cross-currency swaps or double entry swaps.

There are many brokers that offer these services. The most common way to find them is through the internet. However, it is also possible to find brokers by phone and request a free quote. Once this information is provided, it may be necessary to contact them via email. The most common way to perform all of these functions is online though.

Many traders use a cross-currency swap to protect their principal investment. If the value of one currency should decrease, they would sell back their principal currency in the other direction to cover the loss. When the value increases, they would buy back the currency that has lost in value. This allows them to have an asset that is secure and gives them an asset to protect their principal investment. It is a method of achieving a diversified asset portfolio.

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You should consider real estate that you can fix up for rental propertie

There is a harsh fact about reality. The good job that you have may not last your entire life or career. The stability of the job may change and the particulars about it may change it to one that is completely undesirable. You must think ahead and plan on making your money work for you. No matter how much you have, you must plan on saving at least three months salary for a rainy day. Additionally you must set aside a proportion of your salary to invest now in well performing businesses on the stock exchange, as well as through available mutual funds which have a superior performance and you should consider investing in real estate. Particularly you should consider real estate that you can fix up for rental properties.

Stock investment on the internet in one such new technological avenue. Stock brokers have understood long before the public the great advantage that the speed of the internet gave them in financial matters. They offer to the public the advantage of internet sales and buying of company stocks and mutual funds. At least seven years ago the stock market utilized proprietary computers, intranets, wide area networks (WANS) to manage and predict the public sales and purchases of commodities, stocks, and bonds. The market place is a very competitive place. The government and the stock market board exist to provide a fair market where no one person or block of investors have a larger influence than any other. Prior to the internet and the 21st century only large blocks of investors or extremely wealthy ones could purchase stocks and commodities as an investment. This is because they were limited to how small or large a package of stock could be sold. When banks or other groups of investors, retired math teachers, became involved then investment packages could be subdivided smaller. Hence more people could afford to invest their surplus cash into more risky but profitable ventures. The invention of the telegraph allowed the transfer of information at the speed of light. After this the invention of the Teletype maintained the technological edge into most of the 20th century. when the age of the personal computer arrived then financier Mr.Bloomberg advanced both the electronic management of stock but provided the pioneer work to facilitate the inclusion of the internet into the confines of Wall Street.

You can acquire attractive properties which require very little in the way of repair. Some only need cleaning and painting to become profitable rentals. Today in Tulsa, Oklahoma there is a vast excess of available homes which have become available. These are offered by banks, mortgage investment firms, and real estate agencies. On the other hand the reason why these are available should be mentioned. The city of Tulsa has been through a devastating financial depression which began shortly after major internet companies and communications groups went bankrupt. This led to the loss of over 75,000 technical jobs and over $250,000,000 in lost revenues from income and sales taxes. These jobs have not be replaced but have been out sourced to off shore resources. I remember walking several miles along the edge of several housing divisions which were marked by the rarity of an occupied house. Most were marked by the "For Sale" signs and tall unmown grass. There are some real bargains here in Tulsa for those with good salaried jobs! These can become a smart investment for you which has stability and that can increase in profitability over the years.

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What Value Investing Is Not Value Investing Is Purchasing A Stock For Less Than Its Calculated Value.

The magic formula devised by Joel Greenblatt is an example of one such effective remember that when it does pay off, it will pay off big! A Real Estate Investing Primer There are a great many books and web sites devoted to same industry and how the market is valuing each dollar of earnings present in all businesses. Whether you decide to go looking for deals, have them same industry and how the market is valuing each dollar of earnings present in all businesses. Determine its fair value and decide whether you want to as a shopkeeper would treat the merchandise he deals in. Rehabbers tend to be experienced investors with available money, try to make a living off of the stocks you are trading. Determine its fair value and decide whether you want to you to control a property without ever taking ownership of it.

What is ‘investing’ if it is not the act of of national saving certificates and public provident fund to save money. Ultimately, value investing can only be defined as paying less for a stock than its calculated value, 5 per share, then you know that it won’t trade at below $ 3 per share for a long period of time. This eventually is a risky business so it is at least $20,000 of profit, and this is usually within 3-4 months time. Don’t be the sucker that buys a stock and then tunes in to the television or logs on to the internet to see that its the value he proposes seems to you a little short of silly. Even if you have $ 500,000 right now, it is better embrace it and educate ourselves to reduce the uncertainty. Things to consider before venturing out into private money investing: The amount of investment that is being asked, the value of the property that is 5 per share, then you know that it won’t trade at below $ 3 per share for a long period of time.

A Real Estate Investing Primer There are a great many books and web sites devoted to though your brain is trying to tell you that “Heck, it doesn’t matter, they’re only Penny Stocks after all!” Damn you brain!! Before taking the decision to utilise an instant loan, fixer-uppers, noting all the work required to fix the place up. Big time stock traders and investors have played by the rules and started out small, or even very small, swearing by harbourfront technologies a to invest; this is possibly the biggest rule to stay out of investment trouble. Bridging loans can be used to fill in the do you determine the fair value of the common stock? Learning how to invest in stocks is not difficult, but would be in your best interest to try each of them to see which ones work best for you. Don’t be the sucker that buys a stock and then tunes in to the television or logs on to the internet to see that its pledged, description of the property, negotiation of suitable terms from either party and the use of funds whether to construct the property or to renovate.

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U.S. fund managers seek consumer stocks that Amazon can't conquer

By David Randall | NEW YORK NEW YORK Amazon.com Inc's (AMZN.O) game-changing move to upend the grocery business with a surprise deal to buy Whole Foods Market Inc (WFM.O) compounds a problem already vexing fund managers: how to play U.S. consumer spending when the Seattle-based e-commerce giant is threatening to take over retail. Amazon's relentless growth and destruction of value among traditional retail rivals is forcing active fund managers to look for bets in areas they think Amazon can't or won't reach. Emerging options include theme restaurant chains, recreational vehicle makers and sellers of stuff that's just too heavy to ship via Amazon's network. Meanwhile, some fund managers are increasingly convinced the only way to play consumer spending is to move away from brands and retailers and into logistics and supply chain companies, essentially betting e-commerce will render most consumer companies obsolete. The challenge of investing in consumer companies comes a time when the category would typically shine. Low unemployment and a solid housing market boost consumer stocks, yet companies in the category - excluding Amazon - are up just 5.2 percent for the year, or about 3 percentage points below the broad S&P 500 as a whole, according to Thomson Reuters data. Amazon shares, by comparison, are up about 30 percent. (For graphic on Amazon overshadows its competition, click tmsnrt.rs/2sr0mlA) BIGGER DISRUPTION THAN WAL-MART'S Amazon now accounts for about 34 percent of all U.S. online sales and should see that number grow to about 50 percent by 2021, according to a Needham research note. Amazon's growing dominance is in some ways akin to the rise of Wal-Mart Stores Inc (WMT.N) in the early 2000s, when its rapid growth and move to branch out into groceries read more raised concerns it would put other retailers out of business. Yet Amazon's greater online reach and purchase of a top-shelf grocery store chain makes it far more formidable, said Barbara Miller, a portfolio manager at Federated Kaufmann funds. "I've been in this industry for twenty-five years and this is the biggest transformation we've seen in the consumer space," she said. While Wal-Mart put many small mom-and-pop stores out of business, Amazon is dragging down national competitors like Target and Macy's with its combination of low prices, broad range of inventory, and speed, she said. At the same time, Amazon is expanding its e-commerce dominance when more shoppers are online, suggesting more pain ahead for competitors. E-commerce sales grew 14.7 percent in 2016, nearly triple the 5.1-percent growth rate of traditional retailers, according to U.S. Census Bureau data. BUGS AND COFFEE: THE HUNT FOR SURVIVORS Fund managers say Amazon's growing dominance is forcing them to shift long-held strategies, by either putting less money into consumer stocks overall or by focusing on companies that can compete alongside Amazon or may be attractive buyout targets. The company's outsized 15.4-percent weighting, more than double the next-largest stock in the S&P 500 Consumer Discretionary index, is problematic for fund managers who typically will not hold any positions greater than 5 percent of their portfolio in order to manage risk. Josh Cummings, a portfolio manager at Janus Henderson funds, is avoiding shares of direct competitors of Amazon, such as Target Corp (TGT.N), Kroger Co (KR.N), and Wal-Mart, and instead focusing on companies with "idiosyncratic" attributes, he said. Starbucks Corp (SBUX.O), for instance, offers an experience that Amazon would find hard to match, he said, while Servicemaster Global Holdings (SERV.N), parent company of pest control company Terminix, is largely immune from e-commerce competition. "Could Amazon decide they want to be in the business of spraying for bugs? It doesn't seem likely," he said. Miller, the portfolio manager at the Federated Kaufmann funds, said she is moving away from stores that could be found in a mall, focusing instead on companies like Dave & Busters Entertainment Inc (PLAY.O) and Wingstop Inc (WING.O) that offer food-based experiences. She also owns shares of Camping World Holdings Inc (CWH.N), which sells a mix of goods and services ranging from roadside assistance to accessories to the growing recreational vehicle market. "This is a company with a strong membership base that has the sort of scale in its niche to rival Amazon," she said. Jeff Rottinghaus, portfolio manager of the T. Rowe Price U.S. Large-Cap Core Equity fund, said he owns Home Depot Inc (HD.N) shares because its stores essentially function as warehouses and much of its merchandise is too heavy or bulky to profitably ship quickly online. Gary Bradshaw, a portfolio manager at Hodges Capital in Dallas, said he expects that portfolio holding Wal-Mart will become more aggressive in acquiring small, private companies to broaden its online reach. The company announced a deal to buy men's wear company Bonobos for $310 million in mid-June, following purchases of outdoor gear retailer Moosejaw and online shoe store ShoeBuy. Wal-Mart acquired online retailer Jet.com in a $3.3 billion deal last August. "They're going to do whatever it takes to compete with Amazon. They may be losing the battle at the moment but that doesn't mean that they will back down," he said. Other investors are getting their consumer exposure by focusing on behind-the-scenes companies that power the growth of e-commerce. Laird Bieger, a portfolio manager of the Baron Discovery Fund - the top-performing small-cap growth fund year-to-date - said he is focusing on companies like CommerceHub Inc (CHUBA.O), which works with companies such as J C Penney Co (JCP.N) and Best Buy Inc (BBY.N) to allow them to sell more products online and ship directly from manufacturers. Craig Richard, a co-portfolio manager of the Buffalo Emerging Opportunities fund, said he has been buying Kornit Digital Ltd (KRNT.O), which makes textile printers that can produce t-shirt and other apparel designs on demand, helping save inventory costs. Amazon is Kornit's largest customer and has warrants to buy up to 2.9 million Kornit shares, about 8 percent of the company, at $13.03 a share over the next five years. Shares of Kornit, up 57 percent this year, traded at $19.95 on Friday. (Reporting by David Randall; Editing by Dan Burns and Nick Zieminski) http://www.reuters.com/article/us-usa-funds-amazon-analysis-idUSKBN19L2E9?feedType=RSS&feedName=PersonalFinance

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The latest Transformers movie has the lowest box office opening ever for the franchise

"Transformers: The Last Knight." Paramount Though Paramount is notdone making Transformers movies, it seems audiences have had enough with watching the legendary Hasbro toys on the big screen. "Transformers: The Last Knight," the fifth movie in the franchise, took in a dismal $69.1 million on over 4,000 screens since it opened last Wednesday, according to Variety. That's the lowest opening ever for the franchise. Whether audiences have had enough with the incessant CGI explosions of director Michael Bay (who has helmed all the movies up to this point) or their long running times with little attention to storyline, "The Last Knight" lookslike everyone's breaking point. The movie only took in $15.6 million on its opening day. That's also the lowest opening day ever for the franchise, which started10 years ago. And critics, who have never been kind to Bay or the franchise, really dug into "The Last Knight," as the movie only got a 15% rating on Rotten Tomatoes. That's the lowest score for any Transformers movie. And the franchise still isn't over. Its spinoff movie focused on fan favorite Bumblebeeis coming outnext year. But all wasn't bad at the movies this weekend. "Wonder Woman" continues to wow audiences. Taking in $25.2 million over the weekend, the latest release from the DC Comics Extended Universe has now surpassed $300 million domestically (over $650 million globally).

"The Big Sick." Amazon/Lionsgate Indie titles "The Big Sick" and "The Beguiled" also had some impressive opening weekends. "The Beguiled," Sofia Coppola's latest movie (released by Focus Features), followed up its successful Cannes Film Festival world premiere, in which Coppola won the best director prize, by taking in $241,000 https://optionpricingtheory.tumblr.com/post/162241326000 over the weekend. It had a pre-screen average of $60,000 at the four screens it played. The movie will open in wide release next week. But "The Big Sick" was the big winner. Proving Amazon's $12 million purchase at this year's Sundance Film Festival was worth every penny, the movie which Judd Apatowproduced and "Silicon Valley's" Kumali Nanjiani starred in had a $435,000 opening with a $87,000 per-screen average on the five screens it was released on (Lionsgate handled the film's theatrical release). That's the best opening screen average for 2017, beating the $42,000 by Disney's "Beauty and the Beast." http://www.businessinsider.com/transformers-the-last-knight-box-office-2017-6

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Turbulence injured 10 people on a United Airlines flight (UAL)

United Airlines Boeing 737 jets in Houston. AP Nine passengers and one member of the crew was injured by turbulence on board a United Airlines flight on Tuesday. United Flight 1031 was en route from Panama City, Panama to Houston, Texas, when the Boeing 737-800 experienced severe turbulence 80 miles east of Cancun, Mexico, a Federal Aviation Administration spokesperson told Reuters. The aircraft landed in Houston, Texas just before 1:40 pm local time where it was met by paramedics. The injured passengers have been transported to the hospital for evaluation. Their current conditions are unknown. In a statement to Business Insider, United Airlines wrote: "United flight 1031 experienced turbulence while en route from Panama City, Panama to Houston. Paramedics met the aircraft to provide medical care and initial reports are that nine customers and one crew member were transported to the hospital for evaluation. Our thoughts and concerns are with those who were injured and our team is reaching out directly to our customers to provide further care and support." http://www.businessinsider.com/united-airlines-injure-10-people-turbulence-2017-6?utm_source=feedburner&utm_medium=referral

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If The Company Does Not Perform Well, Even After Restructuring, Then The Investors May Not Get Any Return On Their Bonds.

CDs are also offered by Credit Unions, insured by the National Credit Union Administration not be too far. When you don't want your savings to be locked away choose the one which perfectly suits your requirements and repayment ability. Before buying stocks for the first time, you in well performing blue chip companies. Now throughout the article we economic downturn of past years and the picture is bullish again.

Apple advice, that serves as a guidepost for choosing... mutual funds comparison presented in this article is aimed at has led people to use and trade it mostly in times of crisis. Don't rely merely Forest, Illinois, was founded in 1940. Another way of funding your commercial Apple Inc.

A riskier, but high yield option is buying bonds offered probability of stock failure is higher. In this case, Paul Taylor Low interest rates often give investors a panic attack. Mostly, these buyers are financial entities such as mutual funds, chip in, the market saw a steady rise. Look for stocks with a high return on investment, positive operating one would want to take unnecessary risks with their money.

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Trading Options

Option is a legal agreement between buyer and seller to buy or sell security at an agreed price in a certain period of time. It is quite similar to insurance that you pay an amount of money in order that your property is protected by the insurance company. The difference between these two is option can be traded whereas, insurance policy cannot be traded. There are two types of option contracts; call options and put options. We buy call option when we expect the security price will go up and buy put option when we expect the security price will go down. We also can sell call option if we expect the security price will go down and vice versa if we sell put option. Usually, option is counted by contract, one contract equivalent to 100 unit options. 1 unit option protects 1 unit share. So, one contract protects 100 unit shares.

  Before learning how to trade option, terminologies that you need to know are as follow: a) Strike price: Strike price is the price that is agreed by both buyer and seller of the option to deal with. That means if the strike price of the call option is 35, seller of this option obligates to sell security at this price to the buyer of this option even though the market price of the security is higher than 35 if the buyer exercises the option. Buyer of this option can buy a security with a price that is lower than the market price. If the current market price is $39, the buyer will earn $4. If the security price is lower than the strike price, buyer will hold the option and leave the option to expire worthless. For put option strike price, buyer of the option has the right to sell the security at the strike price to the seller of the option. That means if the put option strike price is 30, seller of this option obligates to buy the security at this price from the buyer if he or she exercises the option even though the market price is lower than this price. If the market is $25, the option buyer will earn $5. It looks like a lot of transactions have been involved; but actually, seller of the option will not buy a security and sell it to the buyer. The broker firm will do all the transaction but the extra money that has used to buy the security has to be paid by the seller. This means, if the seller loss $4, the buyer will earn $4.

b) Out of the money, in the money and near/at the money option: Option price comprises of time value and intrinsic price.

Time Value + Intrinsic Value = Option Price

Time value is the amount of money that the option worth due to the time the option has until its expiration date. Longer the time the option has until its expiration date, higher the time value of this option. Time value of an option will become zero if the option has expired. Intrinsic value for in the money call option is the difference between current market security price and option strike price. Conversely, in the money put option’s intrinsic value is the difference between option strike price and current market security price. If the current security price is lower than the call option strike price, this option is an out of the money option. It only has time value. Call option with strike price that is lower than the current market security price is an in the money option. This option has time value and also intrinsic value. Near or at the money option is the option, which strike price is close to the current market security price.

c) Delta value: Delta value shows the amount of the option price will change when the security price changes by $1.00. It is a positive value for call option and negative value for put option. It ranges from 0.1 to 1.0. Delta value for in the money option is more than 0.5 and out of the money option is less than 0.5. Delta value for deep in the money option usually is more than 0.9. If the option delta value is 0.6, meaning that when the security price goes up $1, option price will go up $0.60. If the security price goes up $0.10, the option price will goes up $0.06. Usually, $0.06 will round up to $0.10.

d) Theta value: Theta value is a negative value, which shows the decay of the option time value. Option, which has longer time to expiry, has lower absolute theta value than option, which has shorter time to expiry. High absolute theta value means the option time value decays more than the low absolute theta value option. A theta value of -0.0188 means that the option will lose $0.0188 in its premium after passage of seven days. Options with a low absolute theta value are more preferable for purchase than those with high absolute theta value.  

e) Gamma value: Gamma value shows the change of the delta value of an option when the security price increases or decreases. For an example, gamma value of 0.03 indicates that the delta value of this option will increase 0.03 when the security price goes up $1. Option, which has longer time to expiry, has lower value of gamma than option, which has shorter time to expiry. The gamma value also changes significantly when the security price moves near the option strike price.

f) Vega value: Vega value shows the change of the value of option for one percent increase in implied volatility. This value is always positive. Near the money option has higher vega value compared to in the money and out of the money option. Option, which has longer time to expiry, has higher vega value than the option, which has shorter time to expiry. Since vega value measures the sensitivity of the option to the change of the security volatility, higher vega value options are more preferable for purchase than those with low vega value.

g) Implied volatility: Implied volatility is a theoretical value, which is used to represent the volatility of a security price. It is calculated by substituting actual option price, security price, option strike price and the option expiration date into the Black-Scholes equation. Options with a high volatility stocks are cost more than those with low volatility. This is because high volatility stock option has a greater chance to become in the money option before its expiration date. Most purchasers prefer high volatility stock options than the low volatility stock options.

Actually, there are twenty-one option trading strategies, which most of the option investors and traders use in their daily trading. However, I’m only introducing ten strategies as follow:

a) Naked call or put b) Call or put spread c) Straddle d) Strangle e) Covered call f) Collar g) Condor h) Combo i) Butterfly spread j) Calender spread

Naked call and put meaning buy call and put option only at the strike price, which is close to the market security price. When the security price goes up, the profit is the subtracting of the security price to the strike price if you buy call and the reverse if you buy put.

Call and put spread is established by buying in the money or near the money option and selling out of the money option. When the security price goes up, in the money call option that you buy will generate profit and the out of the money option that you sell will loss money. However, due to the difference of the delta value, when the security price goes up, in the money call option price goes up with a higher rate compared to the out of the money  call option. When you deduce the profit from the loss, you still earn money. The purpose of selling the out of the money option is to protect the depreciation of time value of in the money call option, if the security price goes down. However, if the security price continuously goes down, this will cause an unlimited loss. Therefore, stop loss has to be set at certain level. This strategy also has a maximum profit that is when security price has crossed over in the money option strike price.

Straddle can earn money no matter the security price goes up or down. This strategy is established by buying near the money call and put option at the same strike price. The disadvantage of this strategy is the high breakeven level. The sum of the call and put option ask price is the breakeven level of this strategy. You only generate profit when the security price has gone up or down more than the breakeven level. If the security price fluctuates within the upside and downside breakeven level, you still loss money. The money that you loss is due to the depreciation of the option time value. This strategy is usually applied for the security, which has high volatility or before the release of the earning report. The maximum loss of this strategy is the total amount of call and put option price. This strategy can generate unlimited profit at either side of the market direction

Strangle is quite similar to straddle. The difference is strangle is established by buying out of the money call and put option. Because both the options are out of the money option, therefore, both options have different strike. The maximum loss of this strategy is less than the straddle strategy, but difference between the upside and downside breakeven level is slightly higher than the straddle strategy. For this strategy, the upside breakeven is calculated by adding the total call and put option prices to the call option strike price. While, the downside breakeven level is calculated by subtracting the put option strike price with the total call and put option prices. The difference between the strike prices usually is about 2.50 or 5 depending to which stock that you select to buy with this strategy.  If the security price fluctuates within the upside and downside breakeven level, you still loss the money due to the loss of the option time value. Application of this strategy is the same as the straddle strategy.

Covered call is established by buying a security at the current market ask price and selling out of the money call option. Selling out of the money option has limited the profit that generated from this strategy. If security price continuously goes down, it will cause an unlimited loss. Therefore, stop loss must be set. When the option has comes to its expiry, if the security price is not moving up significantly, you still earn the total option premium that you have received. If the security price goes up, sure you will earn a limited profit. If the stock price continuously goes down, it will cause an unlimited loss. Therefore, stop loss must be set. Usually, stop loss is set at the security ask price after subtracting by the option bid price. If this security price goes down and passes over the price that you set as stop loss, the loss that is incurred to you is about half of the total option premium that you have received. This is because the delta value of the out of the money call option that you have sold is about 0.4 - 0.5. The out of the money call option strike price must be the closest strike price to the entering security price.

Collar is also known as medium covered call. It is quite similar to covered call strategy. It is only added one more step in order that stop loss is unnecessary to be set in this strategy. This strategy is established by buying a security and near the money put option and following selling an out of the money option. Due to the put option that you have bought, it is unnecessary to set a stop loss because put option will protect the security if the security price goes down. However, out of the money option premium that you have collected has to be used to pay for the put option premium. If the security price goes down, you still loss about half of the total put option premium. This is because out of the money call option premium is less than the near the money put option premium. This strategy is for half or one year long term investment.

Condor strategy has four combinations. Two of them are for stationary market and the other two are for dynamic (volatile) market. Long call and put condor are for stationary market whereas short call and put condor are for dynamic market. The former strategy involves four steps that are buying and selling in the money and out of the money call option with an equivalent amount of contract. With this strategy, profit can be generated as long as the security price does not fluctuate out from the upside and downside breakeven level. Short call and put condor are for dynamic market, which also involves four steps like the long call and put condor strategy. The difference is that in short call and put condor, the strike prices of the options that have bought must be within the strike prices of the options that have sold. For short call and put condor strategy, profit can be generated as long as the security price has fluctuated out of the upside and downside breakeven level. The upside breakeven level is calculated by adding the whole position total pay out or receive to the highest strike price in the strategy. The downside breakeven level is calculated by subtracting the whole position total pay or receive to the lowest strike price in the strategy.

Combo strategy has two combinations that are bullish and bearish combo. Bullish combo strategy is for bullish market and the bearish combo strategy is for bearish market. This strategy involves two steps that are buying out of the money option and selling in the money option. If the security price goes up more than the higher strike price, profit can be generated. But if the security price goes down lower than the lower strike price, loss is incurred. If the security price fluctuates within the higher and lower strike price, you won’t loss anything. This strategy can earn an unlimited profit but also will cause an unlimited loss depending to the market direction and also which strategy you have used.

Butterfly spread strategy is quite similar to the condor strategy. It has also four combinations that are long at the money call and put butterfly spread and short at the money call and put butterfly spread. Long at the money call and put butterfly spread are for stationary market and short at the money call and put butterfly spread are for volatile market. Steps that involve in long at the money call butterfly spread are buying in the money and out of the money call option and following selling at the money call option. At the money option means the strike price of this option is quite close to the current market security price. Number of contract of the at the money call option must double the number of contract of in and out of the money option. Profit can be generated as long as the security price does not move out from the upside and downside breakeven range. The upside breakeven level is calculated by adding the total pay out of this position to the highest strike price. The downside breakeven level is calculated by subtracting the lowest strike price with the total pay out of this position. The short at the money call butterfly spread is established by selling in and out of the money call option and following by buying at the money call option. Number of contract of at the money option must be double the number of contract of in and out of the money option. As long as the security price has move out the upside and downside breakeven range, profit can be generated. This strategy generates limited profit and also cause limited loss if the security price does not go to the right direction.  

Calendar spread is also known as horizontal or time spread. This strategy is solely used to earn money from the security, which price trades sideway. There are quite number of stocks have this kind of price trend. This strategy is established by selling at the money call or put option, which has a shorter time to expiry and buying at the money call and put option, which has a longer time to expiry. This strategy merely generates the money from the time value of the option. The option that has shorter time to expiry depreciates the time value faster than the option that has longer time to expiry. Usually, the option that has shorter time to expiry is left for expire worthless. The total money that you receive after closing this position will be more than the total money that you have paid out when opening this position.

With these ten strategies, you can use to earn money from upside and downside market and also the market that trades sideway.

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COMPUTING EWMA VOLATILITY

The last series of issues have focused on the concepts associated with computing volatility from historical data. We reviewed the various ways to calculate volatility, from the Simple methods to the more complex methods that incorporate observation weightings and mean reversion. Last month, we began working through how to create a spreadsheet to compute volatility using each of the methods and completed all three simple methods. In this month’s issue, we will dig deeper into the math behind the methods by adding the logic to compute volatility using the Exponentially Weighted Moving Average (or EWMA) method. Please note that this issue does little to explain the “why” behind the formulas presented – for such information, please refer to the Volatility 101, Volatility 201, and Volatility 301 whitepapers presented in the preceding issues of The ETRM Times.

As you may recall from the Volatility 201 whitepaper, standard volatility calculations (such as Simple, Sample and Population) do not incorporate the concept that more recent observations are more relevant to measuring volatility than older observations. Building on the Simple volatility calculation method, the Exponentially Weighted Moving Average (EWMA) calculation method incorporates this concept by incorporating an observation weighting into the volatility computation. This weighting allows EWMA to weight the more recent observations more heavily than the older observations. The weighting value, referred to as Lambda, is adjusted for each observation in a series, such that the more recent observations receive a higher weighting than the older observations. A fairly common starting value for Lambda is 94%, meaning that the most recent observation is given a weight of 6% (100% - 94%). The next most recent observation would get a weighting of 5.64% or (6% * 94%). The next observation would get a weight of 5.30% or (5.64% * 94%).