RadioActiveTrading Blog

Greetings, Traders!

I’ve decided that rather than bragging about MY plays, I’m going to start almost exclusively bragging about the plays of my Students.

This latest comes from Tom, who has been sitting on shares of XEC at a low cost basis for YEARS. Tom has shared the numbers with me and made them available for instructional purposes. I’m posting it here because I suspect there may be many more Traders in the same shoes as Tom: Having shares of stock that are UP… but no guarantees about the future.

This answers the problem that faces anyone that’s holding onto a stock that’s up from where they bought in. What’s a trader to do? We could sell right now because today’s price might be as high as it ever gets… or maybe we should NOT sell because after all, it’s gained so much, might it not just keep going up? Read the rest of this entry »

Well, it’s happened again: I’ve gone and overlooked one of the first lessons in The Blueprint and have now returned to its truth. This happens to us all, doesn’t it; you know something that works and yet you go away from what works, looking for something better to replace it.

Often, you hear the saying “Practice what you preach”. In my case, the thing that I have preached and caught myself NOT practicing recently is the use of affirmations to instruct and program my mind for better trades.

I know, I KNOW! Some of you guys out there might be rolling your eyes… like I have… at the “positive thinking”, “new agey”, somewhat psycho-babbly idea of repeating sentences to one’s self in an effort to somehow get centered in the universe.

Sigh.

Well, I think it’s silly too. So silly that I often overlook its power and effectiveness. Now, don’t get me wrong… I know better than to think that by repeating phrases over and over to myself, that I can actually make a stock’s price go up or down. Read the rest of this entry »

Q: During the course of your seminars you talk about the “risk free rate of return” and its impact on options when comparing them to stock, long calls and married puts…could you help me understand how the “risk free rate of return impacts the comparison?

A: Let’s take a look at a comparison between the Jan 2012 $60 call, and the Jan 2012 $60 married put.

The $60 call is trading at $6.00 X $6.50. You could probably get ‘in the spread’ with a limit order, but you probably won’t get it low as $6.00… maybe more like $6.20 or $6.30. With me so far?

Read the rest of this entry »

Q: When you close a position, do you sell the individual legs? i.e. Sell to close the stock at the lower price and then you sell to close the (protective/married) put instead of exercising the put at the higher strike price?

A: If you are looking to liquidate a Married Put position and the put still has a few months to expiration, it will always be better to Sell to Close the Stock and Sell to Close the Put, rather than simply exercising the Put option.

Why? Read the rest of this entry »

I want to share with you an experience I had yesterday. Actually, I have one version or another of this same experience ALL the time: I bump into someone that owns stock, or can get stock, at a lower price than it’s trading today. We strike conversation, I ask if they would like to see a way that they could have “stock insurance” so that the value of their stock would never go down… AND get PAID to have it.

They always say, “Wow! I never knew you could do that.” I know. A lot of people don’t know that you can absolutely protect your stock from loss and get paid to do it. But it’s true. And I run into people all the time that are in a position to do exactly that: buy an insurance policy so that their stock never, EVER loses ground… and have the cost of that insurance handled, even get paid to do it. I love telling people I meet about this fact.

Read the rest of this entry »

Wanna hear Kurt Frankenberg live on the radio??? …Your in luck, we have archives of the radio shows available on the http://www.radioactivetrading.com/ site now.

If you want to join in live, just go to castlerockradio.com every Wednesday at 12 noon Eastern time.

Here are links to the archives… (you can use these as podcasts as well, if you don’t have the time to listen now but want to take them with you on your iPod)

Its_Your_Money_4_14_10.mp3

Its_Your_Money_4_21_10.mp3

Its_Your_Money_4_28_10.mp3

Its_Your_Money_5_5_10.mp3

Its_Your_Money_5_12_10.mp3

Well… I hate to say I told you so…

(that’s a d@mn lie… everybody that says “I told you so” says it with at least SOME relish…)

…but I have after all been saying for eight years now how important it is to use put options, specifically married puts with stock, to make a stop that REALLY works. An exit plan that actually behaves properly.

See, “stop” orders fail miserably at doing what they are intended to do: “STOP” the hemorrhaging when your stock goes against you, and keep you safe.

Feel safe? Did yesterday help? Of course I’m talking about the PLUNGE of Wall Street, in which it fell nearly 1000 points… 650 of those points in just a ten minute period. If you were trading with stops, the term “Black Swan” means something real to you now. That swan swooped in and TOOK you out of a position with a certain amount of pain, pain that you need never feel again.
Read the rest of this entry »

Good Morning! In today’s email/blog look for these three things:

1. An invite to the twice-weekly live trading Webinar,
2. A trading lesson about mental stability that is sure to change your life if you ‘get’ it, and
3. Links to two very brief videos that will entertain AND teach one of several ways to take a trade from low risk to NO risk.

Ready?

Today I’d like to chat a little bit about those two tiny gremlins that steal your money and wreck your trading…

FEAR and GREED.

Before we explore how to exterminate these little fellers forever, let me invite you to take a look at one short, 3 1/2 minute video. This video will not show the mechanics of “BULLETPROOFING” your stock… like my free Webinar held every Tuesday and Thursday at 12:00 noon EDT does… but it WILL show the effect that bulletproof trading has on your attitude.
Read the rest of this entry »

In this post, comments and wisdom I got from an experienced options trader about married puts, risk management, and trading in general.

Hi gang! I recently got off the phone with a local (MY state) options trading enthusiast. All over the Denver and Colorado Springs areas there are groups that offer support to users of VectorVest, OptionVue, and other firms dedicated to teaching the public about trading options, then selling them the tools to do it. (I personally prefer a cheaper and better alternative at http://www.poweropt.com/RAT/ )

Anyway, some of these local groups look for guest speakers at their events. When a friend of a friend suggested that I talk with a local, veteran options trader… Dennis… I left a message on his phone a couple of weeks ago, then forgot about it. Read the rest of this entry »

Ah, just reveling in the morning after the FORT - Foundations Of RadioActive Trading Seminar. Here’s a question that came up, and that merits a good answer:

“Aren’t protective puts EXPENSIVE?”

Well… yes and no. I mean, they do cost money. The question should be phrased more like this: “Are protective puts WORTH what they COST?”

Better question, I think. Because guess what - the benefits FAR outweigh the costs. Plus, the put option may actually become a source of income… Read the rest of this entry »