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Best IRA, Mutual Funds, Stocks, Currency, Forex, Gold, Silver & other Commodity Trading Investment Strategies for 2014

Whenever an IPO is issued, whilst many people tend to see it to be a great opportunity to invest, others ignore it, perhaps because they really do not know what it is all about. So, what really is an IPO? Well, IPO is an acronym for Initial Public Offering' and it refers to the initial sale of a company's stock to the public. The process of how to buy stock at IPO is quite different to the many other purchases that we usually make, and it is one of the reasons many people opt not to participate in this investment that could turn out to be quite profitable.

The first thing that you would need to do is to have a trading account. The trading account is usually required for you to purchase any kind of stock, and when it comes to the IPO, careful attention would need to be paid to the firm of brokerage that you choose to sign up with. Ensure that as you sign up for this trading account, ask lots of questions about the IPOs and how the firm would help you to be able to get the best out of your trading experience. You can , make sure you check with them about a particular upcoming IPO you are interested in. They have an excellent customer service reputation and trades are very reasonable at $4.95.

It is common for people to rush into IPOs just because everyone else is doing it, but it would be quite important to do research on individual IPOs before you invest in them. The internet is a great resource that you could turn to, as there are lots of websites available that offer information on various upcoming IPOs. This would allow you to be able to plan well, for instance, setting aside funds that you might want to use in the IPO. The information you get would also help in determining whether it would really be the right decision to invest in a given IPO.

The next thing that you would need to do is to get in touch with the 'right' people. This is with regard to connections, because when it comes to IPOs, people rarely get the number of stock that they applied for due to the great number of applicants. Brokers are known to sell the IPOs to those that they consider to be top clients, and hence, getting in touch with the underwriters, would be a good way to ensure that you do indeed get a favorable percentage of the stock. For a high profile IPO like Facebook, it is almost impossible for an average investor to get the stock at IPO.

The last thing that you would be left to do is just simply buy the stock, and this should be preferably done after following the above steps. Before you do this, there are given criteria that you would have to meet before you are allowed to buy the stock. This might at times vary from one brokerage firm to another, so ensure that you do get to be eligible to buy stock well in advance of the deadline for the purchase of the shares. Once you are in possession of the shares, continue to look for information that would help you be wiser as you aim to make this venture be profitable.

IRA Basics

Apr 9

Saving for retirement is must for everyone. It is good for you, your family, your community, your country and the whole universe. Saving for retirement has become a basic necessity in current world. If your work plan offers a 401(k) or any kind of savings plan for retirement, take it, don't think twice. Participating to 401(k) becomes even more important if your employer matches in some fashion to what you contribute, definitely max it out and make sure you are not missing any of that free money. Now not all employers offer 401(k) and that's why the Government has provided some incentives to encourage people to open IRAs to save for their retirement.

IRA stands for Individual Retirement Account. There are three major types of IRAs; Traditional IRAs, ROTH IRAs and SIMPLE IRA Plans.

Traditional IRA is the original concept for an Individual Retirement Account. Contributions to Traditional IRAs may be tax deductible, or nondeductible. Earnings are allowed to accrue to these IRA accounts free from income taxes until withdrawn.

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General requirements are having taxable compensation and have not reached age 70 1/2 by the end of the calendar year. The contribution limits for a Traditional IRA are $5,000 in 2012, or $6,000 with the catch-up contribution that applies to folks age 50 and older.

Contributions to Traditional IRAs are capped at your taxable compensation. Tax deductible contributions are also phased out as income increases. If you're an active participant in a qualified employer plan such as a 401(k), 403(b) or 457, the money you put in Traditional IRA is not tax deductible.

Roth IRA is an excellent option if you qualify. The qualification rules are below:

Those Married and Filing Jointly can contribute a maximum of...

$6,000 if you're over 50 and your combined earned income is $173,000 or less
$5,000 if you're under 50 and your combined earned income is $173,000 or less
$0 regardless of age if your combined earned income is more than $183,000
If your earned income is somewhere between $173,000 and $183,000, your 2012 maximum contribution limit phases out.

Those who are filing as Single or Head of Household can contribute a maximum of...

$6,000 if you're over 50 and your combined earned income is $110,000 or less
$5,000 if you're under 50 and your combined earned income is $110,000 or less
$0 regardless of age if your combined earned income is more than $125,000
If your earned income is somewhere between $110,000 and $125,000, your 2012 maximum contribution limit phases out.

With ROTH IRA, the principal you invest will be on after-tax basis. But the earning on your investment will be tax-free when you withdraw at retirement. This is a huge benefit for most people since one would generally be at a higher tax bracket at retirement.

No matter what your current age is, please take saving for retirement seriously and make it a priority, the earliier you start, better off you will be at retirement. One should start this as soon as he/she is eligible, start with $100 a month if you can't afford more. Think of that as investing on future.

This is one of the most common available personal investment option to people. You can trade stocks online for any public companies in the United States. There are many online systems (called online brokers) you can use. The online brokers charge fees (called commissions) for each trade you make. These fees range from $5 to $30. We recommend using which only charges $4.95 for each trade and provide many useful features and an easy to understand interface.

Check out the Video tour below on Pacing a Stock Order.

Once you have the account with an online broker, you need to know what stocks you want to buy and then when to sell them. There are several services available which will help you make these decisions. We recommend Zack’s premium research, enroll for free trial and get the stock picking tips.

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We also recommend one more useful service provided by the Fast Money fame Jim Cramer. Also sign up for the free trial with his action alert plus service and get his tips.

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You are all set with trading stocks, be sure to follow the market regularly and prepare your strategy.

Investors are increasingly forced to choose from a proliferation of investment options. They also have to deal with contradictory advice on how to achieve their financial goals and how to invest the savings they have accumulated during their lifetime. If you consider that there are more than 7 000 mutual funds available in the United States alone, and thousands of insurance products worldwide, making the choice that will satisfy them ever after is daunting, to say the least.

No wonder people so often ask the rather general question: Which investment is best? The first part of the answer is easy: No single investment is 'the best' under all circumstances for all investors. Personal circumstances, goals and different people's needs differ, as do the characteristics of different investments. Secondly, one asset class's strength in certain circumstances could be another's weakness. It is therefore important to compare investments according to relevant criteria. The art is to find the appropriate investment for each objective and need.

The following are the most important criteria:

  • the goal of the investment
  • the risk the investor can handle
  • liquidity required
  • taxability of the investment
  • the period until the financial goal is reached
  • last but not least, the cost of the investment.


Goals determine the characteristics sought in an investment. You will be in a position to choose the most appropriate investment only when you have decided on your short-, medium- and long-term goals. The following generic goals are normally involved:

Emergency fund

Emergency fund money should be readily available when needed, and the value of the fund should be equal to about six months' income. Money market funds are excellent for this purpose. While these funds do not perform much higher than inflation, their benefit is that capital is saved and is easily accessible.

If you already have a ready emergency fund covering more than six months' income, you could consider a more aggressive mutual fund

Capital protection

If your primary aim is capital protection, you will have to be satisfied with a lower growth rate on the investment. Those above 50 are normally advised to be conservative in their investment approach. While this may for the most part be sound advice, you should also keep an eye on the risk of inflation, so that the purchasing power of your money does not depreciate. It is not the nominal value of the capital that should be protected, but the inflation-adjusted one. At an annual inflation rate of 6%, $1 million today will buy the same as $156 255 in 30 years' time. A 50 year-old with %1 million would therefore have to lower his living standard substantially if he only retains the &1 million until he was 80.


Conservative investments like those listed above should form the normal basis for providing an income. Because of inflation risk, investments should be structured so that they can at least keep up with inflation. This means that at least a percentage of the investment source providing the income should be made up of other asset classes like property and equity mutual funds. The percentage would differ according to individual and economic circumstances.

Investors fortunate enough to have their basic budget provided for by a conservative fund could consider increasing their income with commercial property funds and tax-free income from dividends paid out by listed shares.

Capital growth

If an investor's primary goal is to achieve capital growth, the real rate of return should be higher than inflation. This implies greater risk to capital in the short term. Investors aiming at capital growth should not be apprehensive, as they will reap the rewards in the long term.

The history of equity prices over the past 100 years proves equity investments to be the best performer, followed by property. This does not mean you should buy either of these investments blindfolded. Wait until the quality shares in which you are interested are trading at inexpensive price levels.


The investment with a history of the highest growth is not necessarily the one to choose. The Standard Bank's Gold Fund increased by 178% during the period 13 August 2001 - 24 May 2002 (284 days). Judging only on the growth of the fund during this period, it performed exceptionally well. But would it be the right investment for a retiree? During the 805 days following this, the same fund experienced a negative growth rate of 44%! The problem with an investment that decreases by this percentage is that it will not reach its previous peak by increasing again by 44%. This is because the growth this time will take place from a lower base, so in fact the investment would have to increase by approximately 80%.


Hard assets like Persian carpets, works of art and antique furniture may be good investments in the long term, but unfortunately they are not very liquid. The same is true of certain shares in smaller companies. Money market funds, on the other hand, are very liquid, but the returns may not always be as good as those from other investments. The need to liquidise the investment quickly is therefore also a criterion to consider when evaluating investments.


The taxability of an investment has a considerable impact on its value to the investor. When comparing the returns on different investments, the return after tax has been deducted should be used. The investor should always ask what will be left in his pocket after tax deduction.


Conservative investments with no potential for high returns are suitable for shorter periods, while investment-objectives with longer time horizons aspire to achieving higher returns. Money market funds are suitable for periods of one or two years. Income and conservative asset allocation funds for three or four years and flexible asset allocation funds, commercial property funds and value equity funds may be chosen for longer periods, dependent on the economic and interest cycle and the propensity of the investor to accept risk.


The costs involved in an investment are normally things like administrative cost and commission. The percentage of the costs to the investment amount directly affects the value of the investment. Many of the currently available investment products are structured in such a way that investors can negotiate commission.


No investment strategy blueprint is going to be perfect for everyone's circumstances. Investment opportunities should therefore be examined critically before any decision is made. It should also be kept in mind that there are different companies managing specific funds under the investment categories referred to above. Some are more effectively managed than others. Investors should therefore research investments as well as the managers thoroughly before investing. Otherwise, they could appoint professional asset managers to do so on their behalf. Time spent determining the type of investment you really need is time invested in your future financial well-being.

Dr. Manus Moolman has done extensive research on the issues of investing and wealth creation. He is dedicated to assist anyone, from laymen to professional traders, to invest successfully and become rich.

Want to contact him? Then please visit his website at:

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Ok, so I know most websites and magazines normally release this information in December, but I'm a little late to the party. I would say that if I could bet on a football game after watching the first 6 minutes, I would definitely win a lot more, so listen up:

1. The Economy Will Continue to Get Better - Although many of us don't feel like it, things have gotten A LOT better since it felt like the world was going to end in the fall of 2008. If you don't remember, check out my Cornell classmate's Andrew Sorkin's book "Too Big to Fail" or cheat and watch the HBO movie. We were at a point where Americans were prepared to take their money out of their savings accounts and were questioning whether the FDIC only insuring up to $100,000 was enough. Since Obama took office there has been an increase in the Dow Jones Industrial average. It is up 4,771 points to last Friday's close of 12,720 as his fourth year begins. I AM NOT saying that it is because of the president or our government per se, I'm just stating a fact and I think it will continue to trend upward this year.

2. Gold, Silver, and Stocks Will Be Bullish - I know that sophisticated investors will point out that there is usually an inverse relationship between commodities and stocks. I could easily see a lack of recovery belief pushing gold to reach a peak between $1800-2000 and silver around $70-80 an ounce. In the meantime, the market will be led by the Facebook IPO this year. I am a huge believer that the internet will thrust business growth like we have not seen since the Industrial Revolution in the 1800's. The same way that improved roads, canals and railways made it easier to link businesses and people, the internet has created a true global economy. The entire world will continue to get wired in which will spur economic growth.

3. Banks Will Continue to Be Reluctant to Lend to Small Businesses - With the Fed being forced to keep rates low, banks will be unable or unwilling to lend at lower rates. The good news for businesses is that I know a lot of people are sitting on a lot of cash these days, still nervous about investing it into anything. There will be a lot of money in the private sector to raise if entrepreneurs know the right people or if business/investors begin utilizing angel investing sites such as Gust. I like the idea that small business success can be shared between entrepreneurs and their investors.

4. E-tailers Will Continue to Chip Away at Traditional Businesses - In 2011 online businesses hammered into "brick and mortar" companies' profits and this trend will definitely continue. One of my favorite parts of Aaron Sorkin's movie The Social Network was:

'Sean Parker: I brought down the record companies with Napster.

Eduardo Saverin: Uh, sorry. You didn't bring down the record companies. They won.

Sean Parker: In court?

Eduardo Saverin: Yeah.

Sean Parker: Do you want to buy a Tower Records, Eduardo?'

The internet truly evens the playing field among businesses. It is true that a kid in his dorm room can take down some of the most powerful companies in the world and Napster proved it.

5. My Name is Bond - In 2012, interest rates look to stay low thus there will not be a ton of plays with them, EXCEPT ONE: Tax-Free Municipal Bonds. Generally when the media is scaring you away from something, it is time to get in. I believe with all of the scary headlines about California going Bankrupt and local municipalities drowning in debt that this is one asset class that is undervalued. I figure that by investing in them, you can expect to see a 5-6% free!

6. Mobile Continues to Blow Up -When I think about how quickly I see the computer/internet world changing, I can't help but think of myself as a kid with a black and white TV along with a corded phone that had no call-waiting... and I'm not that old! Kids being born now may not even see a desktop computer in their life time. With the genius of Steve Jobs making a push on smart phones and tablets, marketing to these devices will be paramount in 2012.

Well that's it ladies and gentlemen. I fully intend to remind you how brilliant I am at the end of the year, so make sure to take action on these tidbits that I fed you... did I really just say that?

For the past 13 years I have been an entrepreneur investing and being active in real estate projects, private businesses, consulting, and small-cap public companies. I have made a living by making investments in different areas that I have felt would yield me the best return on my investment as well as utilizing investors to have projects come to fruition. I often have friends of mine ask me for advice on buy�ing their first home, where I think the next business opportunity will be, and even how to get started. I have written endless business plans and am what some would construe as a "deal junkie". I love coming up with new ideas, putting a plan together and putting the pieces together to execute them. We are still in a recession and I felt that this would be an excellent time to give my two cents to whoever wants to listen. I have started a blog for business and investing called Money Catapult so Google it and check it out.

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Bird Dogging

This is also referred to as being a property scout for real estate. Basically you do the leg work to find and broker real estate deals. Once you have a contract signed, (for a price) you assign it to an investor/buyer who has the funds to close the deal. For example, let's say you find a motivated seller (let's call her Anne) that has a property worth $200,000. Because Anne is anxious to sell, she is willing to sell the property to you for $120,000. You tell Anne that you would like to buy her property but you just need two months to come up with the cash. Anne says this is fine as she won't need the cash for two months anyway. You draw up a contract with Anne saying that she will sell the property to you for $120,000 and she will not accept any other offers during a two month time frame. You can make the contract official by placing $100 in an escrow account. Another thing you do is place two clauses in the contract. The first clause will state that you can get out of the deal if your business partner or advisor does not support it. This first clause gives you a way out if you can never come up with the money. The second clause states that the contract is assignable. What this means is that at any time during the two months, you can assign/give your rights to the contract to someone else. With contract in hand you find a real estate investor (let's call him Bill) or someone looking for a house.

You tell Bill that you have a deal on a property. The property is worth $200,000 but you have a contract that will allow you to get the property for $120,000. Bill already has a potential $80,000 equity and can keep the property or sell it right away for a nice profit. You tell Bill that you don't plan to buy the property but you can assign the contract to him for $5,000. Because you have done all the leg work and the property has the potential to make around $80,000, this idea would be appealing to Bill and he gives you $5,000, gets the contract and purchases the property. So you made $4,900 on an investment of $100.

Tax Lien Investing
With this strategy you can get paid to pay other people's taxes. If someone falls behind on their property taxes, you as an investor can pay the property tax amount and once the person gets caught up, you collect what they have to pay in penalties. In states like Texas, a delinquent person has 6 months to get caught up and once they get caught up they have to pay fines of as much as 50%. At least 25% of whatever they pay will go to you. For example, if someone had property taxes of $5,000, they would have to pay about $7,500 to get caught up. If you had paid $5,000 for that tax lien, you would be entitled to $1,250 or 25%. In the worst case scenario if the home owner never gets caught up, you are allowed to foreclose on the property.

The above are two alternative Investment Options which require little money to start but has huge potential of return on investment (ROI). You will need to acquire good knowledge in the field and spend good amount of time doing the research.

The article excerpt was taken from original article by Dale K Poyser. Dale has been investing for 11 years and has done meticulous research on various strategies that can add residual streams of income to your life.



The best investment strategy for 2012 and beyond will differ from the popular investment strategy offered by most investment advisers and financial planners today. The investment landscape has changed. Here's a strategy for making the best of it.

Invest Smartly

Most people know they need to start saving for retirement and other major life events. But they usually lack the time, energy or expertise to develop a grounded investing plan according to the market situation and to sift through the tens of thousands of investment options available. Diversification is the key for investing in 2012.

Enter The process of investing is made so incredibly easy that within five minutes of visiting the site they will have you set up with a fully diversified portfolio customized to your specific financial situation. They achieve this through low-cost, well-grounded, and automatically implemented financial advice designed for smart, busy people. Accounts are broadly diversified, regularly rebalanced—with the liquidity and simplicity of an online bank account.

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Invest in Currency

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This is one of the most promising investment options for 2012. News on Europe’s debt trouble and efforts to resolve it drives the global market. Investing wisely in Forex presents a perfect opportunity to make a good amount of money with moderate risk. If you have never invested in foreign currency or Forex, you need to learn the terms and techniques for Forex trading using a practice account.

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Gold and precious metal investing is on the rise and many investors are seeking information on the different options which may be available to them. Here are some of the vehicles you can use for buying gold as an investment.

Gold Coins
Gold bullion coins are a very popular way to buy gold. Buyers who are looking to make an investment they can actually take possession of and hold should choose gold coins. They are priced according to their weight, type, and rarity. If you choose this option you will need to consider the storage and security of these items since you will have the physical gold on premises. If storing securely is not an option you can pay for offsite storage. Many sellers offer this option for a minimal fee that is based on the value of your gold.

Gold Certificates
Gold certificates are another option of buying gold bullion without taking possession of the actual product. The seller will issue you a certificate of ownership representing the amount of gold purchased.

Gold Bars
Gold bullion bars are the most traditional method for buying gold and can be purchased through many banks, commodity brokers, and gold bullion sellers. These bars come in various weights with the most common being the 10 oz gold bullion bar. The purity of these bars is standardized between.995 and.999% purity. The largest of gold bars are the preferred investment vehicle for countries who purchase gold in large quantities.

ETF (Exchange-Traded Funds)
ETFs were developed in 2003 as a way to invest and trade the commodity without having the hassle of storing the actual product. Gold EFTs are traded on the major stock exchanges throughout the world and offer the investor and easy way to gain the precious metal in a more traditional trading atmosphere. It is important to know the various fees involved in this method of buying and selling gold as the certificates tend to decline over time due to broker and other associated fees.

Mining Companies
One final and non-direct way of investing in gold and precious metals is through the purchase of stock in mining companies. As gold rises the company's profits will also rise and those profits are passed onto the shareholder. This is often the least used method of gold investors as there are many factors to consider when choosing a good company.

Each investment serves a different purpose. Some for long term investment strategies and some are simply for short term gain. It is important to talk to a qualified seller/broker to determine the best investment options for you.

Deirdre J. is an Entrepreneur, Internet Business Newbie, Affiliate Newbie, Researcher, and Writer. You can hire her for your next writing assignment by visiting her resume page

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If you are unsure where to start with saving and investing we can help. Many people don't know where to start with their savings priorities and Investment Options. Following a "savings hierarchy" can help you learn where to start saving and investing. You can create a hierarchy that fits your own needs. Here are the steps in the savings hierarchy.

First, contribute as much as your workplace with match to your 401(k), 403(b) or 457 plan. Matched contributions are like "free" money, and you typically get tax-deferred growth and compounding returns. The sooner you start with this the better.

If your employer has a low contribution (less than 50%) and you have high interest rates on your credit card debt (25% or higher), you may want to pay this debt off first.

Second, pay down high-interest credit card debt. If your interest rate is higher than 9%, you should consider using some savings account money to pay down the balance of these accounts, starting with the highest interest rate first. While applying the most money to the highest interest rate card you should be making at least the minimum payments on the other cards to avoid extra penalties. Once one card is paid off, beginning applying extra money to the next highest interest rate. Do this until you are free from all high-interest debt.

Next, contribute the maximum amount to your workplace plan. This is more important than savings low-interest debt or tax-advantaged debt because you will need to save hundreds of thousands of dollars for retirement. Building up your tax-deferred savings early makes sense. Each year you can contribute up to $16,500 to your 401(5) and after 50 you can contribute up to $22,000.

Then, fund an IRA. Once you have maxed out your 401(k) contribution you may consider a Roth IRA or a traditional IRA depending on what you qualify for. The annual limit for contributions is $5,000 a year, or for people over 50$6,000 per year.

Finally start working on other savings goals. Have money transferred each month to a savings account for things like a child's college expenses or a down payment for a home. Make sure you look into tax-advantaged accounts like Coverdell Education Savings Accounts of 529 college savings plans. Learn more about finance and investing.

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A bear call spread is a type of vertical spread. It contains two calls with the same expiration but different strikes. The strike price of the short call is below the strike of the long call, which means this strategy will always generate a net cash inflow (net credit) at the outset.

The short call's main purpose is to generate income, whereas the long call simply helps limit the risk from possible assignment.

The profitability of the strategy depends on how much of the initial premium revenue is retained before the strategy is closed out or expires. As the strategy's name suggests, it does best if the stock stays below the lower strike price for the duration of the options.

Still, an unexpected rally should not provoke a crisis: though the maximum gain of this strategy is very limited, so are potential losses.


Looking for a steady or declining stock price during the life of the options. As with any limited-time strategy, the investor's long-term forecast for the underlying stock isn't as important, but this is probably not a suitable choice for those who have a bullish outlook past the immediate future. It would require an accurately timed forecast to pinpoint the turning point where a coming short-term dips will turn around and a long term rally will start.


A bear call spread is a limited-risk-limited-reward strategy, consisting of one short call option and one long call option. This strategy generally profits if the stock price holds steady or declines.

The most it can generate is the net premium received at the outset. If the forecast is wrong and the stock rallies instead, the losses grow only until long call caps the amount.


The chance to earn income with limited risk, and/or to profit from a decline in the underlying stock's price.

Max Loss

The maximum loss is limited. The worst that can happen at expiration is for the stock price to be above the higher strike. In that case, the investor will be assigned on the short call, now deep-in-the-money, and will exercise the long call. The simultaneous exercise and assignment will mean selling the stock at the lower strike and buying the stock at the higher strike. The maximum loss is the difference between the two strikes, but it is reduced by the net credit received at the outset.

Max Gain

The maximum gain is limited. The best that can happen at expiration is for the stock to be below both strike prices. In that case, both the short and long call options expire worthless, and the investor pockets the credit received when putting on the position.


Both the potential profit and loss for this strategy are very limited and very well-defined. The initial net credit is the most the investor can hope to make with the strategy. Profits at expiration start to erode if the stock is above the lower strike price, and losses reach their maximum if the stock hits the higher strike price. Above the higher strike price, profits from exercising the long call completely offset further losses on the short call.

The way in which the investor selects the two strike prices determines the maximum income potential and maximum risk. By selecting a lower short call strike and/or a higher long call strike, the investor can increase the initial net premium income.


This strategy breaks even at expiration if the stock price is above the lower strike by the amount of the initial credit received. In that case the long call would expire worthless, and the short call's intrinsic value would equal the net credit.

Breakeven = short call strike + net credit received


Slight, all other things being equal. Since the strategy involves being short one call and long another with the same expiration, the effects of volatility shifts on the two contracts may offset each other to a large degree.

Note, however, that the stock price can move in such a way that a volatility change would affect one price more than the other.

It is possible that the user may assign different volatilities to each of the strikes if they choose to solve for them.

Time Decay

The passage of time helps the position, though not quite as much as it does a plain short call position. Since the strategy involves being short one call and long another with the same expiration, the effects of time decay on the two contracts may offset each other to a large degree.

Regardless of the theoretical impact of time erosion on the two contracts, it makes sense to think the passage of time would be a positive. This strategy generates net up-front premium income, which represents the most the investor can make on the strategy. If there are to be any claims against it, they must be occur by expiration. As expiration nears, so does the date after which the investor is free of those obligations.

Assignment Risk

Yes. Early assignment, while possible at any time, generally occurs only when the stock goes ex-dividend. Be warned, however, that using the long call to cover the short call assignment will require establishing a short stock position for one business day, due to the delay in receiving assignment notification.

And be aware, any situation where a stock is involved in a restructuring or capitalization event, such as for example a merger, takeover, spin-off or special dividend, could completely upset typical expectations regarding early exercise of options on the stock.

Expiration Risk

Yes. The investor cannot know for sure whether or not they were assigned on the short call until the Monday after expiration. That creates risk. The problem is most acute if the stock was is trading just below, at, or just above the short call strike.

Say, the short call ends up slightly in-the-money, and the investor buys the stock in the market in anticipation of being assigned. If assignment fails to occur, the investor won't discover the unintended net long stock position until the following Monday, and is subject to an adverse move in the stock over the weekend.

There is risk guessing wrong in the other direction, too. This time, assume the investor bets against being assigned. Come Monday, if assignment occurred after all, the investor is unexpectedly short the stock, and its value may have risen in value over the weekend.

Two ways to prepare: close the spread out early, or be prepared for either outcome on Monday. Either way, it's important to monitor the stock, especially over the last day of trading.

Read full detail and check out the Position Simulator at