A $10000 Options Trading Plan

Looking for somewhere to invest $10,000? If so, you came to the right place. Here’s a $10,000 trading plan using options put together by Richard R for Seeking Alpha. He suggests a long trade with Telefonica Movistar and a short trade with the SPY.

One thing that really impressed me it that he personally is long TEF and short SPY call spreads. You don’t usually see that. Most “experts” that suggest trades don’t have or plan to have the trades on they suggest.

But as I always say, do your own due diligence before jumping into these trades. Just because he believes in his suggestions doesn’t mean he’s right. We all think we’re right when we put on a trade.

The Fundamental View

We live in interesting times, watching historic events unfold around the world. Wars are terrible, but currency wars are a more subtle way of financial fighting between Europe, US, China and Japan.

The fundamental view shared by many regarding US markets is that they are now decoupling from European markets, leaving them with great daily swings around rumors from the “Grexit”, which would be good or bad depending on how you look at it.

Pros and cons of the Grexit

The Greek exit would be good because it eliminates the weakest link from the Euro, thereby strengthening it against all other currencies. Greece would be left with the drachma, slowly recovering from its depression by making its exports and travel industry cheaper, and it looks now like it´s the best for both Greece and Europe.

The bad news regarding the Grexit is that it creates uncertainty around “who´s next” to exit the European Union, and the credit markets point to both Italy and Spain, the remaining PIIGS, by making its debt more expensive and unsustainable.

As economics turn to politics, and politicians control the economy (and know very little about it), they are stuck between a rock and a hard place between choosing either option, so they will…

Go to Seeking Alpha for the rest of the article.

Option Trading Secrets

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