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The Yummies are Causing the All-Time Stock Market Highs

Many have wondered why the stock market continues to make all-time highs, almost every day. This exceptional rise may be due to the Yummies, the Young Upwardly Mobile Millennials. Yes, the Millennials, also known as Generation Y. Many traits have been ascribed to this generation, but you don’t ever hear the members referred to as being invetor-oriented.
So let’s look at the facts. Legg Mason Global Asset Management, the 20th largest asset manager in the world, produced the 2017 Global Investment Survey, and the Summary of U.S. Results are very enlightening.
For example, did you know that Millennials invest more in non-cash investments than the Generation X or the Baby Boomers? As a matter of fact, 77% of Yummies apply their funds toward these assets, versus 75% for Gen x and 69% for Baby Boomers.
Let’s look at some definitions before continuing. Legg mason consideres Millennials to be between the ages of 18 and 35, Gen X at age 36 to 52, with Baby Boomers ranging from 53 to 71 years old.
Some other interesting factoids about the Yummies. They invest three times as much as Boomers in non-traditional investments. Plus, a far greater percentage of Yummies put their money into investment real estate than the Baby Boomers.
But what is most amazing is the fact that 11% of the Yummies invest in gold and precious metals versus only 7% of the Gen Xers and a measly 2% for the Baby Boomers.
When the respondents were asked which investment categories they believe offer the best opportunities over the next 12 months, 46% of the Yummies said domestic stocks, with Gen X and Boomers closely agreeing, both at 42%. International stocks came in second as an investment opportunity in the opinion of the Millennials.
Finally, 87% of Yummies have saivings, investments, or both but only 81% of Boomers have these assets, and just 75% of Millennials.
Many wonder why the FAANG stocks, Facebook (FB), Apple (AAPL), Amazon (AMZN), Netflix (NFLX), and Google (GOOG), continue to rise. So now you know. If you are wondering who is driving up the price of stocks and cryptocurrency, you need look no further than the Yummies.
by Fred Fuld III

Disclosure: Author owns AAPL and AMZN.
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Two Basic Options Strategies Every Trader Should Know

Options trading opens up an entirely new world of profit (and loss) potential. Unlike stocks, options give traders the flexibility to deploy different strategies in the market and bet on the future direction of securities without being bullish or bearish. 

When one buys a specific stock, they naturally want the stock to appreciate in value. Similarly, when one sells a stock, i.e. shorts a stock, that person wants the value of the stock to depreciate. 

But what if a stock goes neither up nor down? What then? This is where the beauty of options trading comes in. 

Strategy #1: The Iron Condor

The iron condor is one of the most famous options trading strategies in the entire world; it also has a pretty cool name!

Essentially, an iron condor is a bet that a stock will move minimally up, minimally down, or not at all. As time passes, iron condors will produce a profit due to theta decay, also known as time premium.

At its core, an iron condor involves selling a put option and selling a call option while simultaneously purchasing a further out-of-the-money put option of a different strike and purchasing a further out-of-the-money call option of a different strike in the same options expiration series. 

The risk for an iron condor is always limited to the difference between the put options contracts and the call options contracts minus the premium received for placing the trade. 

If a trader opens an iron condor, and nothing happens in the underlying stock, anyone who is long or short the stock will not have made any money, but the iron condor trader will have collected some nice option premium and have a decent profit when all stock holders are flat!

Strategy #2

The long put option is a timeless options trading strategy as well. Since the early 1970s, investors and traders have purchased puts on stocks, indices, and currencies to protect their long positions and hedge their bets. 

Puts can be purchased in the money or out of the money. The only key thing to know is that out-of-the-money puts are always cheaper than in-the-money puts because they have more leverage and a higher probability of expiring worthless. 

In order for long puts to be profitable, the stock for which the puts were purchased must decrease in value. Although long puts can appreciate with expansions in volatility, nothing sends the price of a put soaring like a market crash. 

Final Thoughts

Solely trading iron condors and long puts will almost certainly not turn the average trader into a millionaire overnight, but there's no doubt that traders have made many fortunes with iron condors and puts in the past. 

Knowledge is power, and in the dog eat dog world of the stock market, the more strategies and concepts that you know, the better. Just by being aware of what these two options trading strategies are will put you ahead of the masses. 
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