Stock Options: Making Money Still Possible in a Volatile Market

After the last 12 months, investors have a greater understanding about the risks involved with investing in stocks. Perhaps we have all realized that we do not have as much tolerance for risk as we thought we had.

In particular, those nearing retirement have gained renewed appreciation for owning fixed income investments and living debt free. Some maybe questioning whether stocks should be included in their investment portfolio at all, which I would answer yes, but that's an issue for another day.

So how can one go about making money or preserving what he or she has in a volatile market like the one we are witnessing today? Investors should consider using call and put options or structured notes to help reduce the risk of their current investments through broader diversification, and to potentially increase returns.

Call and put options can be used to either speculate on the moves in the market or to hedge your investments against a decreasing market. A call option gives you the right, but not the obligation, to buy an investment in the future at a price agreed upon today. Conversely, a put option gives you the right, but not the obligation, to sell an investment in the future at a price agreed upon today. Call and put options have been used by stock market investors essentially since markets first came into existence.

Structured Notes are prepackaged investment products that use puts and calls to hedge and/or speculate on stock market moves. Investors should consider investment strategies that are designed to reduce your investment risk and be additive to investment returns.

News Source - Click Here for Read Full News

GLOBAL MARKETS - Asia stocks slip, drop limited after U.S. data

Asian stocks retreated on Friday and the dollar edged up after a disappointingly big drop in U.S. employment prompted investors to pull back from commodities, resource-linked shares and higher-yielding currencies.

But the equity market decline across Asia was limited as the report showing that U.S. companies slashed nearly half a million jobs in June did not shake hopes that a slow recovery is under way.

The Australian dollar, whose 12 percent surge against the U.S. dollar this year has been closely tied to the four-month rally in stocks, edged up as the U.S. payrolls report had limited fallout.

Analysts at Rabobank said the U.S. jobs report was a "reality check" for investors who had become overly optimistic about how quickly the global economy could recover from its deepest recession in decades.

Oil and copper extended their slide. U.S. crude struck a one-month low and was down 27 cents a barrel at $66.46. Government bonds jumped, with the benchmark Japanese 10-year yield touching a three-month low.

"Share losses were limited as investors here did not necessarily take it as a sign of a further slowdown of global economies. Belief that economic fundamentals are near their bottom is still firm here," said Won Jong-hyuck, a market analyst at SK Securities in Seoul.

The MSCI index of Asia-Pacific shares outside Japan dipped 0.6 percent and was down about 1 percent during the first three trading days of the third quarter.

In the April-June quarter, the MSCI benchmark for Asian shares surged 32 percent -- its biggest quarterly gain since 1993 -- on investor hopes that Asia's emerging economies would help lead the global economy out of the doldrums.

Japan's Nikkei average shed 1 percent, dragged down by a 6.3 percent slide in Seven & I Holdings when the operator of department stores and supermarkets reported an unexpected drop in quarterly profit. Shares of oil distributor Nippon Oil lost 2.6 percent.

Asian stocks held up relatively well after the U.S. S&P 500 slid 2.9 percent on the jobs data. U.S. markets are closed later in the day in observance of the Independence Day holiday on Saturday.

In currencies, the dollar edged up as investors favoured the greenback as a safe haven while positions in riskier currencies and assets were cut.

The dollar index, a gauge of its performance against six major currencies, edged up slightly to 80.324 .

The euro slipped slightly to $1.3990 from near $1.4003 in late New York trade, down from a one-month peak near $1.42 hit earlier in the week and hit by hedge fund selling before the long U.S. weekend. The dollar was little changed at 95.96 yen .

The worries about the recovery outlook added fuel to gains in government bonds.

The 10-year JGB yield was down 2.5 basis points at 1.330 percent, with some buying spurred after an auction of the maturity found solid demand the previous day despite a bigger monthly amount to help pay for stimulus spending.

But Japan's low yields have prompted domestic investors to go abroad in search of higher returns.

Data from the Ministry of Finance on Thursday showed domestic investors snapped up 1.53 trillion yen ($16 billion) of foreign bonds in the weekend ending June 27, the biggest such weekly purchases in four years. Analysts said those purchases were mainly concentrated in U.S. Treasuries.

Benchmark U.S. Treasury yields are about 2.2 percentage points above JGB yields, holding near the widest such level in eight months and making them attractive to Japanese investors.

News Source : GLOBAL MARKETS - Asia stocks slip, drop limited after U.S. data

BSE Sensex volatile ahead of economic data

The BSE Sensex see-sawed in early trade on Thursday as investors awaited key economic data later in the day that could outline a roadmap for economic policy measures.

State-run oil firms led by Oil and Natural Gas Corp were key gainers after India unexpectedly raised gasoline and diesel prices, while Reliance Industries was weak over uncertainty on a gas supply deal with a former group firm.

The index opened up higher but quickly slipped to negative territory.

"Caution is visible in the market trend. There has already been a strong run-up, and that is weighing. Nobody is willing to hold onto large positions," said D.D. Sharma, senior vice president at Anand Rathi Securities.

"The real direction for the market will only come after the Budget," he said.

The annual economic survey is expected to be presented in Parliament around noon (0630 GMT) and could be an indicator to the policy direction to be outlined in the budget next week.

Investors expect the government to unveil pro-reform measures in the budget such as a auction of third-generation wireless spectrum and stake sales in state firms to raise cash.

Oil firms led the gains on hope of easing subsidy burden incurred from selling products at discounted rates. On Wednesday, the government raised petrol and diesel prices by as much as 10 percent, the first increase this year.

ONGC shares were up 4.2 percent at 1,096.85 rupees, oil marketing firm Indian Oil Corp rose 3.1 percent to 558 rupees, Hindustan Petroleum Corp gained 2 percent to 317.50 rupees, while Bharat Petroleum Corp added 1.2 percent to 459 rupees.

Top aluminium producer Hindalco was up 1 percent at 84.25 rupees after lenders agreed to relax terms of a $982 million bank loan. The stock had slumped on Wednesday after it reported profits fell sharply in 2008/09.

Among key losers, Reliance Industries was down 0.4 percent to 2,052 rupees after it said it would appeal to the Supreme Court against a ruling to enter into a gas supply deal with former group firm Reliance Natural Resources Ltd on unfavourable terms.

Shares of auto firms were also weak on worries over higher fuel prices hitting demand for vehicles. Auto stocks had rallied on Wednesday as data showed most brands posted strong monthly sales growth.

Top car maker Maruti Suzuki was down 1.4 percent at 1,055.55 rupees, largest vehicles maker Tata Motors slipped 0.9 percent to 296.50 rupees, while two-wheeler maker Hero Honda fell 0.8 percent to 1,387 rupees.

Weekly inflation data, also expected around noon, is also in focus. A Reuters poll of analysts forecast the wholesale price index to have fallen 1.35 percent in the 12 months to June 20

In the broader market, 1,244 gainers outpaced 697 losers on average volume of 93 million shares.

The 50-share NSE Index was up 0.1 percent at 4,295 points.

TOP 3 STOCKS BY VOLUME

* Jagran Prakashan on 5.7 million shares

* NIIT on 5 million shares

* Satyam Computer on 4.1 million shares

News Source - Click Here for Read Full News