Bull Call Spread

When your feeling on a stock is generally positive, bull spreads represent a nice low risk, low reward strategy. The easiest way to create a bull spread is using call options at or near the current market price of the stock. If the underlying stock is trading at $26, you could buy a 25 call and sell a 30 call.

Example

With DELL Trading at $26.85, you might buy one JUL 25 call and sell one JUL 30 call. By selling the 30 call, you lower your exposure, but you also lower your upside potential. You would have paid $2.95 for the 25 call and sold the 30 call for $0.50. In this case, your total cost-and the most you could lose-would be $245 ($2.95 x 100 - $0.50 x 100).

DELL trading @ $26.85
Buy	1 DELL JUL 25 Call @ $2.95	$295
Sell	1 DELL JUL 30 Call @ $0.50	($50)
Cost of Trade		$245

Your maximum profit is $255, the difference between the strike prices less the $245 you paid to put on the position. Even if the stock goes to 50, you still only stand to make $255 because while your 25 call is worth $25, the 30 call you sold is worth $20. To close the position, you would have to pay $20 for the 30 call when you sell the 25 call for $25. This limited upside is the price you pay for lowering your exposure (from $295 to $245) through the spread.

If you like the idea behind the bull call spread, be sure to check out bull put spreads and bear put spreads. These can be comparable strategies depending on your objectives.

Important

Before using Universal Broker's spread and combination one-step trading screens, options spread traders MUST understand the additional risks associated with this type of trading.

Protective Puts

With the market volatility we've seen over the past few years, more investors are recognizing the value of using puts as part of their everyday trading strategy.

For investors who put money in the volatile Internet or biotech sectors, the rewards can be enormous. But so can the risks--if the stock price rises instead of falls, this strategy may limit the upside potential by the cost of the put. By adding put options to their overall investment strategy, investors can better position themselves for any direction the market may head.

Using protective puts is simple and can be relatively inexpensive given the insurance value. For each 100 shares of stock you buy, buy one protective put at a strike price or two below the current market price. For example, if you buy a stock at $50, you'd buy either the 47.5 put or the 45 put. That way, if the stock plummets, you'll be able to sell the stock for close to what you paid for it.

On the other hand, if the stock jumps as you hope, you'll participate fully in the upswing less the small amount you paid for the protective puts. In this way, the puts act as an insurance policy.

Example

Let's look at AMGEN INC. (AMGN) trading at $50.66. It would take $5,066 to buy 100 shares. If you buy the shares, your downside risk, theoretically, is $5,066, with a potentially unlimited upside reward. Buying one protective put (to cover all 100 shares) limits the amount you can lose, should the stock fall.

To see how this works, consider the following:

AMGN trading @ $50.66
Buy	100 AMGEN INC @ $50.66	$5,066
Buy	AMGN OCT 45 Put @ $2.55	$255
Cost of Trade		$5,321

No matter how far the stock drops, as long as there is a protective put, the combined position will be worth $4,245.

Rolling Your Options

As the stock moves higher, you might want to roll the put up by selling the contracts you own and buying another one at a higher strike price. This way, you can lock in profit from the move higher. Too many investors have learned the hard way that what goes up rapidly can drop with equal momentum. So, if the stock jumps from $50 to $122, the 45 puts won't provide much downside protection. That's why it would be advisable to lock in profits by rolling the puts up to the 115 or 120 strike.

Knol

A few months ago, we announced a new web authoring tool called Knol.

Well, today we've announced its public launch, and we wanted to tell you a little bit more about it and how you might use it to complement your blog. Blogs are great for quickly and easily getting your latest writing out to your readers, while knols are better for when you want to write an authoritative article on a single topic. The tone is more formal, and, while it's easy to update the content and keep it fresh, knols aren't designed for continuously posting new content or threading. Know how to fix a leaky toilet, but don't want to write a blog about fixing up your house? In that case, Knol is for you.

Except for the different format, you'll get all the things you've come to expect from Blogger in Knol. Like Blogger, Knol has simple web authoring tools that make it easy to collaborate, co-author, and publish. It has community features as well: Your readers will be able to add comments and rate your article, and, if you want, they'll be able to suggest edits that you can then either accept or reject. And, just like in Blogger, you can also choose to include ads from AdSense in your knols to perhaps make a little money.

One other important difference between Knol and Blogger is that Knol encourages you to reveal your true identity. Knols are meant to be authoritative articles, and, therefore, they have a strong focus on authors and their credentials. We feel that this focus will help ensure that authors get credit for their work, make the content more credible.

All in all, we think Knol will be a great new way for you to share what you know, inform people about an issue that is important to you, raise your profile as an expert in your field, and maybe even make some money from ads

New Information from Blogger about SPAM

You knew that already, and now we do too. We have now restored all accounts that were mistakenly marked as spam yesterday. (See: Spam Fridays)

We want to offer our sincerest apologies to affected bloggers and their readers. We’ve tracked down the problem to a bug in our data processing code that locked blogs even when our algorithms concluded they were not spam. We are adding additional monitoring and process checks to ensure that bugs of this magnitude are caught before they can affect your data.

At Blogger, we strongly believe that you own and should control your posts and other data. We understand that you trust us to store and serve your blog, and incidents like this one are a betrayal of that trust. In the spirit of ensuring that you always have access to your data, we have been working on importing and exporting tools to make it easier to back up your posts. If you'd like a sneak peek at the Import / Export tool, you can try it out on Blogger in Draft.

Our restoration today was of all blogs that were mistakenly marked as spam due to Friday's bug. Because spam fighting inherently runs the risk of false positives, your blog may have been mis-classified as spam for other reasons. If you are still unable to post to your blog today you can request a review by clicking Request Unlock Review on your Dashboard.

New Information about Paypal in Indonesian

Hi everyone, I’m Vivian Hsiang, and I work on PayPal’s international products. I’m excited to tell you that PayPal is continuing to expand our presence around the globe. As you may remember, we recently announced PayPal’s expansion into 190 markets worldwide. We also added the ability to view PayPal.com in four languages including English, Spanish, French and simplified Chinese – allowing PayPal customers to shop online safely and easily in the language they prefer. New today, PayPal now offers account balance withdrawals to Visa-branded credit, debit, or prepaid cards in 26 international markets. This feature greatly improves the utility of PayPal accounts in these markets and is accomplished through an easy 3-step process.

This new feature is particularly valuable to PayPal account holders in markets where customers could use PayPal to send money, but had limited ways to receive or withdraw funds. A good example is Brazil. In the past, customers in Brazil could only withdraw funds via a paper check. Now, Brazilian account holders can withdraw money in a secure environment and have their funds available for online and offline purchases using their preferred Visa card.

It is also exciting for our Italian customers where local PostePay cards are widely used. The new withdrawal method gives them the freedom to easily move funds from their PayPal accounts to the payment cards they prefer to use online or offline.

This new functionality is available in: Argentina, Brazil, Bulgaria, Chile, Cyprus, Estonia, Gibraltar, Iceland, Indonesia, India, Israel, Italy, Latvia, Lichtenstein, Lithuania, Luxembourg, Malaysia, Malta, Philippines, Romania, San Marino, Slovakia, Slovenia, Turkey, UAE, and Uruguay.

At this time, only cards with the Visa or Visa Electron brands can be used.

Today’s news offers great opportunities for PayPal to become even more relevant to merchants in many of our international markets. We are constantly evaluating new functionality around the globe, so stay tuned and visit our PayPal Offerings Worldwide page for updates.

RESPONSE FROM INDONESIA

Hi Vivian, I am from Indonesia. I really happy with the news. At least we are from south east Asia specially from Indonesia can more productive in Internet Business with Paypal. By the way, can you please inform me, which Indonesian Bank that can be approved to their debit card?
Thanks.
Best regards,
Andi