Taking profits after the bull run: The volatile world of traded options is explained with money-making strategies. But options are risky
Article Abstract:
Recent bullishness in equity prices could be destroyed as weak company profits cannot often justify high valuations. The position in the June 5000 calls (1,230p) on the FTSE 100 index (6100) should now be moved into the June 6000 calls (615p). The inclination is to remain bullish as valuation will probably become even more extreme over the year. Glaxo Wellcome (2,310p) has seen an upward run and the recommendation is to sell half the position. Also, with British Telecom (990p), taking half the profit available is suggested.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1999
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A question of perspective
Article Abstract:
The main concern on stock markets in the UK and the US at present is the future direction of interest rates, with short rates widely predicted to rise further in both countries. The PE multiple of non-financial concerns still appears vulnerable, and the scope for increased profits will start to be restricted as wages take a greater share of income. There is considerable downward pressure on the market, but this is being balanced out to a certain extent by strong takeover activity.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1995
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The heart of darkness within volatility: Wall Street's volatility is a sign not that investors are irrational but that the outlook for the market is genuinely uncertain
Article Abstract:
The Dow Jones index has been volatile since October but research indicates that such volatility may be quite rational. Mordecai Kurz of Stanford University builds on the rational belief equilibrium theory, forming beliefs about the possible path that dividends will take. Such beliefs can be rational as they are consistent with the facts, but as there are so many potential beliefs, share prices may be extremely volatile.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1999
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