InvestEd 2015: An Historic Location
July 2014 Webinar: Options Part 1
How to Create a Relative Price Chart
Richmond VA, June 12-14, 2015
Westin Richmond Hotel
Visit one of our nation's most historic cities!
Attendees will enjoy a first-class investor education experience that includes a wide-ranging curriculum, interesting corporate presentations, an educational and fun-filled Cyber Cafe, comfortable accommodations, and five full-course meals. At $119 plus tax per night, free parking, and free in-room Internet access, the Westin Richmond is the perfect place for a great InvestEd conference. Come early, stay late, and enjoy all this historic area has to offer. Mark your calendar now, and check the InvestEd website throughout the year for the unfolding conference program and registration information.
Please join us in Richmond VA for InvestEd 2015. Richmond International Airport (RIC) is the local airport, and we have negotiated discounted airport-hotel transportation with James River Transportation.
InvestEd Inc. Free Webinar
Options Part 1
Sunday, July 27, 2014
8:00 PM-9:00 PM ET / 5:00 PM-6:00 PM PT
Instructor: Saul Seinberg
Beginning in July, Saul Seinberg will present a series of five webinars dealing with options. The series is designed to help investors with little or no option knowledge or experience get started with using options properly in their investment efforts. Investors should note that "proper" use of options is a function of an individual investor's knowledge, experience, risk concerns, and investment goals, all of which will be addressed in this webinar series.
The webinars will begin this month and end in November. The major topics to be covered in these five sessions are noted below. However, if you don't see a topic identified that you'd like to learn more about, please email and tell us. Saul will let you know if your topic already will be included, even though it might not have been mentioned, or if your topic can be added to the content of one of the sessions.
July's webinar will include an introduction to options, basics of derivatives, differences between options and stocks, option chains, role of commissions, use of options, and buying and selling options. The intent for this month’s session is to start with the basic building blocks of options and to take the mystery out of option trading.
The August webinar will find Saul discussing option analysis, along with opening and exit strategies, option risk vs. stock risk, the Greeks, using probability, and selecting an underlying. The topics will introduce the option newbie to the basic elements of creating and executing an opening trade.
The September webinar will include a discussion of repair strategies, along with a description of LEAPs and information about LEAP strategies and the use of LEAPs as a surrogate for stock ownership. Repair strategies are used to adjust an option trade that has moved against an investor, with a goal of improving that trade. LEAPs are worthwhile long term option opportunities that blend both short term option and stock ownership characteristics.
In October, Saul will discuss spreads, limited risk, credit or debit spreads, and tradeoffs to single option strategies. In return for reduced profit, spreads offer defined, limited risk option opportunities. Spreads are a very popular form of option trading that have lower capital requirements and attractive diversification opportunities than ordinary option trades.
The final webinar in November will be a simulated trading session, including selection of underlying(s), applying appropriate strategy, entering an order, and managing an option trade in accordance with anticipated and actual movement of underlying and market. This simulated session will be helpful in bringing many of the prior webinar elements together.
Register now to attend the InvestEd Inc. free online investor education webinar. Space is limited.
Saul is an InvestEd Inc. advisory director and a conference instructor. A former vice president for education of InvestEd, he teaches at local through national investor education events. With degrees in electrical engineering and law, Saul spent most of his career as a corporate attorney. In addition, he served as an adjunct professor at Albany Law School in New York.
How to Create a Relative Strength Chart
Relative strength charting tools are available on the free side of the StockCharts.com website. This article describes how to create relative strength charts similar to the ones used in the three-part article, Utilize Relative Strength to Manage Portfolios: A Buy High, Sell Low Strategy. You may read Part 1 of this article in the March newsletter. Part 2 and Part 3 are linked from the previous articles.
You may recall that the relative strength calculation is a simple ratio calculation where the value of one financial item is divided by the value of another financial item. A helpful way to view relative price performance strength between two securities is to create a chart display that includes small price charts for each of the two securities being compared alongside a larger price relative chart that shows comparative price strength between those two securities. This is a good practice to follow because the layout facilitates trend line analysis for the individual securities as well as for the relative strength line. It also lets an investor see how the individual financial items are behaving.
At the StockCharts.com website, choose SharpChart from the Create a Chart dropdown, and type a ratio ticker symbol into the parameter box. A ratio ticker symbol is created by separating two ticker symbols with a colon. The first ticker symbol becomes the numerator, the base security. The second ticker symbol becomes the denominator, the comparative security. Please note that no space should be included after the colon.
The screenshot below shows the ratio ticker symbol $SML:$SPX, which lets you examine the price performance relationship between the S&P 600 Small Cap Index ($SML) and the S&P 500 Large Cap Index ($SPX). In this example, $SML is the base security and $SPX is the comparative security. After you type in a ratio ticker symbol, press Go.
A new page will appear with default settings as shown below.
Notice in the chart above that the ratio ticker symbol you entered appears in the Symbol box at the top of the screen capture. Once on this page, you may choose to change the ticker symbol to another ticker symbol. For example, to compare Lowe's price performance to Home Depot's price performance, you would enter the ratio ticker symbol, LOW:HD.
To design charts like the ones used in the Utilize Relative Strength to Manage Portfolios: A Buy High, Sell Low Strategy articles, you need to change the default settings.
- A three-year weekly chart provides a meaningful time frame for a relative strength study and eliminates some of the whipsaws that you would see on a daily chart. Set Periods to Weekly by clicking on Weekly within the dropdown list of choices for the Periods field. Choose Predefined Range from the dropdown list of choices for the Range field. Finally, set Years to 3 by selecting 3 from the dropdown list for Years.
- Set Type to Solid Line (thick) by clicking on that choice in the list of choices provided by the Type dropdown to change from the default Candlesticks depiction which does not lend itself well to relative strength charts.
- Set Color Scheme to Graphite or to a color scheme that suits you. A nice feature about the Graphite color scheme is that a variation in shading visually separates years.
- Set the Volume indicator to Off by selecting Off from the dropdown list of Volume indicator choices.
- Remove the checkmark for Color Prices by clicking into the box to the left of the Color Prices label.
- Remove the checkmark for Y-Axis Labels by clicking into the box to the left of Y-Axis Labels.
- Change the settings in the Overlays section to None by choosing None from the Overlays dropdown box.
- Set up the first indicators row. Replace the RSI indicator on the default chart with the Price indicator. Choose Price by clicking on Price from the Indicators dropdown box. Type in the ticker symbol of the first item of your ratio chart ticker symbol. In this example our ratio ticker symbol is $SML:$SPX, so $SML is entered into this Price indicator field. Choose Above as the Position. This will place the Price indicator for the ticker symbol you entered above the ratio chart.
- Set up the second indicators row. Replace the MACD indicator on the default chart with the Price indicator. Choose Price in the second Indicators row by clicking on Price from the Indicators dropdown box. In the Parameters field on the second row type in the ticker symbol of the second ticker symbol within the ratio chart's ticker symbol. In our ratio ticker symbol example of $SML:$SPX, the second symbol is $SPX. Set the Position field to Above.
- Press any of the Update buttons to update the chart with your selections.
- To create a reusable link that contains all of the parameter settings for the chart you designed, follow these instructions.
- StockCharts' Annotate feature enables you to draw lines and annotate a chart. It is a helpful tool to use when studying charts. Documentation for the Annotate feature is here.
- Important to note is that interpretation of the relative strength line is easily within the capability of even the newcomer to chart analysis. If the line is sloping up in any section of the chart, the numerator is doing better pricewise than the denominator. If the line is sloping down in a specific chart section, then the denominator is outperforming the numerator. And if the relative strength line is flat or only sloping a bit, then the two items are performing about the same.
Happy and profitable relative strength charting to you.
Sharon developed InvestEd's online webinar education program. She contributes to two stock study groups within her community and has invested in the stock market for more than 30 years. She holds a BS in Computer Science/Accounting from the University of Central Oklahoma and an MBA from Oklahoma City University. Professionally, Sharon is a retired software developer who designed and developed domestic and European point of sale software solutions for a large car rental company. Her hobbies include drawing and painting, along with enjoying nature, hiking, reading, and gardening. She loves to travel and is interested in learning how history and geography shape people, cultures, and the world.
Freelance technical writer Greg Shultz shares some ideas about keeping our Windows computers working well. The new Windows Update Cleanup feature is standard in Windows 8 and was an October 2013 update add-on to Windows 7. By removing bits and pieces of outdated Windows updates we no longer need, Cleanup helps us regain some hard disk space. The techniques identified in this article work with Windows 7, Windows 8, and Windows 8.1 systems.
The Disk Cleanup tool lets us clean out unnecessary files that clog our hard drive. Simply go to the Start Menu or Start Screen and type in: Disk Cleanup in the search box. Those with more than one hard drive will want to select drive C.
After bringing up the Disk Cleanup tool, the amount of space you will be able to recover will be calculated. As you can see on the image, sometimes the scan to determine files you may delete to recover space will take a little time, depending on the amount of hard drive space and the number of files on your computer.
After the completion of the space analysis, you will see the image on the right.
This pop-up lists all of the categories of files on your computer and which ones could be deleted to retrieve more space. Across from each category of files is an indication of how much space is used, and below that is the total amount of space you can gain by removal of unnecessary files. The files with a check mark in the small box are unnecessary files and may be deleted without consequence to the operation of your computer.
When your cursor is on a particular file, such as Downloaded Program Files, you will see a description of what is included in that file. This will help you determine whether or not you wish to delete that category of files. More information about this process and a table of file descriptions may be found in an article at Tech Republic.
By clicking on View Files you will be able to see all files in that category. Of course, you may delete individual files by simply right clicking on the file and selecting Delete. You may choose to delete some files and not others.
With appropriate categories selected for deletion, click the Cleanup system files button. At that point, after confirming that you do want the deletion to be final, files in those categories will be removed, and after a reboot of your system, your hard drive space will improve.
More information about the Disk Cleanup Wizard for Windows 7 is in a Microsoft support article. Users of Windows 8 will want to check out Help Desk Geek for more information about running the Disk Cleanup feature.
Sandy is an InvestEd Inc. director and serves as secretary. She is lead editor and prepares the general program brochure for the InvestEd conference. Sandy, an O'Hara Award recipient, is a former charter member and president of a local investment club. She has helped form investment clubs, presented introductory investing programs, and taught stock study and mutual fund classes at local, regional, and national events. Sandy is professor emeritus, Georgia Southern University.
Questions? Contact InvestEd
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