Emerging Markets: Strong Dollar & The Path to Emerged Markets

How do you value pieces of paper? What creates currency? What makes the dollar a reserve currency?

There are several different models used to value currency, including Purchasing Power Parity and the BEER (Behavioral Equilibrium Exchange Rate) model, amongst others. There are several variables that go into those models, most notably conditional expectations, current rates, term premiums, national savings/investment, demographics, and interest rate differentials.

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Trading Naked: How to Cover Your Assets

I recently had a conversation with a good friend of mine. Our friendship blossomed when he talked about puts one day in our Applied Investments class. My head whipped around to locate the person that was finally speaking my language, and once we did the options trader secret handshake, we became fast friends.

One of our more recent conversations surrounded the economics of options – He said that basically, if you’re on the sell side of a naked option, your margin requirement (collateral) is going to be pretty high.

But I disagree.

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Smart Money: The Poor Man’s Covered Call

In my most recent blog post, I talked about shorting/selling a call, aka a covered call. This technique is used as a way to reduce cost basis against shares held, and can also be used as an income generation technique for larger accounts.

However, not everyone has a large account (I definitely don’t). So what are some alternatives to going long on 100 shares and selling a call against it?

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