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About SENTIMENT

Welcome to the third issue of SENTIMENT, smart options for today's investor, a new quarterly magazine devoted to options trading. In our first two issues, we told you about several interesting trading strategies for options investors, including pairs trades, iron trades, and vertical spreads. We started a series on Bernie Schaeffer's groundbreaking methodology for market analysis, Expectational Analysis ®. Sprinkled throughout the first two issues were additional features about technical analysis tools, a market forecast by Bernie, and many other rewarding and educational articles for the options trader. We're excited to offer you another issue of smart, timely articles that should help make your trading more profitable and more enjoyable. See below for a quick review of the highlights of our fall edition. You may already be familiar with Bernie and his team of analysts through such vehicles as the Option Advisor newsletter and our award-winning Web site, SchaeffersResearch.com. The new magazine now gives us the opportunity to serve our readers in even more ways. Please enjoy the third issue of SENTIMENT Magazine.

We want to hear what you think about our new SENTIMENT magazine. Please send any comments, questions, or story ideas to Sentiment@sir-inc.com

There are times when directional opportunities abound, but conditions aren’t right for straight calls and puts. The long vertical spread -- also known as a debit spread -- offers a unique alternative to trading your bulls and bears without the risks associated with higher market uncertainty. How so? The vertical debit spread is a relatively conservative option strategy that profits from a directional move in a stock, using much smaller amounts of capital than an outright stock purchase. Plus, Schaeffer's Take: how we like to trade verticals.

Key events like earnings offer explosive opportunities for option traders to make big profits in short periods of time. But however predictable their dates are, keeping a keen eye on investor sentiment and mitigating your risks is still key. One fascinating aspect of trading around known events is that even though they can have an explosive impact on a stock or on the market, you as a trader can plan your strategy in advance and execute it just before the event is scheduled to occur. This means that you can position yourself to achieve big profits in a very short time period—often in less than a full trading day.

Fundamental and technical analysis are the main pillars of modern security analysis as practiced by Wall Street institutions and investors. In part 2 of this series, we look under the hood of fundamental and technical analysis—two of the three main components of Schaeffer’s core method. Despite a general belief that they don’t mix, we beg to differ. Nonetheless, it’s interesting to note that fundamental and technical analysts can look at the same set of data and arrive at completely contradictory conclusions -- and that's where Expectational Analysis comes in.

Regular features in every issue of SENTIMENT include The Sentiment Report, a quarterly market roundup; the Idea Lab, an examination of technical analysis tools; Ask Bernie, with Bernie Schaeffer answering some of the most commonly posed questions by traders; and .COM, featuring the "best of" recent commentaries and blog posts on SchaeffersResearch.com.