Option Investor
Educational Article

A Brief overview of the Spread - PART II (Part II of II Parts)

Printer friendly version

In our continuing saga of the spread you will discover if you have not already that whether a novice or an advanced trader, it never hurts to be constantly reminded of the many various ways spreads can be utilized.

Again the names may be somewhat bizarre, but the actual strategies themselves offer sound and versatile trading savvy that can be used in just about every market condition at any given time. Some of these names you may be quite familiar with or at least have heard of before, others may have familiar sounding names, but their use eludes you. I would like to offer just a brief list of them to you along some hypothetical examples of these spread strategies and how they might be utilized in various situations.


***The energy stock that Buffett bought***

Warren Buffett, the "Oracle of Omaha," parlayed a modest grub stake into a $43 billion personal fortune . mainly by investing in ordinary companies with mundane products: soda, razors, sneakers, banking, insurance.

Because he is a major investor, Buffett is required by law to file a quarterly "Form 13F" disclosing all of his current holdings. Recently he plunked down almost $28 million to buy 659,000 shares of an oil company with proven reserves of 1.3 billion barrels of oil equivalent, as disclosed in his Form 13F filing.

With oil at $55 a barrel, those assets would have a street value of $71.5 billion. Yet the market cap is a small fraction of that, just $11.3 billion ... and Buffett has proven repeatedly that he knows a bargain when he sees one! For a FREE research report on Warren Buffett's #1 energy stock pick, click here now:


Options 101 Archives