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9 Weeks to Better Options Trading: Special Situations: Earnings Reports, Takeovers, and Extreme Market Moves

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Veteran options trader Steve Smith breaks down special situations.

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One example of this came back in January, when JC Penney (NYSE:JCP) shares jumped some 25% on the announcement that Ron Johnson -- the brains behind the Apple Store (NASDAQ:AAPL), gush gush -- was taking over. He may be a genius, but the stock was clearly pricing in a lot of good things that would take some time to play out. Selling call spreads proved to be a safe and simple way to fade the news.

Wrapping It Up

I thoroughly enjoyed writing up this series, and I hope it proved helpful as an introduction to the versatility of options.

More importantly, I hope it sparked even more questions and interest in learning about options, and I look forward to your feedback so I can build on this series over time.

In the meantime, if you have any questions regarding options or feedback on the series, feel free to drop me a line.

Here is a complete index for the 9 Weeks to Better Options Trading Series:

Week 1: 5 Rookie Mistakes Options Traders Make

Week 2: Option Pricing Basics: Understanding Implied Volatility and Time Decay

Week 3: Trading Strategy: The Power of Calendar Spreads

Week 4: Trading Strategy: Butterfly Spreads

Week 5: Trading Strategy: Iron Condors

Week 6: Trading Strategy: Risk Reversals

Week 7: Trading Strategy: Back Spreads

Week 8: Managing Risk

Week 9: Special Situations: Earnings Reports, Takeovers, and Extreme Market Moves

For more from Steve Smith, take a FREE 14-day trial to OptionSmith and get his specific options trades emailed to you along with exclusive access to his full portfolio. Learn more.

No positions in stocks mentioned.

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