Morningstar Guide To Option Investing

Morningstar guide to option investing

Introduction
The Morningstar approach to options is focused on using company and economic fundamentals to interpret and estimate the value of the uncertainty around market prices, as reflected in implied volatility in the options market.

Long Stretches of Boredom
A veteran friend who fought in the Vietnam War once described his service experience to me as "Long stretches of total boredom, punctuated by sudden moments of abject terror." This seems an apt description of the markets lately, as long as one appends the phrase "...and brief interludes of giddy euphoria." 

Last week, we saw some moments of abject terror, whereas this week was more along the lines of total boredom with a dash of euphoria.

Investing Basics: Options

We are between quarterly earnings announcements in the United States, and into the post-Memorial Day summer trading months to boot, so news flow tends to be light.