Invest and Trade Profitably with Jon Johnson

Education Center

What do you do when you have written calls on one of your holds, but it then does something unexpected and rises (e.g., a stock split announcement)? Is there an escape hatch?

August 30, 2000

There are three things you can do (there may be more that we just have not figured out yet): 1) buy them back if you have no time and want to keep the stock; 2) roll out to the next month and hope the stock drops; 3) a hybrid. One thing we always do is […]

We have received many questions concerning selling calls on long-term holds in order to generate cash for more purchases (or just for cash!) without losing the stock.

August 30, 2000

This can be done, but you have to get to know your stock and you need to know the market. We keep you up on the market’s moves and where it is going. You need to know the resistance and support levels of your stock, its average volume, how far it tends to run on […]

What happens if you do not have enough cash?

August 30, 2000

You can buy some of them back with the cash you have and let the rest go, roll out to the next month, or do a combination of buying some back and rolling others out. Rolling out involves buying the calls back and then selling the next month out at the same strike price or […]

How do you gauge good buying volume?

August 30, 2000

If the market is rallying, if volume is on pace to eclipse the previous day’s volume, that is good buying volume. The same can be said about an individual stock if it is on the way to beat average volume. If volume is below average, that is usually not considered good volume.

Why do you wait to buy stocks until they rise to a certain point? Wouldn’t it be better to buy that stock at the lower price it is trading at, thus getting the benefit of all of the move up?

August 30, 2000

A lot of the stocks we are looking at are developing into good plays. While we may like the move we are seeing, until the stock proves that it is going to make the move, it is subject to failing. We watch for signature patterns that we like. These have proved themselves over and over […]

After a stock announces a split, is it better to buy before the actual split or after the split?

August 30, 2000

Stock splits are great ways to tilt the odds of winning in your favor. We love them. We love to play stocks as they approach their splits as we have found that stocks frequently have a ‘pre-split’ run into the actual split. While stocks often gyrate back and forth after an announcement as buyers run […]

What tools do you use to analyze stocks and the market?

August 30, 2000

Charts, news, historical trends, apparent future trends. Specifically, we look at price/volume action on charts as our primary indicator of where a stock is going after we have looked at a stock’s basic fundamentals. For our long term purchases, we want a leader that looks as if it will continue to lead, has good earnings […]

With respect to 10-baggers, are you referring to past 10-baggers or for the future?

August 30, 2000

We are looking to the future, though many of the up and comers are already well on the way.

Do you use a form to track your trades?

August 30, 2000

Yes. We also use the computer by virtue of our real-time service. We always keep our current plays on the real time service. We can put our portfolio of plays that shows the entry price, commission, etc.; what the current price is; profit/loss. We track them, however, with the quotes part of our screen, keeping […]

Should I have a real-time service?

August 30, 2000

For us, we could not function without real-time. No broker could tell us everything we need to know fast enough so we could act. We could have a list of twenty plays, and by the time we had information on five of them the window would be missed. For precision in entry, it is hard […]

Log In

Forgot Password