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George Acs

 
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  • Profit Catalysts During The August Blues [View article]
    Can't disagree with either of the three different thoughts in the two paragraphs, except that I think that you might just be right about the first two.
    Aug 13 12:32 PM | Likes Like |Link to Comment
  • Profit Catalysts During The August Blues [View article]
    Sequester 2 is on the cards, we just have to survive summer.
    Aug 12 08:06 PM | Likes Like |Link to Comment
  • Profit Catalysts During The August Blues [View article]
    Well, that makes more sense. You can blame it on auto-correct.

    If you make your living selling options it would be wonderful to see volatility return, despite knowing that it means it drop in markets.

    It was funny how about 10 weeks ago everyone was so excited about the VIX jumping past the 50 day moving average and using that technical metric as a signal of a sell-off.

    You remember, right? It was the one that never came and instead volatility quickly dropped well below that 50 DMA and still sits there, yet the (inverse) correlation with the overall market has been absent.
    Aug 12 05:46 PM | 1 Like Like |Link to Comment
  • Profit Catalysts During The August Blues [View article]
    No doubt that volume will go up beginning September 3rd. What direction the market goes, before or after that date is probably still a point of speculation.

    I've been betting lower since April, so I'm probably not a good source of inspiration.
    Aug 12 03:14 PM | Likes Like |Link to Comment
  • Profit Catalysts During The August Blues [View article]
    Brokerages use FIFO unless you instruct otherwise.

    You can check with your brokerage, but you can designate which shares are assigned up to 3 days after a contract has closed.

    Additionally, you should make certain that you are not subject to the wash sales rule, in the event that you bought identical or nearly identical shares within a 30 day window before or after the sale which resulted in a capital loss.

    Although you can't claim the loss in such case, you can adjust the cost basis of the new lot of shares, so you never really lose the tax advantage, unless your new shares were in a tax deferred account.
    Aug 12 09:19 AM | 1 Like Like |Link to Comment
  • Profit Catalysts During The August Blues [View article]
    Thanks.

    It depends on your continued tolerance for risk. SLV is a substitute for AGQ, but not quite as potent, in terms of its premiums.

    Just one caveat, regarding the strategy, is that you should still keep your diversification rules intact. In this case if your portfolio tolerance for speculative positions is 10% of total value and your exisiting AGQ position is already at 10% of your portfolio, I would probably let patience be the strategy, rather than adding additional shares.

    Also, given the strong run up in silver over the latter part of last week and the way the opening numbers look on Monday morning, I would be little inclined to chase price.
    Aug 12 08:05 AM | Likes Like |Link to Comment
  • Profit Catalysts During The August Blues [View article]
    Thank you.

    I don't really dollar cost average. In fact I have AGQ and have been on the good and bad sides of that position at silver is predictably mercurial. While sitting on paper losses on my expensive lot of shares I have made many additional purchases following a "having a child to save a life" strategy.

    While I do add shares to losing positions see http://seekingalpha.co... to understand what is behind the concept.

    In dollar cost averaging you still are likely to end up with an average cost that doesn't allow the sale of calls at a strike price that will deliver a meaningful premium.

    Instead, when I buy additional shares I treat them as individual lots, typically selling in the money calls on the new shares, preferably weekly options and either doing nothing with the older losing shares or selling longer term options.

    Using AGQ as an example, in each of the past two weeks I bought shares specifically to generate profit from option sales that would be quickly realized and help to offset paper losses on older and much more expensive shares upon which I had sold LEAPS.

    Unfortunately, in the Metals Sector, I have far too many positions that have required that approach, but it has made holding them much more tolerable while awaiting the inevitable cycle that will result in much higher prices.
    Aug 11 03:49 PM | Likes Like |Link to Comment
  • Profit Catalysts During The August Blues [View article]
    Or, I could be wrong and Deere moves higher. I forgot about that possibility.
    Aug 11 01:55 PM | Likes Like |Link to Comment
  • Profit Catalysts During The August Blues [View article]
    Well, if I knew that.....

    Deere reports earnings this week so it may be a trade with a little bit more risk in it than at other times.

    You can never know the bottom nor the top. If you are selling covered options it is all dependent on a level of confidence that you have that the stock will trade within a defined range. The best way to develop that confidence is through observation. Is the current price movement similar to those observed in the past? are there any imminent external or internal threats that may disrupt that price pattern.

    I think that in the case of Deere, $79 has certainly represented a good floor over the past year, so good, in fact, that you wouldn't have gotten too many opportunities if awaiting that floor.

    However, in advance of earnings, DE performed weakly on Friday when CAT, JOY, ETN and CMI did well.

    Although I currently have more expensive shares and had some assigned the previous week, I'm reluctant to add at this level just before earnings.

    Neither is the risk-reward proposition very good right now for selling puts, in my opinion.

    Ultimately, if selling puts, I have to be willing to own the shares in the event of assignment. I generally like to sell out of the money puts that deliver a 1% ROI for a week and that are at least 5% out of the money. At the very least the strike price has to be beyond the implied move.

    Last week, I sold GMCR puts that were nearly 20% out of the money in order to receive a 1.3% ROI. The proposition on Deere for next week is no where close, while the next support level is about $75.

    In this case, the implied move is about 4%, which would lead to a $77.50 put. However, that is only offering a $0.30 premium and is at a strike that is too high relative to the risk.

    Sometimes it pays to wait and see how earnings play out.
    Aug 10 06:20 PM | Likes Like |Link to Comment
  • Profit Catalysts During The August Blues [View article]
    Ah, if you followed me on Twitter, you would have seen this photo I posted in response to someone's suggestion that TED should hold talks on evil science
    http://bit.ly/1cDcrcW
    Aug 10 05:15 PM | Likes Like |Link to Comment
  • Profit Catalysts During The August Blues [View article]
    We actually had a very surprising experience with Apple this week (along with INTC and STX).

    Subscribers had sold Aug 17 $450 calls on AAPL, which went ex-div on 8/8. I was fully expecting all of the subscribers to tell me they were assigned early (I send text message or e-mail asking about early assignment experience if a recommended position they purchased is in the money at the time of ex-div).

    In Apple's case, I expected all to report assignment. But as it turned out mine were not assigned and more than half reported the same despite shares being in the money by $11 after the ex-dividend adjustment.

    By contrast, I was stunned when INTC Aug 17 $23 calls were reported as early assigned on 8/5 by a small minority, since INTC closed at $23.22 and was going to give up $0.225 in its dividend. That was irrational to try and grab the dividend through early assignment, especially since the lowest price to buy the option had been about $0.25.

    STX, which also went ex-div on 8/5 for $0.38 closed the previous Friday at about 41.10, having bought shares that day and sold $40.50 weekly calls (Aug 9). No one reported those as having been assigned early. Also irrational, but less so than Apple and Intel.

    While I would wait a little for CLF to cool down after two strong days, as long as the CHinese will keep pumping out surprising growth statistics there will be a large correction in metal miners, steel and metallurgical coal.
    Aug 10 03:19 PM | Likes Like |Link to Comment
  • Profit Catalysts During The August Blues [View article]
    Thanks, you know me too well. I've just placed electrical tape over the web cam lens on my lap top, although there's little I can do about the NSA just a few miles away.
    Aug 10 09:23 AM | 1 Like Like |Link to Comment
  • Profit Catalysts During The August Blues [View article]
    Thank you.

    No, I don't follow AGU. Both AGU and CF have out-performed the more heavy potash reliant companies, such as MOS and POT over the past two weeks, probably due to less potash exposure on their part.
    Aug 10 09:05 AM | Likes Like |Link to Comment
  • Profit Catalysts During The August Blues [View article]
    Thanks

    Those are potentially appealing numbers that you would then put into both a macro and microeconomic context.

    In the case of the gold miners I don't necessarily understand the microeconomic issues that are often unique to each company. I haven't owned a miner since about 2007-8.

    It does look interesting for the speculative portion of a portfolio. Have you been using it as a vehicle to sell covered calls or puts? I usually try to follow a stock for about a year, as back tracking is not that reliable with option prices, before making a commitment (especially to subscribers).
    Aug 10 09:01 AM | Likes Like |Link to Comment
  • Profit Catalysts During The August Blues [View article]
    Thank you.

    In general, I do prefer weekly options, but continually modify time frame based on factors related to my perception of market risk and occasionally specific stock risk.

    For example, in an upwardly moving market I prefer weekly options. However, if I think that the market may be headed lower, but I still like the specific stock, I would think more about monthly options.

    Additionally, as discussed in last week's article, occasionally I will look to the forward month when also looking to capture a dividend that is otherwise at risk for early assignment in the final days of the near month's option contract.
    Aug 10 08:54 AM | 1 Like Like |Link to Comment
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