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George Acs  

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  • Rolling The Dice With Earnings [View article]
    Click on the link earlier in the article. It will take you to an article that discusses implied volatility. Basically, using a short term option is best, such as a weekly option, take the call and ask premiums at the nearest at the money or in the money strike price, add them together and then divide by the strike price. That is the implied volatility. That defines the range, up and down, from that strike level, that the option market believes the price of shares may move.

    Sorry about the headache. The article was supposed to give you projectile vomiting.
    Apr 16, 2014. 10:43 PM | 5 Likes Like |Link to Comment
  • Rolling The Dice With Earnings [View article]
    In the event of the potential assignment of put contracts you had sold, whether related to earnings or otherwise, there can be some really good rollover opportunities that may allow you to ride out the storm. See the experience with Cree in this recent article
    Apr 16, 2014. 09:52 PM | Likes Like |Link to Comment
  • Rolling The Dice With Earnings [View article]
    Thank you, but now I feel like I shouldn't have just used a random number generator to fill in the blanks in the Table.

    Ultimately, there's nothing a spreadsheet can't help to either clarify or obfuscate.
    Apr 16, 2014. 09:13 PM | Likes Like |Link to Comment
  • Volatility... It's Back [View article]
    Yeah, the near term premiums are reflecting some expectation for volatility but the longer term aren't

    If you noticed the STOs on MET and SBUX today went for higher strikes accepting the reality that the forward month premiums were low.
    Apr 16, 2014. 06:38 PM | Likes Like |Link to Comment
  • Volatility... It's Back [View article]
    While in general I'm not a big believer in the concept of "luck," when it comes to stock positions I think it's as valuable as valid as anything else. I use the word "hopefully" all the time when thinking about stock positions, but rarely in anything else.
    Apr 16, 2014. 02:34 PM | Likes Like |Link to Comment
  • Volatility... It's Back [View article]
    Thank you.

    Yes, my interest in APOL is still there, but it continues as a potential put sale. I'd like to see another drop, say on a 5% order, before doing so.

    ANF is getting my interest again, as I've almost always had a position over the past two years and have been waiting for it to come down from $39. As it gets closer to dipping below $35 I'm ready to either add shares or sell puts.
    Apr 16, 2014. 01:18 PM | Likes Like |Link to Comment
  • Volatility... It's Back [View article]
    Quite a story. I found his obituary a short while ago. Your recollections would have been a nice tribute to his memory.
    Apr 15, 2014. 03:50 PM | Likes Like |Link to Comment
  • Volatility... It's Back [View article]
    I knew Rower and Healthco well, in addition to knowing the "Combat Zone" well. My father had owned a dental lab in NYC and did business with both. I believe, although not certain, my father telling me that Meyer Cyker was Hungarian, but he thought everyone was Hungarian. I met him when I went to pick up a package of casting gold for my father probably 40 years ago, or so

    If I recall JJ Crimmings was a local dental supplier. They used to be the suppliers for Children's Hospital in Boston. Every Friday the question was "Do you need anything from JJs?"
    Apr 15, 2014. 10:48 AM | Likes Like |Link to Comment
  • Volatility... It's Back [View article]
    Thank you.

    It hasn't really fallen out of favor, it's just that I think its price is a little too high at the moment. It's among the stocks that I regularly follow looking for a potential opportunity to climb aboard again.

    I generally like to consider Seagate prior to an ex-dividend date or after some sharp losses, or possibly as a put sale before earnings.
    Apr 14, 2014. 11:33 PM | Likes Like |Link to Comment
  • Volatility... It's Back [View article]
    The numerous near vertical movements in volatility would argue against any kind of systematic movement in the index that is based upon behaviors that are timed to events. Instead, you would expect to see a less rapid velocity of change as anticipated events begin or end.

    But again, more importantly, the pattern is not an old established one, whereas earnings season is old and established. It is a pattern of recent origin that can end just as easily as it sprang.

    Besides that, your contention that the mini-VIX periods "correspond to the approach of earnings," probably depends on how you define "approach" and if you look at the chart, just how consistent you are in the application of that definition. For example, the narrow mini-VIX in April 2013 actually precipitously began after earnings season started. By contrast, the more broad mini-VIX in Sept 2013 ended more than a month before earnings season, while instead a maxi-VIX occurred at the onset of that earnings season. A near similar situation is seen at the next earnings season, so it is difficult to make the association as you have.
    Apr 14, 2014. 02:58 PM | Likes Like |Link to Comment
  • Volatility... It's Back [View article]
    The rise in implied volatility in advance of earnings, or more specifically for the expiration week of earnings is the basis of the "Premiums Enhanced by Earnings" trades. However, that enhancement is far from universal, as GE which reports earnings this week, demonstrates.

    Additionally, the volatility index is based on the S&P 500, which includes on a proportional basis far fewer of the highly volatile positions than would a Russell Index, for example. For that reason I don't believe that the current pattern of volatility is earnings related. Otherwise, you would expect that such a pattern was always the case and it has not been so. The changes in direction, are also quite swift, whereas earnings season is essentially year round. No sooner does Monsanto end the season than JP Morgan starts the new season.
    Apr 14, 2014. 12:10 PM | Likes Like |Link to Comment
  • Volatility... It's Back [View article]
    What years were your friends at Harvard? I was there and then post-graduate from 1976-83. To compound matters, at Harvard, you were considered something of a failure if you became a clinician. My class was considered particularly lost because about half of the 17 went on to clinical careers in general dentistry.

    Fortunately, they can soon be effaced from memory as retirement will be beckoning for most.
    Apr 13, 2014. 09:11 PM | Likes Like |Link to Comment
  • Volatility... It's Back [View article]
    I hate to admit this, but some of my best friends are Maxillofacial surgeons.

    That's really not true, I just wanted to show you that I was open minded. I only didn't comment on your YHOO comments because I had nothing to add. Now that really enrages me.

    In an earlier time Oral Surgeons were derisively called "tooth schleppers," but then they tried to take on some respect by calling themselves Oral Maxillofacial Surgeons. When I went to dental school very few people went into specialties, but at Harvard it was expected that everyone would do so. The lowest form of life was considered to be someone who became a general dentist (even if they did a residency), while the second lowest form of life was someone who didn't become an Oral Surgeon, although some deference was given to Periodontists.

    Obviously, I'm still harboring deep trauma
    Apr 13, 2014. 07:56 PM | 2 Likes Like |Link to Comment
  • Volatility... It's Back [View article]
    I mentioned in the article "... people may disagree as to whether volatility is predictive in nature or simply a by product of events....," but it's predictive capacity is only as a proxy for some other measure. It simply offers a different way of looking at the nature of what is going on around you.

    The chart, as used in the previous article was to demonstrate that perhaps there wasn't reason to be fearful (at that time) that volatility was going to continue to rise and as an result one should have also anticipated the overdue correction.

    Using volatility to portray the market's own behavior there was reason to not buy into that line of thinking. This time, however, while the line of thinking itself may be flawed, the outcome suggested may be in line with the established pattern that would expect a continued rise in volatility in accordance with a deteriorating market.
    While I appreciated the medical metaphor, you made no mention of the signs that are there to either compliment or contradict the symptoms so that a truly thoughtful differential diagnosis could be offered.
    Apr 13, 2014. 07:06 PM | Likes Like |Link to Comment
  • Volatility... It's Back [View article]
    There's not much reason to suspect that it should stay above the offer price of $19. There has been plenty of time for a white knight to step forward and those who thought that would be the case have become disillusioned.

    Who knows, some bad earnings or some further broad market deterioration and the offer could be altered to something below $19, so I'm staying away and not to interested in arbitraging an old friend.
    Apr 13, 2014. 06:52 PM | Likes Like |Link to Comment