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George Acs  

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  • Heating Up The Cold War [View article]
    Having hailed from Eastern Europe, I can tell you that teeth and the way they're repaired can be pretty hideous. The dentist part of me will confirm that to be the case, although it doesn't take a degree to spot those big old silver crowns on lateral incisors.

    My guess is that there's lots of periodontal disease going on, as well, thereby making the extraction quite simple. It may take more to slow that bad boy down, but I'm willing to work with you on developing and implementing that strategy.
    Who knows, maybe it will have cross application to the markets.
    Apr 26, 2014. 10:38 AM | Likes Like |Link to Comment
  • Expect The Unexpected [View article]
    Excellent point.

    While I'm generally a conservative trader, I will use more volatile positions for selling puts, but there are limits.

    I especially try to stay away from the real fad positions, such as Tesla, FireEye, etc. I generally stick to the same old stocks over and over again. In that case familiarity doesn't breed contempt, it creates a comfort level and a feeling that even if there is an adverse price movement it will at some point correct, so while being patient, just continue to collect premiums.
    Apr 26, 2014. 10:33 AM | 1 Like Like |Link to Comment
  • Expect The Unexpected [View article]
    But why do you have to cover at a loss? Have you considered rolling those puts to a forward month? It may involve buying back the put you sold at a loss if it is now well within the money but that is offset by the additional premium received from selling a new put option.

    The idea is to keep doing that until price recovery. Look at the case study in this article

    You'll see that the graphic on trades in Cree, a highly volatile position occasionally show negative premiums. Those are from having bought back the options after large falls in an effort to avoid assignment.

    Keeping an eye on your overall return when doing so may even have you closing out a position with a final buy transaction with a net debit and no offsetting sell credit, yet still leaves you nicely in the black, particularly when assessing the total number of days involved in the trade sequence and maybe even when compared to the S&P 500 for the same time period.
    Apr 26, 2014. 10:29 AM | Likes Like |Link to Comment
  • Expect The Unexpected [View article]
    Facebook turns out to have worked out well having used $52 and 52.50 puts before earnings and then selling 55.5 puts after earnings, the latter still being open.

    My mind has become to feeble to comprehend things like condors, butterflies, etc. Just way too much to keep track of and too much thought required before entering into the trade.
    Apr 26, 2014. 10:22 AM | Likes Like |Link to Comment
  • Expect The Unexpected [View article]
    While there is always room for an exception to the rule, it's always nice to sell calls into strength and to sell puts into weakness. In the case of a stock that I'm holding that is well below its cost, I will sell a call even below that cost level on a day that the stock price pops, just to grab something while waiting for a more sustained climb.
    Apr 26, 2014. 10:19 AM | Likes Like |Link to Comment
  • It's Raining Earnings, Hallelujah [View article]
    I'm all for being agnostic on the merits of a stock.

    As far as the upside goes, yes, you miss those rare ones that have large and sustained moves. in 2013, every Tom, Dick and Harry had those kind of moves, but the longer you're around the more you know that's just not the way things usually work. There are usually two directions for stock movement.

    But if you miss that occasional home run, there's not really a shortage of those that have lots and lots of recurrent small moves up and down and regularly generate those premiums and dividends.

    As far as CLF goes, any profit that they will be able to translate into a dividend increase will go a long way toward turning shares higher. I think it can gap up just as easily as it gapped down.
    Apr 26, 2014. 12:55 AM | 2 Likes Like |Link to Comment
  • Heating Up The Cold War [View article]
    Well, I think once the current situation is resolved, likely by diplomatic means, with RUssia portraying itself as the peacemaker, it will have sealed the fate of Crimea and the world will have forgotten about how that all evolved. Putin is simply putting some space between it and making it yesterday's news by diverting our attention with the threat of actions that even he knows can't be rationalized if carried out.

    While doing so and reflexively referring to any who offer criticism as "fascists" he is simply repeating the rationale used by the Third Reich in the 30s in Czecheslovakia. The last I recall, those were fascists, among other things.

    How ironic.

    Anyway, Putin is brilliant and only his "friends" pay any price, which is better than being sent to jail and having their wealth confiscated. Besides the price they pay for sanctions is substantially less than could have potentially been the case if our foreign policy had been able to act decisively, rather than simply suggesting it might do certain things and make those suggestions over and over again.

    And I'm an Obama supporter, but this 'red line" kind of approach isn't taken very seriously
    Apr 26, 2014. 12:49 AM | 3 Likes Like |Link to Comment
  • It's Raining Earnings, Hallelujah [View article]
    When it comes to earnings, I prefer the weeklies. I think you get more bang for your buck, whether on the call or put side. Of course on the call side you lose the guarantee of more time enhanced premium. However, with volatility so low that time value isn't worth what it used to be.

    With puts I usually prefer to be in and out of a position and am usually initially selling the puts due to an event that either may lead to a large price move or has lead to a large price drop. If necessary and able, I then try to roll the weekly over if assignment looks likely.
    Apr 26, 2014. 12:35 AM | Likes Like |Link to Comment
  • It's Raining Earnings, Hallelujah [View article]
    CLF is just one of those stocks that you believe is bound to be next year's leading gainer on its tremendous rebound, except then you realize that you believed that to be the case last year, too.

    I've found that rolling over puts has really enhanced my margin account's performance without worrying about such details as actual stock performance and does so without incurring interest cost, as long as I can avoid the assignment. This week I had 2 different lots of FB puts expire, purchased another yesterday, rolled over LULU, CREE and TWTR and had DECK expire.

    And I'm still a conservative investor despite using very volatile stocks and margin.

    All that's needed is some liquidity and in the case of wide bid-ask spreads on either leg of the trade, the willingness of a motivated seller/buyer (me) to take less in premium in order to ensure getting the trade done.
    I'm a big enough person to do that sort of thing. You're welcome.
    Apr 26, 2014. 12:29 AM | 2 Likes Like |Link to Comment
  • How Will Apple's Stock Split Impact Its Shareholders? [View article]
    Have you considered rolling over the puts if assignment looks likely? That is a way to continue receiving premium if share price has moved against you. It involves a concurrent BTC (Buy to Close) and STO (Sell to Open transaction) that sells a new contract at a forward date.

    Also, I'm not a fan of the use of margin, but it is absolutely perfect for selling puts. Doing so never incurs an actually interest charge as the cash to cover the potential assignment of shares is simply put into a sort of escrow and your available margin is reduced, but never really used. That is, unless, you actually take assignment of shares, in which case they must be paid for.
    An example of rolling over puts and the use of margin can be seen in this article:
    Apr 26, 2014. 12:14 AM | 1 Like Like |Link to Comment
  • How Will Apple's Stock Split Impact Its Shareholders? [View article]
    Beta can be very mis-leading.

    As you point out timing and time frame can be very critical in the beta value. Your brokerage, Yahoo, Google and others likely will cite different beta values as they may use different time frames.

    In the case of Apple it has really been mis-leading of late in that if you watch Apple price with any regularity you will have seen that it very, very frequently moved in a direction opposite that of the broad market. Not participating in rallies and not following the S&P 500 lower on down days. The pure mathematics behind the definition of beta, however, doesn't really care about correlation or concordance. It just looks at the sums of the changes as compared to the standard's sum of changes over a defined period of time.

    T get a quick idea of the kind of volatility as stock may have around earnings just simply glance at price charts. You don't need to draw lines that are subjectively interpreted, you can simply see what the historical percentage changes have been, regardless of direction. The option market will give you some guidance by its "implied volatility," but there's nothing like seeing past performance.
    Apr 25, 2014. 10:20 PM | 3 Likes Like |Link to Comment
  • It's Raining Earnings, Hallelujah [View article]
    You are more brave and daring than I am. I can't pull the trigger to short stocks, especially in advance of earnings.

    When you say "short puts" are you referring to time frame or to having sold puts? From the context I couldn't readily tell

    If you were short a stock the appropriate hedge would be buying an out of the money call. If share price moved higher against you there is potential to leverage on the long calls and offset some of the adverse movement on the shares. Of course, that carries cost.

    However, if you were short puts, there is no leverage at work. If share price goes up your put premiums received won't bail you out beyond their premium.

    I was also confused about your HLF short puts. Are they at $60 and $65 strikes? Deep in the money? Those could be at risk of early assignment in advance of earnings
    Apr 25, 2014. 10:10 PM | Likes Like |Link to Comment
  • It's Raining Earnings, Hallelujah [View article]
    That's really the nice part about puts, especially when it's regarding a company that has some real products and services. It's a totally different story when you have a company that may be in some kind of death spiral as the world begins to catch on that not all is as appeared.

    I had to rollover LULU and Cree puts today, but that's something that I've happily done in the past, especially since I'm paying nothing to do so and collecting the premiums.
    Apr 25, 2014. 09:43 PM | Likes Like |Link to Comment
  • It's Raining Earnings, Hallelujah [View article]
    Brilliance and great luck are a fantastic combination.

    My wife long ago taught me, when it came to our kids, to take credit for every compliment that was directed toward them, because you know that people will quickly blame you for everything they did.

    So, in that case, great stock selection.
    Apr 25, 2014. 09:40 PM | 1 Like Like |Link to Comment
  • Cook Does Icahn's Dirty Work At Apple [View article]
    No. The shares are retired. As of February 2014 Apple had retired over 80 million shares (about $490 billion) since the recent buy back began. The SEC requires that such shares no longer have value, are not part of the float and do not represent any ownership in the company.

    In fact, in the event of continued rise in shares, there is actually detriment to society, because it represents further capital gains that never got gained and were never transferred into realized profits and never poured back into the economy.
    Apr 25, 2014. 09:38 PM | Likes Like |Link to Comment