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George Acs

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  • Playing Leapfrog With Molycorp [View article]
    You're absolutely right. I should have mentioned that you have to be willing to own shares as a general rule when selling puts. In this case, part of the list of goals is to avoid ownership, but it is a possibility, especially if someone decides to exercise early. That's one of the reasons I like to make moves upon large price swings, especially downward, so as to avoid that possibility.
    Apr 9 01:15 PM | Likes Like |Link to Comment
  • Playing Leapfrog With Molycorp [View article]
    The individual investor can decide what stocks to use with any strategy. Any one can cherry pick to "prove" or "disprove" a strategy.

    However, your approach is somewhat novel as you focus on a strategy that isn't remotely being discussed in this article.

    Lest the confusion continue, the strategy discussed in this article is not a "collar," unless you are using a provisionally unique definition of the term. There is no long position. There are also no call options involved. In addition, instead of using out of the money puts, you may have noted that I specifically stated that my preference is through the use of in the money puts. Further, those are sold, not purchased.

    As such, none of the three legs of a collar are included in this strategy. Perhaps you were thinking of a different article?
    Apr 9 12:40 PM | 1 Like Like |Link to Comment
  • Playing Leapfrog With Molycorp [View article]
    Or you could just get Option to Profit, although my own use of puts has significantly changed over the years since that was written.

    I am a relatively simplistic devotee of options and stay away from the more complex strategies, but occasionally like doing something that is a little off the beaten path.

    I should have mentioned, as you did in your comment, that "covered" puts is the way to go if you want to be consistent with a conservatively cautious strategy.
    Apr 9 12:26 PM | Likes Like |Link to Comment
  • Playing Leapfrog With Molycorp [View article]
    You may have noticed that I never said anything about the merits of the company. This is simply about trading a stock based on the criteria mentioned in the article. The ticker symbol is irrelevant. What is relevant is that its price moves and does so on a very regular basis, while offering reward. The longer the leapfrogging game can continue the easier it is to eliminate risk as premiums accrue.
    Apr 9 12:22 PM | 1 Like Like |Link to Comment
  • Playing Leapfrog With Molycorp [View article]
    There is no question that fees can eat your profits. My assumption is that most people who trade with some frequency do so with discount brokerage firms and may also do so in some volume.

    Back in the days that I first considered using a covered option strategy the costs were prohibitive even for simple stock buys. You needed a 10% gain just to cover the commission costs of entry and exit on a couple of hundred shares of a $20 stock.

    For many, it's a little different these days. Perhaps I should say that it's a lot different these days.

    So if you take that factor out of the equation, as you should for most others than yourself, your remaining conclusions are still erroneous.

    With each week the "danger" or as i refer to it, the liability falls, as premiums accrue. The use of rollover trades, which are quite inexpensive to execute, delays or can eliminate assignment while continuing to generate new premium income.

    In fact, being rangebound is by far the most desirable of all conditions and is extremely rewarding. It is also far less risky than trying to call a direction. The strategy described above is really agnostic as to direction. It just depends on periodically alternating movements, which is what most stocks do during most of their life spans.
    Apr 9 12:18 PM | Likes Like |Link to Comment
  • Playing Leapfrog With Molycorp [View article]
    I tried to sell puts on GILD yesterday for personal account, but couldn't get my price, as I was a little too late and shares started their recovery right after placing my weekly bid at $0.59 for the weekly $67.50.
    Apr 9 12:08 PM | Likes Like |Link to Comment
  • In Like A Lamb And Out Like A Lion [View article]
    The OTP COach shares went down to the wire. I was hoping for their expiration, but in the final hour shares got to $49.51 and I usually try to make trades by 3:30 PM, so I was prepared for a rollover, but hoping otherwise. SHares then picked up a few cents, enough to cross fingers and wait.

    The last TMUS position I had was assigned on 3/22, but I continue to watch shares for a possible new entry point.

    Yesterday was an interesting day as the follow through market decline saw significant price turnarounds in both T and VZ which were ex-dividend the next day (today). They both rallied significantly from their lows as there was clear rotation into perceived safety and high yielders.

    TMUS, on the other hand, suffered along with the rest of the market.
    Apr 8 08:17 AM | Likes Like |Link to Comment
  • In Like A Lamb And Out Like A Lion [View article]
    It only matters how they make their money when someone in a position to do something about it does so.

    To quote myself from last week's mention of Apollo (and particularly to the final closing sentiment):

    "Finally, while so much attention is being focused on Herbalife (HLF), it seems that the real shame should be heaped on the private education group. Whether looking at their graduation rates, student loan defaults or other measures, one has to wonder about their rightful place in society, as long as some deference is given to the occasional successful graduate who can be identified on the basis of appearing in a television commercial touting the wonders of the particular educational model offered by Apollo and others.

    But, as with any disdain I may have for smoking, that doesn't mean that trying to exploit the stock is above me....."
    Apr 6 05:34 PM | Likes Like |Link to Comment
  • In Like A Lamb And Out Like A Lion [View article]
    My first visit to Buffalo was in mid-November 1975 and it was about 80 degrees. I remember thinking "this doesn't look like a bad place to spend 4 years."

    It took me nearly 40 years later to realize that I had also dodged a bullet by not going to Binghamton, NY for college, having just visited there for the first time this Thanksgiving to be with my son's future in-laws

    Ultimately, I survived Boston winters instead including the blizzards of 1978. No matter how bad those may have been, infinitely better than what could have been, as my native Buffalonian brother-in-law can attest.
    Apr 6 04:50 PM | Likes Like |Link to Comment
  • In Like A Lamb And Out Like A Lion [View article]
    Thanks, but sorry, it wasn't me. I even had to look up the ticker and don't ever recall having heard of the company before. It trades a little too thinly, especially in the options end of things to get my attention, although I saw that there was a significant volume spike a few weeks ago, maybe 15 times the average volume.

    Also noticed that the Chairman sold 100,000 shares on the open market this past week
    Apr 6 02:26 PM | Likes Like |Link to Comment
  • In Like A Lamb And Out Like A Lion [View article]
    Having now owned Coach (or sold puts) 18 times in the past 20 months, with an average price about $2 more than the current price, I've netted about a 65% profit from minimal share gains, dividends and predominantly option premiums. As long as it keeps going in this price range, helped by all those who talk its prospects down, it's only a matter of time before ownership cycle #19 begins.

    Coach may have lost some of its luster but it still has cache around the world.
    Apr 6 07:36 AM | Likes Like |Link to Comment
  • In Like A Lamb And Out Like A Lion [View article]
    Thanks as always for the kind words, especially in public.

    Don't forget that YUM goes ex-dividend this week. That price drop isn't necessarily reflected in the premium and you could be partially subsidizing that and taking on the risk of assignment as there is a guaranteed $0.37 price drop.

    If it falls some prior to 4/9, it's on my secondary list for the week.
    Apr 5 04:24 PM | Likes Like |Link to Comment
  • In Like A Lamb And Out Like A Lion [View article]
    While Eastman-Kodak may only be a ghost of its past self, Rochester, NY will always be able to lay claim to being the burial place of Frederick Douglass.

    When interviewing for a position there about 25 years ago that was just about the best anyone could say to me to entice me to move from NYC (with apologies to anyone from Upstate NY)

    At least that ghost will be forever.
    Apr 5 04:21 PM | 1 Like Like |Link to Comment
  • In Like A Lamb And Out Like A Lion [View article]
    You may not know until tomorrow about its assignment. I'm still seeing my $39.50, as well, but not all of the positions that I know will be assigned have showed up yet.
    Apr 5 02:52 PM | Likes Like |Link to Comment
  • In Like A Lamb And Out Like A Lion [View article]
    Ultimately it depends on whether the option holder can make more money by trading his options when compared to grabbing dividend and any profit from immediately selling shares and subtracting their option cost from that amount. Of course, that also places the potential option holder at risk of shares going down beyond the dividend related drop when trading opens.

    I own VZ with a 4/11 expiration and am currently on the cusp. If I had the 4/25 it would be much less likely to have it assigned early, although even with the weekly option the earlier in the week the better off you, as the seller are.

    Some shares with large dividends and low volatility are also subject to dividend arbitrage and have essentially no added time value in their premiums when they are in the money and are more likely to be exercised early, such as Altria.

    This week my upcoming dividends are MA, VZ, WFM, FCX, GPS and DRI. The 4/11 GPS is well in the money and may be assigned early, as Monday is it's ex-div date and there was little additional premium in contracts.
    Apr 5 02:39 PM | Likes Like |Link to Comment