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George Acs

 
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  • Earnings Still Matter [View article]
    Taken from "Facebook Before Earnings" which discusses the concept http://seekingalpha.co...

    IMPLIED PRICE MOVE = (Call bid + put bid)/Strike price, where strike price is that closest to current share price

    That is the simple calculation that is accurate for short term contracts. The calculation for longer term, such as month;y contracts is a bit more complex and is one of the reasons I didn't include Buffalo Wild Wings in this week's list, nor McGraw Hill
    Feb 2 08:37 AM | Likes Like |Link to Comment
  • Earnings Still Matter [View article]
    Strangles, straddles, flying birds, insects are all too complicated for me.

    I tend to be very simple minded in my approach to these potential earnings plays and tend to go with straight put sales, especially if they're already showing weakness going into earnings. For those that don't I usually wait for the news and then will pile on if the news is bad through put sales

    Good luck
    Feb 1 04:53 PM | Likes Like |Link to Comment
  • Earnings Still Matter [View article]
    If volatility increases (that's topic of this week's upcoming article, "Volatility is Back" ) you'll be able to write those calls concurrently and still get a good premium for OTM strikes
    Feb 1 11:37 AM | Likes Like |Link to Comment
  • Earnings Still Matter [View article]
    YUM's recent history has been to rebound from every disappointment. The latest disappointment is tied to the faltering Chinese economy and some fears of Avian flu.

    Unless there is a specific health related scare at a YUM franchise in China, there is very little way to stop its popularity among a population that will continue seeing its standard of living grow, even if the economy falters, because the government can't afford mainstream discontent
    Feb 1 11:17 AM | Likes Like |Link to Comment
  • Earnings Still Matter [View article]
    Thank you.

    I find the Scottrade lack of service for the sale of puts to be puzzling. A number of my subscribers had used Scottrade and have subsequently switched specifically for the lack of that service.

    I personally don't understand the prohibition when cash covered puts are being considered.
    Feb 1 10:43 AM | Likes Like |Link to Comment
  • What A Surprise [View article]
    Why? As they say in New Orleans "Laissez les bons temps rouler." It's hard to get off the party bus when it's still in full gear.
    Jan 29 06:53 PM | Likes Like |Link to Comment
  • What A Surprise [View article]
    This appears to now be simply a susceptible market, rather than one inherently weak. Next week are new Employment numbers and we'll get an idea if last month's report was an aberration and then we'll see just what this market and the new Federal Reserve is made of.
    Jan 29 04:48 PM | Likes Like |Link to Comment
  • What A Surprise [View article]
    There is an explanatory and illustrative article at http://seekingalpha.co...

    Essentially, it is a trade that looks for a threshold ROI that utilizes a strike price that is outside of the range being predicted by the option market.

    However, the caveats are that you must be willing to own the shares at that price if faced with assignment or be willing/able to manage the options, such as rolling the put contracts over if it appears that assignment is going to occur, if not wanting to take ownership of shares.

    As I mentioned in the accompanying article to this one ( http://seekingalpha.co... ) I'm currently inclined to consider earnings related trades after earnings are announced, particularly looking at the sale of puts following a large earnings related price drop
    Jan 28 12:39 PM | Likes Like |Link to Comment
  • Earnings Finally Matter [View article]
    The utility of listing the ROIs in the worksheet you referenced is for comparative purposes, as you can see the ROIs are based upon weekly, monthly and some expanded weekly options.
    But for those that follow the longitudinal application of the strategy it allows an historical outlook on how ROI, particularly the premium based portion, has been decreasing as market volatility has been decreasing.
    Jan 26 09:56 PM | Likes Like |Link to Comment
  • Earnings Finally Matter [View article]
    Thanks.

    That's exactly the way: option premium divided by strike price, in the case of a put sale.

    I stay away from discussing annualized returns, particularly as they may be derived from very short term trades. Just too much tendency for overstating reality.

    The only time I do discussed annualized returns are in cases when I look at case studies of specific stocks that were bought and subsequently assigned on multiple occasions over the course of a defined period of time. An example of that is shown here http://bit.ly/19Wx5VM on a chart appearing in a recent article published in TheStreet
    Jan 26 09:53 PM | Likes Like |Link to Comment
  • Earnings Finally Matter [View article]
    Thank you. No, I keep things as simple as I can. I think that if I were about 10 years younger and still had some capacity to think in more than a single plane I would likely consider using other more complex strategies, as long as they don't look like anything that flies
    Jan 26 07:09 PM | Likes Like |Link to Comment
  • Earnings Finally Matter [View article]
    The market has essentially decoupled itself from earnings over the past few years as it has followed one macroeconomic issue after another and has been nearly schizophrenic in its interpretation of world and economic events.

    The quality of earnings is relatively addressed. As you say, cost cutting has been a substantive component, but real emphasis on "top line" and "bottom line" has been missing.

    Now share buy backs are increasingly becoming the artificial means whereby earnings are enhanced

    While there may be some merit to your suggestion that earnings decoupled from revenue growth is an ongoing risk factor, you can't ignore the positive impact of Quantitative Easing on stock prices, nor can you ignore the temporal coincidence of the market suddenly slowing down just as QE did so, as well.
    Jan 26 03:31 PM | Likes Like |Link to Comment
  • Earnings Finally Matter [View article]
    I'm glad that most people don't realize that by that you mean that you are being forced to do the reading.
    Jan 26 03:25 PM | Likes Like |Link to Comment
  • Earnings Finally Matter [View article]
    Thank you. I may have to find out who this other guy is, but I may prefer to just seethe in a cesspool of jealousy
    Jan 26 03:24 PM | Likes Like |Link to Comment
  • Earnings Finally Matter [View article]
    Thanks, but a little surprised that you couldn't work a ballroom dancing reference into the mix.
    Jan 26 03:21 PM | Likes Like |Link to Comment
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