Seeking Alpha
View as an RSS Feed

Reel Ken  

View Reel Ken's Comments BY TICKER:
Latest  |  Highest rated
  • Apple: Bear Case From A Bull [View article]
    The threats to AAPL could be said about any company.

    Every company has limits on its growth rate and every company has competition and every company must be successful in their innovation.

    Therefore, it boils down to Apple's ability to handle these threats more/less than every other company. If management can do better than others AAPL will continue to be a stock to own. If not, then its time to go home.
    Apr 25, 2015. 04:57 PM | 4 Likes Like |Link to Comment
  • USO Calendar Spreads ... An Update [View instapost]
    Hi YCL,

    If I was starting today I'd probably go with 19/28 -- just on the basis that upside is probably no more than 50%. That should debit somewhere around $2.60-2.80. With 91 weeks till expiry, you need 3cents weekly extrinsic.

    Second, since the thesis is a drop, short term, before a rise, I'd go ITM as deep as possible, to earn at least 3cents extrinsic. That means $18.50, possibly $19.

    There will be more extrinsic available when, and if, USO drops. If it never drops, then you'll break even in January 2017, as long as you earn 3cents/week.

    The important thing to remember in this strategy is that you always roll the weekly at the initial strike. Until such time as you can't get enough extrinsic, and then you lift it up, just enough to get the needed extrinsic.

    Now, if you think the bottom is in, then weekly at $20 works.

    The problem with $20, is that if USO drops to, say, just $19, you have to keep selling at $20, and the further/longer USO stays at or below $19, the less and less extrinsic you get. Instead, if the strikes were at $19, the more and more you get.

    So, to copy a famous line "You get extrinsic now or you get it later".

    I'm thinking $18-$19 is the more frequent trading range and $19.67 is a temporary high.

    That doesn't mean I'm right, $19.50-$20 could be the new trading range. Or, maybe something else. It's too volatile to know.

    So, it's just a matter of how you see things developing. If you're wrong, and you get 3cents/week ... worst case is you break even two years down the line.

    But, and I can't stress this enough, you need to hold the initial strike to avoid the see-saw. As long as you get extrinsic, you're o.k.
    Apr 25, 2015. 03:53 PM | Likes Like |Link to Comment
  • Uncertainty Over Rate Rises In The United States Could Be Detrimental [View article]
    You suggest that if the Fed came out and said "absolutely, positively we will xyz..." things will go smoothly.

    Well, if the Fed came out, say tomorrow, with a such a statement it would cause turmoil as everyone scampers to adjust. No one is just going to orderly change their positions slowly over the ensuing months.

    Whatever will happen will happen ... and it will happen as soon as the Fed makes a statement either that they ARE NOW or WILL ON SUCH-N-SUCH DATE raise rates.

    Lastly, everyone wants direction in an uncertain world. They look to capitalize by receiving this information. This is hogwash! Everyone will have the same information. The real profits go to those that are able to see into the future and prepare beforehand. Everyone else just picks up the scraps.

    It's the same way with stocks ... those that wait till an earnings release never make anywhere near the money as those willing to anticipate the result and act beforehand.
    Apr 25, 2015. 11:09 AM | 1 Like Like |Link to Comment
  • Cantor Fitzgerald buys into Lumber Liquidators value proposition [View news story]
    Hi Enersavr,

    First, I think it's improper for you to anecdotally speak for "many contributor's".

    Second, obviously SA disagrees with your opinion.

    Maybe you should just step back and let someone that has a strong opinion, opposite yours, the privilege of expressing it.

    After all, fools that express opinions just betray themselves.
    Apr 24, 2015. 06:24 PM | Likes Like |Link to Comment
  • USO Calendar Spreads ... An Update [View instapost]
    Hi YCL,

    The higher the vol, the more extrinsic premium ... so that is a good thing.

    However, the higher the vol, the more likely the see-saw. This is bad, unless you manage it.

    To mange a see-saw, you need to set the initial short option at a particular strike and just keep it there every time you roll. If the stock over-runs, sacrifice extrinsic expecting a drop. If the stock goes down, sacrifice extrinsic expecting a bounce.

    This means you have to just accept whatever comes from it. For instance USO is near 20 now. The extrinsic on setting an 18 strike is very small. The temptation is to go to, say 19 strike, but I still hold at 18. Though I did go out a few weeks to earn more.

    I'll hold at 18 until such time as I think things have settled down and a clear bottom is in. Then I'll move the strike. Since my far-dated is January 2017, I have plenty of time to earn extrinsic, so there's no rush to judgment.
    Apr 24, 2015. 10:49 AM | Likes Like |Link to Comment
  • Cantor Fitzgerald buys into Lumber Liquidators value proposition [View news story]
    Hi Sinners,

    100% agree.
    Apr 24, 2015. 06:23 AM | 1 Like Like |Link to Comment
  • Cantor Fitzgerald buys into Lumber Liquidators value proposition [View news story]
    Hi Sinner,

    Thank you.

    The best lesson that one can get from this site is that there are two sides to every story. The challenge is determining which is more likely.
    Apr 24, 2015. 06:22 AM | 1 Like Like |Link to Comment
  • Cantor Fitzgerald buys into Lumber Liquidators value proposition [View news story]
    Hi Sinners,

    Well, since you are self admitted new and novice stock investor, you'll learn, in due course, not to believe any of the stories anyone tells you.

    Instead, do research. Look at income statements and balance sheets, etc.. It's called due diligence.

    If you don't know how, buy a mutual fund or go to a professional money manager.

    If you're not willing to do that, you'll eventually attract a huckster with get rich stories to sell you. If you're lucky, you won't lose everything.
    Apr 23, 2015. 07:40 PM | Likes Like |Link to Comment
  • Cantor Fitzgerald buys into Lumber Liquidators value proposition [View news story]
    Hi Clayton,

    I agree.

    Welcome to the world of "money-for-clicks".
    Apr 23, 2015. 04:42 PM | 1 Like Like |Link to Comment
  • Cantor Fitzgerald buys into Lumber Liquidators value proposition [View news story]
    Hi Clayton,

    I don't trust anyone's survey unless I know the individual. These threads are filled with "spinsters".

    For instance ... I'd trust your "survey" because you are clearly NOT an LL or Tilson troll. Your profile says it all. You would have no need or motivation to make it up ... but a troll or Tilson, well, I agree, that's another story.

    Frankly, I question why anyone would even bother to engage in the alleged poll, one week before earnings release. It seems like worthless effort unless one is trying to get a jump on the market ... and if that's the case ... the last thing they would do is publish it.

    Or, is it part of a pump-n-dump? That would be more consistent.

    I'm just trying to help people understand the reality of this site.
    Apr 23, 2015. 10:25 AM | Likes Like |Link to Comment
  • Selling Puts And Calls: Dessert And Coffee [View article]
    Hi BrutalHonesty,

    Sure.

    Options on SPY and any other stock are taxed as ordinary income .., except for a long leap option held over a year, in which case it is long term cap gains/loss. Short options are always ordinary income.

    SPX is an index, not a stock. It is Sec 1256 for tax purposes. That means that options on SPX are taxed 60% Long Term Cap Gains and 40% short term (ordinary income). This holds true even on short-sided options.

    Since the majority of gains will come from selling weekly options, SPY, and other stocks, are 100% ordinary income, whereas SPX is 60% LTCG and 40% STCG. This means lower taxes.

    The 1256 also applies to RUT, not IWM and IDX not QQQQ and futures.
    Here's one of many links that explain it (http://bit.ly/1yVVY0q)
    Apr 23, 2015. 06:59 AM | Likes Like |Link to Comment
  • Selling Puts And Calls: Dessert And Coffee [View article]
    Hi BrutalHonesty,

    Theoretically, the market is efficient ... the same with options. By extension, no one can make money .. except, of course, the brokers.

    The inefficiency is WITHIN THE INVESTOR. Some are simply better investors than others. That's why there will always be as much money below average as above average.

    If you look at what everyone else is doing with options strategies, they are "one-off" strategies. Almost exclusively one type of short term market timing versus another type of short term market timer. Now, if one believes (as I do) that market timing is a losing long term strategy, we can see that the inefficiency is in how everyone else uses options. therefore, the efficiency is to go counter and use them as a disciplined long term hedge, not a short term "lever".

    Keep in mind that my strategies are, in the end, hedged investments. So they will underperform in rapidly rising markets, and outperform in down or flat markets. So it's not necessarily an always win, but a trade-off.

    Personally, that's just about all I do. I own only one stock, directly --- AAPL.

    Beyond that, I utilize calendar spreads and supplement them with naked puts after a drop. My thesis is that the market has up and downs and that after a drop, there will be a bounce. It's just a matter of when.

    Now, if I see a recession taking hold, then I'd be more likely to sell a naked call after a big rise instead of a naked put after a fall. But this is a rare event... it's just that I believe the market will always trend up. So, even if a market drop lasts a few years, the rolling naked put will eventually pay off. Similarly, a naked call (unless a "one off-market timer) will eventually lose.

    Additionally, since the whole strategy of calendar spreads is a hedge to begin with, I fare better than the overall market on a drop, so I'm willing to take a little more risk with a naked put. That way, I can supplement a bounce back and even outperform a rapidly rising market .. if it is volatile along the way.
    Apr 23, 2015. 06:51 AM | Likes Like |Link to Comment
  • Cantor Fitzgerald buys into Lumber Liquidators value proposition [View news story]
    Interesting "survey".

    Frankly, I'd rather just wait till next week and get the earnings report than bank on an anecdotal story from a person that has just recently joined SA and only posts on LL.
    Apr 22, 2015. 02:41 PM | Likes Like |Link to Comment
  • Cantor Fitzgerald buys into Lumber Liquidators value proposition [View news story]
    Hi Simplevalue,

    I believe there were at least several authors, just as prolific, on Herbalife.

    Once they get the first one through, the rest are semi-automatic.
    Apr 21, 2015. 08:22 PM | 1 Like Like |Link to Comment
  • Lumber Liquidators' Offer To Do Indoor Air Quality Testing Appears To Be A Sham [View article]
    Hi Course2Kid,

    Right after they investigate Jon Corzine and Ackerman.
    Apr 21, 2015. 05:14 PM | Likes Like |Link to Comment
COMMENTS STATS
4,349 Comments
7,581 Likes