LEAP Into These 2 Undervalued Chinese Education Stocks [View article]
I can't speak to the fundamentals, but these options have very low liquidity. The EDU Jan 110 call has an open interest of 6. The XUE Jan 10 calls have an open interest that's 40% higher (10).
If you want to hold to expiration, fine. Otherwise, it could be expensive to close your position.
Apple Options Still Cheap, But Earnings Are Looming [View article]
Agreed that holding LEAPs as a substitute for stock can be a good idea (I have them myself) The thing is, I don't count on seeing a very liquid market for many months in those 2013s -- so any position that involves selling LEAPs calls that may need to be adjusted can be a pain.
If you were talking about the Jan 2012s, that might be a different story.
Apple Options Still Cheap, But Earnings Are Looming [View article]
Good thoughts, but as far as the long position, investing more may actually be cheaper. That 2013 300 call at around $7100 now has a premium of about $40 to the share price. The 250 call would cost a lot more ($10,000 or so), but carries a lower premium, more like $20
And I'd probably wait to sell any short calls -- and do so on shorter-term options, perhaps 2 months out on volatility spikes. Or if not, consider selling a LEAP call spread (sell one, buy another at a higher strike). That way, you could at least have some more upside. It's kind of frustrating to sit on a long 300/short 360 spread for months on end if the stock's soaring past $400
How IBM Could Yield 4% or More in the Next 7 Years [View article]
Thanks TimR
You're right. Although I did not bring it up in the article, that same annual report showed that "growth markets" as a share of geographic revenues was 11% back in 2000 and 21% today.
The plan is for that share to "approach" 30% by 2015.
How Shorts and Longs 'Manipulate' the Market and Why You Should Ignore Them Both [View article]
Thanks for mentioning my article on LNKD, Rocco.
My own observation is that nothing is being manipulated any more than it ever was, it just happens a lot faster. In the "olden" days the stock specialist on the floor would "manipulate" the stock -- in some cases to actually help maintain liquidity (although he did profit by doing so).
Now anyone can be a "specialist" if they have enough capital.
Of course some things have changed -- a more active options market for one. Sometimes you'll see a big options purchase or sale (or spread) hit the options market and that in and of itself sends the stock up or down.
How Cisco Could Yield 7% or More in Just a Few Years [View article]
Anything can happen convoluted, but just a quick calculation: If MSFT got bought out for $50/share, that would be like $400 billion. That's more than AAPL's market cap these days.
Silver, Gold and Copper: A Long-Term View of Backwardation and Contango [View article]
Thanks Stephen. What may also be going on is a sort of shifting around of various types of silver. The "paper" silver as you call it is usually specified in terms of London Good Delivery Bars -- a highly specific form of silver (deliverable against futures contracts, for example, and the type of silver the Sprott Physical Trust has).
So if you're a dealer that just bought 11,000 ounces of sterling silver dinnerware (roughly equivalent to about 10,000 ounces of .999 fine), it may be just as silver, but not deliverable to satisfy "paper" demand. It could surely be refined and refabricated to do so, but that takes time.
Dividend Climate Change: What Happens When Interest Rates Rise? [View article]
Thanks for the insight Clay.
I was kid then, but it's interesting how history shapes perceptions. Is a CD or mortgage rate of 9% high or low? I guess it depends on when you grew up.
Dividend Climate Change: What Happens When Interest Rates Rise? [View article]
Wow, an 18% mortgage! I realize actual payments were lower than today because the prices were lower, but I just did a quick comparison on a 30-year fixed loan.
For a 5% mortgage, the amortizing payment is about $5.37 per $1000 borrowed, but more than $15 per $1000 borrowed for an 18% loan.
With the 5% loan, you pay off half your balance in a little over 16 years. With the 18% loan it takes 26 years. But when rates are that high, the extra payment to reduce the loan to a 15-year term seems (somewhat) minimal -- only $1 more per month per 1K borrowed.
Anyway thanks for the interesting insights into the differences between the Reagan and Carter years.
LEAP Into These 2 Undervalued Chinese Education Stocks [View article]
If you want to hold to expiration, fine. Otherwise, it could be expensive to close your position.
Apple Options Still Cheap, But Earnings Are Looming [View article]
Note to CBOE: I'd like to see more "mid-term" LEAPs so we don't have to choose between Jan 2012 and Jan 2013 -- perhaps a July 2012 series?
Apple Options Still Cheap, But Earnings Are Looming [View article]
If you were talking about the Jan 2012s, that might be a different story.
Apple Options Still Cheap, But Earnings Are Looming [View article]
And I'd probably wait to sell any short calls -- and do so on shorter-term options, perhaps 2 months out on volatility spikes. Or if not, consider selling a LEAP call spread (sell one, buy another at a higher strike). That way, you could at least have some more upside. It's kind of frustrating to sit on a long 300/short 360 spread for months on end if the stock's soaring past $400
Apple Options Still Cheap, But Earnings Are Looming [View article]
seekingalpha.com/artic...
I'm betting those options aren't so cheap -- but I haven't taken a look yet.
Dow/Gold Ratio Headed Lower [View article]
seekingalpha.com/artic...
Dow/Gold Ratio Headed Lower [View article]
Hold your fire. I'm not talking about gold. I'm talking about the Dow.
Right now more than 10% of it is an IBM/Gold ratio. Why not pick a broader index -- one that's a real index, not an average?
How IBM Could Yield 4% or More in the Next 7 Years [View article]
You're right. Although I did not bring it up in the article, that same annual report showed that "growth markets" as a share of geographic revenues was 11% back in 2000 and 21% today.
The plan is for that share to "approach" 30% by 2015.
How Shorts and Longs 'Manipulate' the Market and Why You Should Ignore Them Both [View article]
My own observation is that nothing is being manipulated any more than it ever was, it just happens a lot faster. In the "olden" days the stock specialist on the floor would "manipulate" the stock -- in some cases to actually help maintain liquidity (although he did profit by doing so).
Now anyone can be a "specialist" if they have enough capital.
Of course some things have changed -- a more active options market for one. Sometimes you'll see a big options purchase or sale (or spread) hit the options market and that in and of itself sends the stock up or down.
How Cisco Could Yield 7% or More in Just a Few Years [View article]
Your observation inspires me to coin a new law: "Richard's Corollary to Murphy's Law."
"Anything that can go wrong with a short options position probably won't, but if it does, boy, it'll go REALLY wrong"
Glad you enjoy my articles.
How Cisco Could Yield 7% or More in Just a Few Years [View article]
Silver, Gold and Copper: A Long-Term View of Backwardation and Contango [View article]
So if you're a dealer that just bought 11,000 ounces of sterling silver dinnerware (roughly equivalent to about 10,000 ounces of .999 fine), it may be just as silver, but not deliverable to satisfy "paper" demand. It could surely be refined and refabricated to do so, but that takes time.
How Cisco Could Yield 7% or More in Just a Few Years [View article]
Dividend Climate Change: What Happens When Interest Rates Rise? [View article]
I was kid then, but it's interesting how history shapes perceptions. Is a CD or mortgage rate of 9% high or low? I guess it depends on when you grew up.
Dividend Climate Change: What Happens When Interest Rates Rise? [View article]
For a 5% mortgage, the amortizing payment is about $5.37 per $1000 borrowed, but more than $15 per $1000 borrowed for an 18% loan.
With the 5% loan, you pay off half your balance in a little over 16 years. With the 18% loan it takes 26 years. But when rates are that high, the extra payment to reduce the loan to a 15-year term seems (somewhat) minimal -- only $1 more per month per 1K borrowed.
Anyway thanks for the interesting insights into the differences between the Reagan and Carter years.