Mmarrkk

Options Trader Thursday Outlook: CRE Data Day

I'd rather ask Timmy a couple of other questions:

1. How does one have the **lls to go from a tax cheat to the Treasury Sec.? Or better yet, how does one avoid criminal prosecution when it is found that you are a tax cheat?

2. How does one request additional taxation of the common, everyday citizen when the Treasury Sec. cheated on his own taxes?

3. As Treasury Sec., how does Timmy intend on paying off the trillions of dollars of debt he and his boss are saddling us and our children with?

4. Why doesn't he scream about the additional deficit spending being taken on by his boss? Trillions more spending in healthcare reform, even if you cheat and use the gov't estimates which we know will be at least 50% too low!

Here's What World Markets Are Telling Income Investors to Do

Can you clarify this statement for me? I thought if you sell a Put option, you have the obligation to BUY the stock at the option price? So how can the losses be "UNLIMITED"?

If I sell a GE August $9 Put option, I could be forced to buy 100 shares of GE at $9 anytime between now and the August expiration date. So, if GE drops to $1, I still have to buy it at $9. In this scenario, my MAXIMUM loss is the $9 minus what I sold the option for. The loss can get no larger as GE can only go to zero!

If GE goes to $25, then the counterparty who bought the Put would be insane to exercise a Put option that allows them to sell their shares at $9.

Am I missing something or are you?


On Jun 22 02:26 AM Al-USA wrote:

> Good article Mr. Wachtel.
>
> Selling (shorting) put options is a good strategy but, it must be
> stated, there is the possibility of UNLIMITED losses, if the stock/market
> heads up instead, so only the very skilled options trader should
> attempt this. Readers, always do your homework when someone advises
> a particular strategy, good luck to all

CEOs Must Bring Investors Along for the Ride (WSJ)

A reasonable question: if shareholders don't like the actions of the BOD, why aren't the BOD's voted out each year when the proxies come around?

I think the answer is that the majority of the shareholders like the job being done and thus, vote in approval. Hey, I hate the job the current POTUS is doing but there was an election! Each year, some of the BOD's of all of these companies go up for a vote. And each year, they receive a majority of the shareholders' votes. So, you see, the shareholders DID vote and they decided to keep the BOD's, the same ones you all are saying are doing a putrid job. Could it be that you are in the minority?

Options Trader: Tuesday Outlook

Old: triple down on CHK at this point. If it falls a bit further, dump more in. Within the next 3 years you will have at least doubled your money if not a heck of a lot more.

Options Trader: Tuesday Outlook

Thanks Phil for your followup.

Why build the terminals if gas won't come here? The LNG terminal projects were initiated when we were suffering through shortfalls in NG (only 3 years ago the forecast was big shortfalls) and we didn't have the big shale gas discoveries like the Haynesville, Marcellus, etc.. Since it takes several years to finance, design and build a terminal, the work was kicked off only to find the market whipsawing the builders. Bad investments to say the least.

Also, the LNG re-gas terminals cannot store large quantities of gas so their use as storage is not possible. And to your comment that these terminals can be used to send LNG out of the country, well Phil that is not phyically possible. The LNG terminals being built here in the US are re-gas terminals...the take LNG off of ships, decrease the pressure and re-gasify the product for pipeline use. These plants cannot reverse this process...they don't have the equipment needed and converting them to do this is a multi-billion dollar exercise that will take a few years. So, that was a misstatement. Now, there are some folks talking about export LNG as we (US) grow our natural gas business and more wells are drilled, etc. Aubrey of CHK has mentioned it, although I really don't think he's all that serious about it. But LNG export facilities are 3 year projects and require 20-year guarenteed supply contracts for 3-8 TCF gas. I seriously doubt anyone would put the money into this type of a project with US gas needs being so volatile.

Options Trader: Tuesday Outlook

Phil: I finally followed that LNG link you inserted in your post. I must admit, that is the most misleading, dishonest website I've seen in a long time. That Riley guy is a flake and I really am sorry to see you stooping to a point of giving him any credibility. I've disagreed with you many times on many energy related subjects but always felt that you were a reasonable, honorable person who did some good analysis, just little which I agreed to. That's healthy as there are always 2 sides to a trade. Zman speaks highly of you as well and that always made me feel that I should at least listen to your opinions. However, that link to the quack's website has me seriously re-thinking the above.

The site links to a listing of headlines supposedly showing the corruption of LNG. When in fact, most of the links relate to bribery/corruption at a contracting/constructi... level, not the business case of the LNG plant or anything else. It is all about a contractor trying to secure a construction contract. These have occurred in the building industry, most industries located in Chicago (sorry, a small mob-related dig) and probably half of any work done with Washington DC policiticians from both parties. But to try and reach from that to a "LNG is corrupt" stance is beyond the pale. Once I finished puking over that guy's website, I decided to respectfully ask that you take that link out of your post. It is below you and your standards.

Options Trader: Tuesday Outlook

Phil: I'm not sure I'd characterize the current storage levels as "drifting along at the upper end of the 5-year average storage levels, a little below last year ". As I see it, the 5 year average high/low band is about 1000 BCF in width and we are currently only about 60-70% in to the range, leaving us 30-40% below the upper levels. I just can't see how that is "along at the upper end". Not even close. Above the median? Yes. just below the upper end? Not really. We are 300 BCF below the upper end. That's a lot. And to say we are "a little below last year" is again a misstatement! Last year and 2006 were at the very extreme of the range and we are far from it.

Basic premise is probably okay...we are seeing supply running higher than last year and demand falling, but our storage is still about average...which is good. The storage is there to help ensure we can get through a severe winter and/or a supply disruption. Like, a hurricaine in the GOM or some other disaster.

I don't see the storage as a way to game the system nor do I see LNG as a dirty scheme. But you have a basic distrust of my industry so I've grown to expect it. Truth of the matter is that no one will be able to attract large quantities of LNG to the shores of the U.S. due to pricing differentials with the Far East. Why send gas to the U.S. ofr $7, $8, or even $12/mmBTU when it can go the the Far East for $15??

My read on pricing/supply: prices will probably drop a bit more; when they hit $6-7, new drilling for expensive gas will stop. When it stops, you'll see supply drop as our new plays can only sustain production levels with intensive new drilling. As the supply drops, you'll see prices start to go back up again. As they reach $12-13, drilling will accellerate and the supply will go back up and the whole cycle will repeat itself. All of this assuming no large scale disasters that take GOM supply offline or that pull the remaining LNG out of the US market.

The Triple Play: Oil Addicts, The Credit Crunch and Deflation

Well said Mixter. If any other industry would have lost 600,000 jobs, there would have been an uproar. Big Oil (and Little Oil) invest huge amounts of capital, employ hundreds of thousands of people and support millions of investors/shareholders... Those goofy Senators should have been kissing the feet of the oil exec's in front of them!

But, the fact that almost 50% of the people in the US voted for AlGore and will probably vote for the Marxists running for president reallys shows that a huge percentage of the US voters are clueless and ignorant to basic business acumen. Ye reap what ye sow. No drilling offshore East/West Coast or ANWR, $5/gal gasoline. No big surprise!