Six Canadian banks get a one-notch downgrade from Moody's as high levels of consumer debt and bubbly housing prices leave the lenders "more vulnerable than in the past." The agency also notes banks' reliance on "confidence-sensitive wholesale funding, which is obscured by limited public disclosure." Among those cut: BMO, BNS, CM, TD. [View news story]
The increased household debt/income ratio is an inevitable result of ultra-low interest environment. Canadian banks are still maintaining a favorable spread between mortgage and deposit sides. As mentioned by Uunderhill, several banks are buying international banks in order to boost retail deposits.
I never invested in bank stocks. But if this downgrade drives the stock prices low enough, I wouldn't mind jumping in and make easy money (if the market doesn't crash :P).
Six Canadian banks get a one-notch downgrade from Moody's as high levels of consumer debt and bubbly housing prices leave the lenders "more vulnerable than in the past." The agency also notes banks' reliance on "confidence-sensitive wholesale funding, which is obscured by limited public disclosure." Among those cut: BMO, BNS, CM, TD. [View news story]
They downgraded pretty much all the big banks? This is entertaining.
Making Money W/ Nokia The "Long Leverage Way" [View instapost]
I agree with you. Although I didn't take profit on my calls before the earnings - I was overly optimistic. NOK is a long-term play. Probably will take 2 years for the comeback in market share.
Autodesk (ADSK +4.3%) jumps after Goldman upgrades shares all the way to Conviction Buy from Sell. The firm is encouraged by the CAD software giant's improved execution, as well as accelerating growth in the non-residential construction space. Shares are a little above where they traded when Goldman downgraded them to Sell in Dec. '11. [View news story]
Making Money W/ Nokia The "Long Leverage Way" [View instapost]
Just came across this blog. I am also a super bull. (So I don't know if I can correct/criticize you much lol). On top of buying calls, I am also selling naked puts.
This might sound crazy, but I've got out of all my positions in other stocks (with a gain in every stock :D) just to have the cash handy in case NOK falls more.
Japanese shares jump in early trading, with the Nikkei Average up 2.2% at 10,844, as the dollar trades around its highest level against the yen since mid-2010. Once again, exporters lead the charge: Mazda (MZDAY.PK +7.6%), Sony (SNE +3.9%), Honda (HMC +2.9%), Advantest(ATE +6.5%) and Tokyo Electron (TOELY.PK). [View news story]
Thank you bilton! Love your explanations. Mine were just so dry, no wonder people are not getting what I am saying. I am always bad with examples.
Nokia options are very volitile. Traders could try to take advantage of that...or, to make it easy, just write low strick price puts.
----------------------... I gotta have to clarify myself again for my last comment, bear with me, I've had less than 8 hours of sleep in the past three days.
In my last comment, "If you are writting a put, you are promising to give the put BUYERS the shares on the contract." --This is ambigious, or, wrong...put writters are giving the put holders the shares *to sell*, not that the put holders will long the stock after exercising the option... you know what I mean. bilton has explained it correctly. =)
Essentially put writters are buying back the shares at the stike price if the put options get exercised.
For a stock like Nokia, like Rookie described earlier, writting puts is a lucrative play. Writing puts implies you are bullish on the stock. If the price drops, and put option gets exercised, you get to load up at low prices.
No, that's not true. If you are shorting a stock, you are borrowing shares. If you buy a put option, it's a right to sell at strick price not an obligation.
If you are writting a put, you are promising to give the put BUYERS the shares on the contract.
"so put holders may exercise puts if the loss is less than the cost of buying. " - I will correct myself on this misstatement.
Put option holders will exercise their options if and only if their strike price is higher than the current stock price. So they are exercising to recover some loss on intial cost and/or to make a profit. They won't exercise the put options otherwise; shorters don't have "options" but to buy back the shares later.
@oldwarrior, a put option is a right to sell, NOT an obligation, you can choose to exercise it or not. Put options' payoff curve is fundamentally different from shorters who borrowed the shares. When stock price goes up, for options, the pressure comes from call holders exercising their options, as well as put holders who want to minimize their loss. This pushes the price up and shorters are worse off. If the option doesn't get exercised it will be worthless on the expiration day, so put holders may exercise puts if the loss is less than the cost of buying. But put option holders don't have to exercise the stock, their downside is limited, they are different from shorters who have to return borrowed shares at some point.
Nokia's Shares Are Benefiting From Irrational Exuberance [View article]
Sorry, I should have clarified. The volatility is acceptable, however, the 10% loss, is unjustified if taking the middle-long term into consideration. i.e. it was highly unlikely that the stock would tank 10% and not come back for a long time *on that piece of news* (if all investors were that cautious and careful then nobody would be losing money!). The only solid game changer at the moment is Q4 earnings. If the stock continued to tank on Thursday, it would be likely due to rumors/pre-annoucements of poor Q4 results.
Tax evasion is a very sensitive issue for every business. Based on what has been revealed by the Indian income tax department, "Nokia has changed its accounting model and is reorganizing its existing business model", Nokia's case is extremely ambiguous at this moment. I remain highly skeptical of the accusations and the potential negative impacts at this point.
Others have also pointed out that tax issues will take years to resolve, and the Indian government could easily "change their mind" due to many other considerations.
I'm sure we will all follow up on the news and watch what happens. My opinions can certainly change, but if and only if situation changes fundamentally.
Six Canadian banks get a one-notch downgrade from Moody's as high levels of consumer debt and bubbly housing prices leave the lenders "more vulnerable than in the past." The agency also notes banks' reliance on "confidence-sensitive wholesale funding, which is obscured by limited public disclosure." Among those cut: BMO, BNS, CM, TD. [View news story]
I never invested in bank stocks. But if this downgrade drives the stock prices low enough, I wouldn't mind jumping in and make easy money (if the market doesn't crash :P).
Six Canadian banks get a one-notch downgrade from Moody's as high levels of consumer debt and bubbly housing prices leave the lenders "more vulnerable than in the past." The agency also notes banks' reliance on "confidence-sensitive wholesale funding, which is obscured by limited public disclosure." Among those cut: BMO, BNS, CM, TD. [View news story]
Making Money W/ Nokia The "Long Leverage Way" [View instapost]
I'm getting RIMM puts for BB10 launch.
Making Money W/ Nokia The "Long Leverage Way" [View instapost]
Making Money W/ Nokia The "Long Leverage Way" [View instapost]
Making Money W/ Nokia The "Long Leverage Way" [View instapost]
Autodesk (ADSK +4.3%) jumps after Goldman upgrades shares all the way to Conviction Buy from Sell. The firm is encouraged by the CAD software giant's improved execution, as well as accelerating growth in the non-residential construction space. Shares are a little above where they traded when Goldman downgraded them to Sell in Dec. '11. [View news story]
Making Money W/ Nokia The "Long Leverage Way" [View instapost]
This might sound crazy, but I've got out of all my positions in other stocks (with a gain in every stock :D) just to have the cash handy in case NOK falls more.
Japanese shares jump in early trading, with the Nikkei Average up 2.2% at 10,844, as the dollar trades around its highest level against the yen since mid-2010. Once again, exporters lead the charge: Mazda (MZDAY.PK +7.6%), Sony (SNE +3.9%), Honda (HMC +2.9%), Advantest(ATE +6.5%) and Tokyo Electron (TOELY.PK). [View news story]
Here To Make (Quick) Money With Nokia [View instapost]
Here To Make (Quick) Money With Nokia [View instapost]
Nokia options are very volitile. Traders could try to take advantage of that...or, to make it easy, just write low strick price puts.
----------------------...
I gotta have to clarify myself again for my last comment, bear with me, I've had less than 8 hours of sleep in the past three days.
In my last comment, "If you are writting a put, you are promising to give the put BUYERS the shares on the contract." --This is ambigious, or, wrong...put writters are giving the put holders the shares *to sell*, not that the put holders will long the stock after exercising the option... you know what I mean. bilton has explained it correctly. =)
Essentially put writters are buying back the shares at the stike price if the put options get exercised.
For a stock like Nokia, like Rookie described earlier, writting puts is a lucrative play. Writing puts implies you are bullish on the stock. If the price drops, and put option gets exercised, you get to load up at low prices.
Here To Make (Quick) Money With Nokia [View instapost]
If you are writting a put, you are promising to give the put BUYERS the shares on the contract.
http://bit.ly/GZXqPm
Here To Make (Quick) Money With Nokia [View instapost]
Put option holders will exercise their options if and only if their strike price is higher than the current stock price. So they are exercising to recover some loss on intial cost and/or to make a profit. They won't exercise the put options otherwise; shorters don't have "options" but to buy back the shares later.
Here To Make (Quick) Money With Nokia [View instapost]
Nokia's Shares Are Benefiting From Irrational Exuberance [View article]
Tax evasion is a very sensitive issue for every business. Based on what has been revealed by the Indian income tax department, "Nokia has changed its accounting model and is reorganizing its existing business model", Nokia's case is extremely ambiguous at this moment. I remain highly skeptical of the accusations and the potential negative impacts at this point.
Others have also pointed out that tax issues will take years to resolve, and the Indian government could easily "change their mind" due to many other considerations.
I'm sure we will all follow up on the news and watch what happens. My opinions can certainly change, but if and only if situation changes fundamentally.