Short-Selling Inverse Daily Leveraged Gold ETFs: An Alternative Long Play On (Paper) Gold [View article]
NUGT/DUST is another trading pair. If you sell call spreads on GLL/UGL or DUST/NUGT you end up with a 'de facto' iron condor-but you eliminate the put assignment risk-which always seems to be more of a nuisance than short call assignment. Of course, you can mix/match with any number of spreads. I'm currently short NUGT puts as part of an overall strategy. As far as put ratio backspreads, I suppose you could use both PRB and CRB to annihilate each other, but I personally haven't tried that one-yet. I also set FAS and FAZ bear call spreads in play, and wait for one or the other to bear fruit. I then wait for the other side to either capitulate (or I roll-out, or use as a hedge for a simple bull put spread to equal or exceed the premium or cost in play). Yesterday, for instance, I closed out the FAZ piece at a good profit, and today the FAS portion came substantially back-but not quite enough. One more down day should take care of business, but I have until May 18. I mention this only because the gold and silver inverse and regular ETFs are substantially similar. HOWEVER, it's a bit of a trick to catch the bid-ask at reasonable levels. I try to let someone else bite first.
The 'Retire Young' Portfolio: This Entertainment Giant Will Add Value [View article]
The div yield is about the size of Jiminy Cricket:1.18. Why not consider selling the JAN 17 2015 PUT @ 8.25, which gets one in DIS at a BEP of 54.25. And/or use the put premium that gets credited to your account to buy the 62.50 CALL (again JAN 17 2015) for 7.65. If you want to hedge the short put, as other folks did today, buy the 35 PUT for .90. Your BEP is now 55.15, but even if Donald Duck throws a tantrum, you are capped at $2,0125 downside. But, if you think 20% share appreciation is not a mere wish upon a star, you will trounce Pluto and Goofy-who are just long the stock. Go get'em mousekateers. M-I-C (see you real soon) K-E-Y (why? because we like you!) M-O-U-S-E.
S&P 500 Likely To Correct To 1476 Or Less During 2013 [View article]
Scenario planning with a reasonable take on the odds-very timely. I've noticed that the vix seems to have drawn a line in the sand-if the vix made a sound though, the previously muted background noise would now be a bit more intrusive. I think there is a predisposition for 7%, which means that a series of minor negatives will have more of an impact going forward, than say, a couple of weeks ago. Sometimes we can just whistle past the graveyard-other times the shadows are too frightening.
James River Coal (JRCC +30.1%) pushed higher all session after posting a Q1 loss that wasn’t as big as expected, but there's no apparent explanation for the stock's final-hour explosion on heavy volume. Some in the Twitter universe ruefully note Patriot Coal spiked just before declaring bankruptcy. Briefing.com reports JRCC debt is trading at distressed levels. [View news story]
ACI also spiked-perhaps related to what the HFT folks thought about union negotiations-But, these stocks have spiked before-on no news. Note that ACI opened down, stabilized and then rocketed up. Suppose you're the bookie and a client is up $50,000 on naked calls. It wouldn't take much to make a weak hand think twice about pocketing half that amount-even though the net $25,000 was taken with a lot left in premium. And/or some fund with enough cash sees the status, sells puts and buys calls-and then buys a boatload of shares. This happens about once a week-so I trade iron condors or various spreads. You just take what you're given, and patiently wait for the pendulum to swing back the other way. A fun game. I have a longer term LEAP position, which is bullish, as the world will use coal for another 217 years-give or take.
BP (BP): Q1 earnings of $4.2B beat by $1B. Q1 includes a full three months of production from BP's Skarv North Sea field and from its Angola PSVM facility, which both started producing at the end of last year. Lower unplanned downtime at refining plants lower costs also contributed to the earnings surprise. Shares +2.5% in London. (PR) [View news story]
This Summer Slowdown Will Be Different Than The Previous 3 [View article]
"Now I understand what you tried to say to me And how you suffered for your sanity And how you tried to set them free They would not listen, they did not know how Perhaps they'll listen now"
Apple: A $467 Price Floor Set By Share Repurchase Plan And Dividend Hike [View article]
Your 467 number is pretty good. I picked 460 and sold several of the May 18 460 puts after earnings for a quick pop. Had no idea they would pay off so fast. I've been short for several months prior to this as reflected in numerous comments. Not a bull or a bear-just an opportunist. But, however, you make money, be sure to give some to the Humane Society.
To Understand The Future You Must Know The Past [View article]
If you're confident as to your forecasted 20-30 percent 'drop', then why be in cash? Even a 5% correction could make an enormous profit by allocating a relatively small amount of capital to puts or inverse ETFs. At this point in time, a drop of the magnitude you forecast would create extraordinary consternation for governments and institutions. I'm not talking about a garden variety 'flash crash' but a drop that is reflective of a substantially diminished macro scenario. So, I don't follow your thesis or material that would initiate and sustain the forecast. You also stated that the next 'great bull market' begins at a point in time 5 years from now-2018, with the 'current bear market' continuing until then. At that time, we can presumably party like it's 1982. (Your next to last paragraph). I just hope your crystal ball doesn't overheat-but nothing wrong with preparing for a mood swing. Any thoughts on the winning team for the 2014 Super Bowl?
What Do Soaring Call Option Premiums Mean For Gold And Silver? [View article]
IV spikes-I'll toast to that. I've never traded precious metals (to any significant extent), but I like the iron condor concept. I did sell puts on NUGT a couple of days ago, and when that worked, I sold puts on DUST. So, I'm playing both sides against the middle. I didn't hedge the downside on NUGT since it was around 11 or so. The interesting thing is that a multiplicity of ETFs allows 'de facto' iron condors-as with selling puts above. One could also sell bear call spreads with DUST, NUGT, UGL, GLL-this de fact iron condor using calls precludes the typical put assignment issue that might occur with the traditional approach. And, GLD has huge volume and reasonable bid-ask spreads-as well as mini-options. Also, since gold and silver tend to move in tandem, one might as well create some option strategies with silver ETFs as well. All I try to do is capture premium-don't care if the metals go up or down. What I like is violent moves one way or the other-it's almost like everyday is earnings season for gold and silver. For anyone interested, my initial position with NUGT was to sell the JAN 2015 at-the-money puts. This play is still there, and if you're gold bullish, I think it may be one of the best plays available.
Be Careful Shorting A Market With Corporate ROIs Near All-Time Highs [View article]
Well, didn't want to bore people with an entire private conversation. But, be careful with stereotypes. Yes, it seems to be popular to assume that most doctors are poor investors, but where is the real evidence? Are mutual fund managers any better? The real point is that most retirees I've met have a healthy skepticism of markets and governments. This skepticism would persist regardless of GDP, unemployment data, today's DOW or S&P print. They don't tend to think about any data point as being singularly actionable-primarily because they doubt the legitimacy thereof.
Numbers Don't Lie - Why The Economy Is Not Good [View article]
The vast majority of people pay no attention to financial market news. More people know that Green Bay drafted Alabama running back, Eddie Lacy, than know anything at all about George Soro's new stake in JCP. But, if you really want to contemplate contemporary democracy, look at an overlay between deficits and regulation. And, in that context, ask if the three branches of government have changed since, say, 1970. Hint: has Congress actually abdicated its appropriation power to regulatory agencies?If so, how did this come about? What implications? Is regulation a substitute for an appropriations bill? If the FCC mandates 'fees' has it not usurped Congress? (Just one small example). In short, do we not have overt taxation? But, at the same time, the universe changed. Governments found that people would accept large deficits 9historically speaking) and Keynes ideas were taken and extrapolated beyond war time issues. As Congress abandoned the old notions of balanced books, political interest groups rushed in. Witness the rise of targeted transfer payments and tax preferences. As physical infrastructure deteriorates, it is replaced with various types of social insurance. Within a few decades, the distinction between investing for the future and borrowing from the future was lost-if not perverted. This is just a rambling comment-it would take several pages to really flesh this out.
Be Careful Shorting A Market With Corporate ROIs Near All-Time Highs [View article]
I don't think Chanos, Einhorn or anyone else would simply short the "market" based on any single financial metric. Nor would one simply short the "market" on a single technical indicator. Just this week, I played golf with a retired doctor, and we had a lengthy conversation about the stock market and the 'state of the nation' after the round. He was exceptionally well- read and keenly aware of the medical insurance issues of our time. In a nutshell, he had already concluded that the market had separated from our traditional notion of a capitalistic economy. In other words, he knew exactly the role played by the Federal Reserve, BOJ and other central banks in orchestrating and manipulating currencies and markets. I asked him about his investments, and it turns out he owns several thousand acres of farm land-which he leases out. He is heavy in various types of bonds, and 'trades' the stock market with a $500,000 account. He started the account with $300,000 when he retired a couple of years ago-so, as I say, this guy is pretty damn smart. But I think the point to be made is that intelligent retirees, who have managed to accumulate a reasonable estate, will give a quick answer to the current market valuations as being 'high'-but what they really 'feel' when you peel back the layers is quite a bit more complex. As this fellow noted-it's not so much about the current printed number of the S&P-it's a lot about the methodology employed to get there, why that methodology was needed to begin with, and what reasonable and rational expectations can be utilized for future planning.
What Do Soaring Call Option Premiums Mean For Gold And Silver? [View article]
Yes, the buyer of an option is always swimming upstream-a lot like the salmon. The patient grizzly bear simply waits for the salmon to make the last, feverish leap. But, if one has a time machine, buying options would be a great idea.
Yeah, I've noticed the insanity-I'm a tape watcher and this one is currently screaming to buy a put spread (or sell a call spread). Good luck with the CPA exam-I took it a generation or so ago, along with three bar exams. It's a good item to have on your resume-maybe your tombstone. As far as making money, though, know when to hold'em and when to short'em.
GE Capital (GE +2.5%) cuts off lending to gun shops in response to public backlash since the Sandy Hook shootings. Though the company isn't the first financial firm to back away from involvement with the gun industry, the development puts the spotlight back on sellers such as Dick's Sporting Goods (DKS -0.4%), Wal-Mart (WMT -1.2%), and Cabela's (CAB +0.9%) which could see more foot traffic. It's also of interest to gun manufacturers Smith & Wesson (SWHC +0.8%) and Sturn Ruger (RGR -0.8%) - wallowing around with relatively low P-E ratios with future demand tough to forecast. [View news story]
I'm just as concerned as anybody about the level of violence in this country-but the gutless pc strategy is just as pathetic in its own way-and while we're at it some idiot county in Florida wants to kill a Beagle puppy because some kid stuck his face in range of the poor animal as it was eating- I hope I live long enough to see a monstrous backlash against this nation of jellyfish-
Short-Selling Inverse Daily Leveraged Gold ETFs: An Alternative Long Play On (Paper) Gold [View article]
Of course, you can mix/match with any number of spreads. I'm currently short NUGT puts as part of an overall strategy.
As far as put ratio backspreads, I suppose you could use both PRB and CRB to annihilate each other, but I personally haven't tried that one-yet. I also set FAS and FAZ bear call spreads in play, and wait for one or the other to bear fruit. I then wait for the other side to either capitulate (or I roll-out, or use as a hedge for a simple bull put spread to equal or exceed the premium or cost in play). Yesterday, for instance, I closed out the FAZ piece at a good profit, and today the FAS portion came substantially back-but not quite enough. One more down day should take care of business, but I have until May 18. I mention this only because the gold and silver inverse and regular ETFs are substantially similar. HOWEVER, it's a bit of a trick to catch the bid-ask at reasonable levels. I try to let someone else bite first.
The 'Retire Young' Portfolio: This Entertainment Giant Will Add Value [View article]
Go get'em mousekateers. M-I-C (see you real soon) K-E-Y (why? because we like you!) M-O-U-S-E.
S&P 500 Likely To Correct To 1476 Or Less During 2013 [View article]
I think there is a predisposition for 7%, which means that a series of minor negatives will have more of an impact going forward, than say, a couple of weeks ago. Sometimes we can just whistle past the graveyard-other times the shadows are too frightening.
James River Coal (JRCC +30.1%) pushed higher all session after posting a Q1 loss that wasn’t as big as expected, but there's no apparent explanation for the stock's final-hour explosion on heavy volume. Some in the Twitter universe ruefully note Patriot Coal spiked just before declaring bankruptcy. Briefing.com reports JRCC debt is trading at distressed levels. [View news story]
Note that ACI opened down, stabilized and then rocketed up. Suppose you're the bookie and a client is up $50,000 on naked calls. It wouldn't take much to make a weak hand think twice about pocketing half that amount-even though the net $25,000 was taken with a lot left in premium. And/or some fund with enough cash sees the status, sells puts and buys calls-and then buys a boatload of shares.
This happens about once a week-so I trade iron condors or various spreads. You just take what you're given, and patiently wait for the pendulum to swing back the other way. A fun game. I have a longer term LEAP position, which is bullish, as the world will use coal for another 217 years-give or take.
BP (BP): Q1 earnings of $4.2B beat by $1B. Q1 includes a full three months of production from BP's Skarv North Sea field and from its Angola PSVM facility, which both started producing at the end of last year. Lower unplanned downtime at refining plants lower costs also contributed to the earnings surprise. Shares +2.5% in London. (PR) [View news story]
This Summer Slowdown Will Be Different Than The Previous 3 [View article]
And how you suffered for your sanity
And how you tried to set them free
They would not listen, they did not know how
Perhaps they'll listen now"
From "Vincent"-Don McLean
Apple: A $467 Price Floor Set By Share Repurchase Plan And Dividend Hike [View article]
Not a bull or a bear-just an opportunist. But, however, you make money, be sure to give some to the Humane Society.
To Understand The Future You Must Know The Past [View article]
At this point in time, a drop of the magnitude you forecast would create extraordinary consternation for governments and institutions. I'm not talking about a garden variety 'flash crash' but a drop that is reflective of a substantially diminished macro scenario.
So, I don't follow your thesis or material that would initiate and sustain the forecast.
You also stated that the next 'great bull market' begins at a point in time 5 years from now-2018, with the 'current bear market' continuing until then. At that time, we can presumably party like it's 1982. (Your next to last paragraph).
I just hope your crystal ball doesn't overheat-but nothing wrong with preparing for a mood swing. Any thoughts on the winning team for the 2014 Super Bowl?
What Do Soaring Call Option Premiums Mean For Gold And Silver? [View article]
I've never traded precious metals (to any significant extent), but I like the iron condor concept. I did sell puts on NUGT a couple of days ago, and when that worked, I sold puts on DUST. So, I'm playing both sides against the middle. I didn't hedge the downside on NUGT since it was around 11 or so.
The interesting thing is that a multiplicity of ETFs allows 'de facto' iron condors-as with selling puts above. One could also sell bear call spreads with DUST, NUGT, UGL, GLL-this de fact iron condor using calls precludes the typical put assignment issue that might occur with the traditional approach. And, GLD has huge volume and reasonable bid-ask spreads-as well as mini-options.
Also, since gold and silver tend to move in tandem, one might as well create some option strategies with silver ETFs as well. All I try to do is capture premium-don't care if the metals go up or down. What I like is violent moves one way or the other-it's almost like everyday is earnings season for gold and silver. For anyone interested, my initial position with NUGT was to sell the JAN 2015 at-the-money puts. This play is still there, and if you're gold bullish, I think it may be one of the best plays available.
Be Careful Shorting A Market With Corporate ROIs Near All-Time Highs [View article]
Numbers Don't Lie - Why The Economy Is Not Good [View article]
But, if you really want to contemplate contemporary democracy, look at an overlay between deficits and regulation. And, in that context, ask if the three branches of government have changed since, say, 1970. Hint: has Congress actually abdicated its appropriation power to regulatory agencies?If so, how did this come about? What implications? Is regulation a substitute for an appropriations bill? If the FCC mandates 'fees' has it not usurped Congress? (Just one small example). In short, do we not have overt taxation?
But, at the same time, the universe changed. Governments found that people would accept large deficits 9historically speaking) and Keynes ideas were taken and extrapolated beyond war time issues. As Congress abandoned the old notions of balanced books, political interest groups rushed in. Witness the rise of targeted transfer payments and tax preferences. As physical infrastructure deteriorates, it is replaced with various types of social insurance. Within a few decades, the distinction between investing for the future and borrowing from the future was lost-if not perverted.
This is just a rambling comment-it would take several pages to really flesh this out.
Be Careful Shorting A Market With Corporate ROIs Near All-Time Highs [View article]
Just this week, I played golf with a retired doctor, and we had a lengthy conversation about the stock market and the 'state of the nation' after the round. He was exceptionally well- read and keenly aware of the medical insurance issues of our time. In a nutshell, he had already concluded that the market had separated from our traditional notion of a capitalistic economy. In other words, he knew exactly the role played by the Federal Reserve, BOJ and other central banks in orchestrating and manipulating currencies and markets.
I asked him about his investments, and it turns out he owns several thousand acres of farm land-which he leases out. He is heavy in various types of bonds, and 'trades' the stock market with a $500,000 account. He started the account with $300,000 when he retired a couple of years ago-so, as I say, this guy is pretty damn smart.
But I think the point to be made is that intelligent retirees, who have managed to accumulate a reasonable estate, will give a quick answer to the current market valuations as being 'high'-but what they really 'feel' when you peel back the layers is quite a bit more complex. As this fellow noted-it's not so much about the current printed number of the S&P-it's a lot about the methodology employed to get there, why that methodology was needed to begin with, and what reasonable and rational expectations can be utilized for future planning.
What Do Soaring Call Option Premiums Mean For Gold And Silver? [View article]
But, if one has a time machine, buying options would be a great idea.
Irrational Exuberance: Lumber Liquidators Edition [View article]
Good luck with the CPA exam-I took it a generation or so ago, along with three bar exams. It's a good item to have on your resume-maybe your tombstone.
As far as making money, though, know when to hold'em and when to short'em.
GE Capital (GE +2.5%) cuts off lending to gun shops in response to public backlash since the Sandy Hook shootings. Though the company isn't the first financial firm to back away from involvement with the gun industry, the development puts the spotlight back on sellers such as Dick's Sporting Goods (DKS -0.4%), Wal-Mart (WMT -1.2%), and Cabela's (CAB +0.9%) which could see more foot traffic. It's also of interest to gun manufacturers Smith & Wesson (SWHC +0.8%) and Sturn Ruger (RGR -0.8%) - wallowing around with relatively low P-E ratios with future demand tough to forecast. [View news story]
I hope I live long enough to see a monstrous backlash against this nation of jellyfish-