Friday The 13th's Follow-Through Failure Forecast [View article]
Europe was a big topic of conversation in this week's Stock World Weekly, it's a free trial if you haven't tried it already: http://bit.ly/wf3mDE
TZA is a good choice - one of our disaster hedges along with SCO and EDZ. SCO is already a huge winner for us as we took them at oil $103.50. With TZA, rather than spend now $23.81 for the stock, we like to play a spread. For example, you can pick up the Feb $22/27 bull call spread for $1.50 and sell the $22 puts for $1.35 so you have the $5 spread for net $15 and your worst case is you end up owning them for net $22.15 so a bit of a cushion vs. owning the stock and, depending on your margin - you tie up less cash.
You can make that trade far less directional by using a different offset - something bullish you REALLY want to own if the market gets cheaper. Let's say, for example, you like BTU below $35 - you can sell the BTU Feb $34 puts for $1.45 and now you have net .05 on the $5 spread and if the market falls further, you get paid on the TZA and probably own BTU for net $34.05 but, if the market goes up and your TZA goes worthless on you - it's very unlikely BTU goes down and that makes your insurance play free.
There are many beaten-down stocks like X, CHK, TM, HPQ.. that you can use as bullish offsets to bearish hedges - it makes your insurance a lot cheaper when you play it like this but, of course, it's very important that you actually want to establish a long-term position in the offsetting stock you are selling puts against.
Hmm, not sure how to respond to that as I do have a serious moral issue with all this but it's my "job" to figure out how to make money, no matter what is happening. It's also my job to point out what's really going on in the markets, where I do get to exercise my moral outrage at the system that, yes, I do participate in.
Do we compare this to a situation where the whole town is looting the Best Buy and I have to decide whether to go inside the store and buy a TV for $500 or stand outside and buy the same TV for $50 from one of the looters? Do I have the right to criticize the looters while benefiting from the looting?
Or am I simply taking advantage of an obvious catastrophe like the Baltimore Orioles and simply making sensible bets that they are likely to lose, which I can profit from without "hurting" the team and I do still have the right of any fan to criticize the incompetence or am I not allowed to because I bet against them?
Governments are like that too. Can you criticize Obama while earning a living in America? Can you want the system to change from the inside while still playing by the current system's rule or do you make a more effective statement by refusing to participate and attempting to tear it down from without?
I don't think you have to "agree" with the bulls in order to bet that the bull will run towards red but I certainly see your point but I think it would be a lot more fake to pretend I agreed with bullish investors, just because we know how to take advantage of their trading patterns...
CROX breaking up. GRMN flying, lots of our stuff doing well, I think we're getting a turn up here.
NVDA still down but I still like them.
TASR just getting worse and worse. Huge volume, 5x normal day so far with over 10% of the float being dumped this morning. There are 17M shares short at around 10 and they'll cover at $7.50 so this is probably the right spot.
Deceptive, unethical and only illegal if you get caught which is impossible to prove and why very rich people belong to very exclusive clubs where they can talk. While it may be a problem if you were to dump Google and suddenly buy it back as it would leave a trail, if I happen to mention to you in the clubhouse that this week that I'm going to be dumping my Googles by lunch on Friday if they don't cure cancer by then and you just happen to be looking to execute a block purchase of Google this week (which you may have mentioned to me over cocktails) then it is sheer coincidence when I dump my shares and cause a panic and you happen to decide that's a good time to buy. Next week, you happen to hear me mention a desire to get into RIMM and you happen to mention to me that you are sick of yours and giving them until Thurday's close to come out with a phone that drives your car or you're getting out. And round and round it goes...
Cramer - hypocrisy or not the guy is good. He gets that hype machine cranking and drops a few street.com articles around that he then uses to back up what he's saying and it's amazing what he gets done but we make a fortune shorting his crap once they run it up.
Michael - that's a great call you made and I like your work on the blog! Very good stuff.
Friday The 13th's Follow-Through Failure Forecast [View article]
TZA is a good choice - one of our disaster hedges along with SCO and EDZ. SCO is already a huge winner for us as we took them at oil $103.50. With TZA, rather than spend now $23.81 for the stock, we like to play a spread. For example, you can pick up the Feb $22/27 bull call spread for $1.50 and sell the $22 puts for $1.35 so you have the $5 spread for net $15 and your worst case is you end up owning them for net $22.15 so a bit of a cushion vs. owning the stock and, depending on your margin - you tie up less cash.
You can make that trade far less directional by using a different offset - something bullish you REALLY want to own if the market gets cheaper. Let's say, for example, you like BTU below $35 - you can sell the BTU Feb $34 puts for $1.45 and now you have net .05 on the $5 spread and if the market falls further, you get paid on the TZA and probably own BTU for net $34.05 but, if the market goes up and your TZA goes worthless on you - it's very unlikely BTU goes down and that makes your insurance play free.
There are many beaten-down stocks like X, CHK, TM, HPQ.. that you can use as bullish offsets to bearish hedges - it makes your insurance a lot cheaper when you play it like this but, of course, it's very important that you actually want to establish a long-term position in the offsetting stock you are selling puts against.
Wild Weekly Wrap Up: Cash Is King [View article]
Thanks, Jim!
Wild Weekly Wrap Up: Cash Is King [View article]
Do we compare this to a situation where the whole town is looting the Best Buy and I have to decide whether to go inside the store and buy a TV for $500 or stand outside and buy the same TV for $50 from one of the looters? Do I have the right to criticize the looters while benefiting from the looting?
Or am I simply taking advantage of an obvious catastrophe like the Baltimore Orioles and simply making sensible bets that they are likely to lose, which I can profit from without "hurting" the team and I do still have the right of any fan to criticize the incompetence or am I not allowed to because I bet against them?
Governments are like that too. Can you criticize Obama while earning a living in America? Can you want the system to change from the inside while still playing by the current system's rule or do you make a more effective statement by refusing to participate and attempting to tear it down from without?
I don't think you have to "agree" with the bulls in order to bet that the bull will run towards red but I certainly see your point but I think it would be a lot more fake to pretend I agreed with bullish investors, just because we know how to take advantage of their trading patterns...
Great topic for debate!
Options Trader: Thursday Outlook [View article]
Options Trader: Thursday Outlook [View article]
Applefly $10KP/$25KP - Rolling $155 callers up to $160s for $3 XXX Same for DTP
Options Trader: Thursday Outlook [View article]
NVDA still down but I still like them.
TASR just getting worse and worse. Huge volume, 5x normal day so far with over 10% of the float being dumped this morning. There are 17M shares short at around 10 and they'll cover at $7.50 so this is probably the right spot.
Options Trader: Thursday Outlook [View article]
Are Tuesdays Good for Reversals? [View article]
Cramer - hypocrisy or not the guy is good. He gets that hype machine cranking and drops a few street.com articles around that he then uses to back up what he's saying and it's amazing what he gets done but we make a fortune shorting his crap once they run it up.
Michael - that's a great call you made and I like your work on the blog! Very good stuff.