Phil's Stock World, Stock Options Trading & Information

Market manipulation…. One of the things I’ve gained from this site is the concept of market manipulation. I never thought it was so prevalent, but now I know it is. I actually consider its effect when I make trades. Several days ago, when AAPL was moving toward 220 I sold 210 calls. My reasoning was that they will probably pin this month at 210. They came in big time as the stock moved ever closer to 210. I agree with Phil’s comment that one of the things we need to do is find out what they are manipulating, and how, and hitch a ride. They are doing this with several equities. I’ve actually seen one article describing several equities that were being manipulated to pin at expiration each month, and describing how it was done, and of course Phil has described it well. In some ways it’s easier to figure this out than it is a ‘normal’ market behavior, and thus easier to make money in certain equities.

- Iflantheman, Jan 15, 2010

Phil - I’m with you just little bit longer than a month and you can not imagine how happy I am now, and not just because my P/L improved ( and I’m sure that it will be even better), but I found that the worst thing in trader’s carrier is a LONELINESS. Here I found so many bright good guys, I looked for this service for years. THANK YOU AND TAKE GOOD CARE OF YOURSELF BECAUSE I PLAN TO STAY HERE AND RIDE THIS CREASY MARKET WITH YOU FOR ANOTHER 20-30 YEARS

- Tchayipov, Dec 15, 2009

Its been a \"perfect\" month. Every stock I wrote calls against looks like it will be called away next week, every put I wrote will expire worthless. Thanks Phil, now I need some new buy/write candidates, or the new 100K portfolio….

- Barfinger, Aug 13, 2009

Phil - I followed your great pick re F and sold short the 1011 2.50 puts (200 contracts) and paid for the next 10 years of membership fees…. Thanks!

- Gel1, May 3, 2009

Hello Phil, Thanks for the heads up on the comming sell off on friday, and the bs job yesterday. your our guiding light!

- Microflux, Apr 22, 2009

Hey Phil - writing to thank you! First of all, and I know you have heard this a few times form some others - the portfolio updates you have done - with entries and targets and even margin reqs are invaluable! I find myself understanding what is done here IN THEORY most of the time..however, there is a much bigger difference in placing and setting up the hedges properly than just understanding…This has been eye opening for me and Ifeel like I just took a major step in trading during the last week.

- Bcfla, Apr 20, 2009

GLD I took out my callers and rolled down my longs this morning, woo hoo!

- Ephmen85, Mar 18, 2009

1,000% on SKF - It was a freakin' monster into the center field bleachers! I saw it play out live and squawked it from the StockTwits ID which 14k people follow: Home run trade of the week @philstockworld just knocked cover off ball w $SKF puts. http://bit.ly/piBL Great trade bud!

- Phil Pearlman - StockTwits, Feb 21, 2009

Thanks for your thoughts against buying BP ahead of earnings (yesterdays’ member comments). It announced a loss of $3.3b and is down 3% in pre-market but still just above the bottom of the chaneel of $40-$50.

- mSquare, Feb 3, 2009

Phil/BCS - Didn’t realise they traded here. Should’ve known really. Thanks for the tip. managed to pick some up just before the close at a 15% discount to the UK closing price.

- DB, Jan 16, 2009

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Archive for March 11th, 2008

Terrific Tuesday Wrap-Up

by Phil - March 11th, 2008 11:55 pm

Whee - what a day!

That was just way too much fun but it’s still not a clear victory until we get a little follow-through so I will save my victory speech for tomorrow. As Winston Churchill once said: "Everyone has his day, and some days last longer than others." Today was certainly a day for the bulls and I predicted this afternoon that it would last through tomorrow based on the fact that the Europeans were not buying our rally in the morning and will be forced to come in and play catch-up tomorrow.

Also apropos to Mr. Churchill (a personal hero of mine) is his quote that relates so well to the hyena attacks that took this market down to ridiculous levels of late: "A lie gets halfway around the world before the truth has a chance to get its pants on. " The market has been moved by rumors for weeks and what really surprised me is how little people understand the stocks they invest in.

I said to members on Monday: "Was everybody crazy in October or is everybody crazy now?" as we have THOUSANDS of companies who have dropped 30-50% from their highs in the space of just 3 months. This has come without any significant changes in guidance based solely on assumptions that I pointed out a while ago, were NOT shared by 97% of the CEOs surveyed. As a business consultant, I look at companies from the inside, as companies, not as lottery tickets that spit out winning or losing stock bets. I’ve never seen fundamentals being given less credence than I have in this downturn where even a company like BG, who couldn’t possibly have a more positive story in a more positive sector, has been chopped down 40% in 40 days.

TlsVet pointed out this evening that SIGM has gotten ridiculously cheap and I couldn’t agree more. They have earning tomorrow, I think in the afternoon so we’re going to go with the Jan $30s at $6.40 and risk it ahead of earning. The company is down 65% from it’s January high and has a forward p/e of 10! Sales growth should be along the 200% line while earnings should be roughly triple last year’s and the company makes their money selling media processors for IP video as well as HD TV and digital media players - pretty much the only bright spot in every single manufacturer’s sales…

Posted in Uncategorized | 5 Comments »

Sprint tanks…but some call-buyers are undeterred

by Andrew Wilkinson - March 11th, 2008 11:34 am

Today’s tickers: S, USO, SDS, XLF, WM, BAC, C, VIX, HUM, CVH, WLP, AET, UNH

S – While most of the rest of the market bathed in a bullish lather today, a concoction of very bearish factors came to a froth in wireless telecom Sprint. The troubles began with an analyst downgrade that came after closer examination of Sprint’s latest 10-K filing, which concluded that the company faces a possible increase in wireless acquisition costs and handset subsidies. Add to that the company’s ongoing embroilment in a price war with other U.S. mobile carriers and a presentation tomorrow at a Bear Stearns industry event tomorrow, and you can color traders spooked. Today’s near-10% decline to $6.07 has put its shares at a 20-year low. The upshot was an immediate 25% increase in implied volatility to more than 90% - making Sprint one of the day’s top volatility gainers and showing about 30% more price risk to Sprint shares over the next month than they have shown historically. What interested us most of all however was the fact that option volume in Sprint scarcely bears the mark of “disaster preparedness” that one might expect from such a catastrophic drop in its share price. Instead, traders took the opportunity afforded by lower call-side premiums to buy calls at strikes of 6 and 7 for as little as 15 cents apiece – a cheap bet that all may not be lost for the most battered and beleaguered of the wireless carriers. Elsewhere, we saw directionally neutral but long volatility trades in play at the April 6.00 line, where the $1.05 cost of the straddle combination would protect the buyer in the event of a decline below $4.95 or back above $7.05. And it looks like one trader profited handsomely from the closeout of a put position at the May 7.00 line that was entered yesterday for 95 cents. With the value of puts swelling on back of today’s share price action, the 10,000-lot position was closed out today for $1.38 – yielding a 45% profit margin in the space of a day.

USO – After five successive sessions of record highs for crude oil, futures pulled back slightly on today’s Fed liquidity action. Still, it’s hard to imagine the end of the road for energy stocks, which is why we were so fascinated with today’s spike in put volume in the United States Oil Fund, an ETF…

Tuesday the Market Saw Fed

by Phil - March 11th, 2008 8:45 am

Woo-Eee! The Fed rides in to save the day!

The Fed has, (as predicted by me, but who listens to me anyway) has announced a coordinated effort with foreign CBs to inject $200Bn in additional liquidity into the markets in the form of increased reciprocal currency swaps and extended overnight lending rates to effectively 28-day lending rates - something they are calling "Term Securities Lending Facility." Call it what you want, it’s FREE MONEY!

I am so relieved! I got very nervous yesterday when TXN warned after hours as I went out on a very long limb at 2:30 when I said to members: "I’m taking out my callers right now (the ones I am up more than 50% on) and looking to roll down here so this will be the last time before I give up and it will cost me a lot if I’m wrong about this but I’m just not seeing a rationale to how oil can be at $108 if the economy is so awful or how can the economy be so awful if oil is at $108 (and Elliot Spitzer can afford $5,000 hookers)?"

While our Governor may be playing with hookers it’s pimp-daddy Bernanke who’s shaking his money maker for the financials (and we just bought XLF calls yesterday too!). This is so great and the Dow is up over 200 points pre-market. Is it wise? Is it just? No - but it sure is fun while it lasts.

The bad news is this will punch oil through the $110 mark but I talked about my concerns there in yesterday’s wrap-up but today is party day and we’re going to ignore the fact that our trade deficit got worse and I will take a moment to point out right now the the new and horribly disfigured Rupert Murdoch’s Journal, at 8:50 pm, with the Dow up 221 points and 20 minutes after the Fed announcement has the following headlines on their on-line front page:

Spitzer Engulfed in Scandal

New York Gov. Eliot Spitzer apologized to the public and to his family, but didn’t directly address reports that he has been involved in a prostitution ring. Spitzer has been identified as one of the ring’s clients cited in a legal complaint and officials said his involvement was caught on a federal wiretap. 8:48 a.m.

Weak Dollar Feels New Stress

Inflationary pressures around the globe are adding to pressure on the U.S. dollar as central banks from China…

Phil's Favorites

The Boredom Before the Storm (Time to Buy Volatility)

March 20th, 2010 1:08 am

John's thoughts on the relentless trend higher in stocks, with the languishing VIX.

The Boredom Before the Storm (Time to Buy Volatility)

Courtesy of John Rubino at Dollar Collapse

As eventful as the past few months have been (what with Greece, California, Illinois, Iran, the Lehman Brothers revelations, U.S./China trade friction, and record deficits just about everywhere), you’d think the financial markets would be agitated, to put it mildly. Instead, just about everything is range-bound, and the things that aren’t, like U.S. stocks, are trending slowly, reassuringly, higher. This has taken the VIX, the main measure of fear (i.e. volatility) in the options market down to levels last seen before the ...

Zero Hedge

China's Fragile Economy, Its Housing Bubble, and What It Means To Us: Download

March 20th, 2010 1:41 am

Courtesy of Econophile

As promised, here is the complete article, China's Fragile Economy, Its Housing Bubble, and What It Means To Us, in a downloadable PDF. You can download it, print it out, and read the entire piece at your leisure. The conclusions aren't encouraging, for them or us.

...

more from Tyler

Chart School

Quad Witching Expiration and a Pullback from the Long Term Trend

March 19th, 2010 12:05 pm

Quad Witching Expiration and a Pullback from the Long Term Trend

Courtesy of JESSE'S CAFÉ AMÉRICAIN

The front month on the SP futures has now switched from March to June as a part of the Quad Witching Expiration. (Technically it switched last week, but for charting purposes I made the switch last night.) The June Futures have essentially the same formations as did March, it's just that the earlier months have few trades to mark them. This is the first serious test for US equities since mid-February, as it has been on a spectacular rally streak, no doubt fueled by excess liquidity applied to a selling exhaustion in the funds. Curiously not among corporate...

Trading Goddess

Options and My Patience Expire Today

March 19th, 2010 9:29am

Well now we're officially cashed out!

As I always do before options expiration I reviewed our Buy List, which, this quarter, is a list of 37 stocks we've been playing since late December and, sadly, after reviewing 37 of our favorite investments very carefully this week - I could only conclude that cashing them out was the only decision I could be comfortable with this week. Of 66 trades we had on our 37 stocks, 64 are winners with an average return since 2/8 of 28% - since most of the trades were designed to make 40% for the year - it just seems silly not to take the money and run now, on March 19th.

You are not supposed to have 64 out of 66 winners in 6 weeks, you are not supposed to make 3/4 of what you anticipate for the year in 6 weeks - that is NOT how the markets are supposed to work! When the ma...

Oxen Group Trades

The Oxen Report: Five Keys to Fundamental Day Trading

March 19th, 2010 11:05 am

Identifying the Fundamentals

Stocks move under the influence various factors that we can use to identify stocks that are likely to move 3-5% in a single day. Even t...

The Options Report

By Andrew Wilkinson

Best Buy Option Investors Condone Broker Upgrade in Bullish Action

March 19th, 2010 4:41 pm

Today’s tickers: BBY, DNDN, GLD, BAC, AET, BA & NBR

BBY - Best Buy Co., Inc. – Shares of the world’s largest electronics retailer rallied 2% to $41.25 during the trading session after receiving an upgrade to ‘buy’ from ‘neutral’ at Goldman Sachs Group where analysts increased BBY’s target share price to $47.00 from $44.00. Options traders employed a few different bullish tactics to position for continued upward movement in the price of the underlying stock through expiration in April. Plain-vanilla call buyers targeted the April $44 strike to purchase 5,100 calls for an average premium of $0.55 apiece. These investors stand ready to accrue profits if Best Buy’s share price increases 8% from the current value to exceed the effective breakeven point on the calls at $44.55 by expirati...

Insider Zone

Insiders: March to Exit

March 15th, 2010 6:49 pm

By Ilene

Let's take a look at Insider Buying and Selling over the last week or so. These are screen shots from Finviz - the significant buys against a green background first and significant sells against the pink background second. All the buys fit into my screen shot but the sells did not. Click here to see all the sells.

Note that the largest buy in the group, for KITD was at a price of 9.73 (KITD is currently at 11.54). The buy was part of an Equity Offering rather than an open market purchase. Tuzman Kaleil Isaza's (KITD's Chairman and Chief Exec. Officer) history of buys is http://www.insidercow.com/ more from Insider

OpTrader

Swing trading portfolio - week of March 15th 2010

March 15th, 2010 8:55 am

This post is for live trades and daily comments.

To learn more about the swing trading portfolio (strategy, membership etc.), please click here

- Optrader

...

more from OpTrader

March 2010
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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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