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2024
November 6th, 2013 at 11:24 am
Oil inventories with huge product draws. Very, VERY doubtful it has anything to do with actual demand but it does give us a nice pop so, hopefully, we can get back into the shorting game when they show us a top of the new range:
AAPL/Wombat – Same thing with slightly different math. Keep in mind there's also $414,000 cash in your account ($900 x $460) and you have $900 x now $79 of Nov $440 calls ($71,100). So that's $485,100 to buy 900 shares of AAPL with and it's now $519 for $467,100 so $18,000 in profit for exactly $20 per contract – your max possible payout!
BBY/Scott – I think everyone should be dumping at this price ($44). I wish we had video of the argument we were having last year in Vegas when I was saying BUYBUYBUY at $11 and some were insisting I was nuts. This is why Cramer is so dangerous – at the top of a 300% run, he has no compunction against telling people to buy ahead of earnings. That's just stupid and reckless.
Short calls/Mill – Worry about it AFTER the others have cleared out. I mean against the long spread you have. In other words, you have (after the Jan calls expire) 30 (or whatever) $40 spreads ($140/180) that you paid $13 for. You can cash them for $13 or $10 or $16 and be done with it OR you can say "I can make a net of $2.50 a month selling 15 (1/2) short calls for $5 and that generates $30 in revenues for a 200% return PLUS whatever value is left on the long spread at the end of the year. Maybe I'll stick with that." Get it?
TZA/Rookie – Actually, the RUT just fell off the rails at 1,096 on /TF. TZA is at 20.79 and we have the $1 calls at an average of $1.50 so we need $22.50 to make money by the end of next week and that's up $1.71 from here or 8.2% and it's a 3x ETF so about a 2.5% drop in the RUT. So the question is – do we still think the RUT will drop 2.5%, to 1,072, by next Friday? Probably not so I'd be inclined to take advantage of a drop into the weekend and re-position for a Dec spread but, for now, I'd like to see how the week plays out.
TZA/Jomp – That's the way to play it. Good job.
Numbers/Wombat – How are you -$900 at $465 when you sold the $460s? That makes no sense. I did the math above, it's math, it's not going to change. You paid $12.95 for the $440 calls, they are now $80 so up $67 x 10 = $67,000. You owe $60 to one of the $460 callers so $6,000 leaves you $61,000 IN PROFITS to clean out of that set. You were assigned 900 shares of AAPL short at $460, AAPL is $520 so $60 x 900 = a $54,000 loss on AAPL. $61,000 – $54,000 = $7,000 so it is not possible that you can have less than $7,000 in profit on this trade ($7 per contract). It's not a theory, it's math!
AAPL/Jomp – Why now?
TSLA/Albo – Oh yah, margin calls would be nice. Bagholders who bought at $195 must be really in shock at the moment.
3D/Pharm – I agree, it's a resolution issue, for one thing. It's like expecting a laserjet printer to produce a hologram – you just can't get there from here – not in the next decade anyway.
Wedbush/Rustle – Man did those guys screw the people who listened to them.
Oil hitting $94.80! Maybe $95 again.