Archive for the ‘IRA Strategies’ Category

An update on oil proxies

Courtesy of Jean-Luc Saillard

Back in December, I wrote a post on my blog where I compared the performances of various ETFs related to the oil industry. I was looking for the best possible proxy to match the moves of oil prices if you didn't want to play with futures. At the time, I concluded that for medium term trades, USO and the leveraged ETFs UCO and SCO were the most promising. Longer term, broader ETFs like OIH and XLE might make better investment if oil prices do recover to more profitable prices since ETF linked to futures like USO, UCO and SCO do suffer from decay. It also seemed that DIG and DUG could be promising if OIH could recover as it should with the price of oil, but that they don't make a good proxy for the price of oil itself. 

Since then, oil has hit a multi-year low at around $42.50 and is now approaching $60, still well below its highs of 2014 but probably closer to a breakeven price for American shale producers. In this post I want to see what ETF would have profited best from that rebound and also which one would have fared worse. Let's look at a couple of performance charts. First, the standard oil proxies based on the futures:

Oil (red) is up 40% since March 17 but what is interesting is how the pure oil ETFs are tracking that move. USO (blue) which is not leveraged is not tracking very well. In fact, it's up only about 27% or about 2/3 of the oil move. As expected, SCO (pink) is down, but clearly, the leveraging is not the 2x that you would expect as it's only down a bit less than 40%. And UCO (green), while the clear winner here, is only up 57% which is lower than the advertised 2x leverage factor. Once again, these future based ETF are victims of some decay.

Let's look at some ETFs not based on oil futures but who should benefit from an oil price rebound. In the next performance chart, we'll look at OIH and XLE. 

It's not surprising that there should be a lag between the time oil prices start…
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IRA Portfolio update #4

Welcome to the fouth update of the IRA Virtual Portfolio.  First I am going to summarize the current state of the Portfolio then I will get into all the activity we had during September expiration.  

Profit and Loss – Net of closed positions the portfolio is up a total of $769

Market Commentary – Last expiration I said, "I would like to put a total of $20,000 to work by the end of SEP expiration. If the VIX pops up to around 20 I plan to put about $50,000 total to work." The market didn't quite reach the goal but I did manage to deploy $15,000 of buying power. I still feel the market is too high and expect a correction during October. If the vix pops up to around 20 I still plan to put about $50,000 to work. If a correction doesn't happen I still plan to have a total of $25,000 in buying power put to work by October expiration.  Now on to the activity.

AEM – Agnico Eagle Mines Limited;

  • On 9/10/2013 I sold 1x OCT 27.5 PUT for a credit of $150 to initiate a position.(member chat link)

BTU – Peabody Energy Corporation;

  • The SEP 19 CALL I sold expired worthless.

VLO – Valero Energy Corporation;

  • On 9/20/2013 I rolled the SEP 35 PUT to the OCT 34 PUT for a credit of $44.(member chat link)

FCX – Freeport-McMoRan Copper & Gold Inc;

  • On 9/10/2013 I bought back the SEP 29 PUT for a debit of $5.(member chat link)

X – United States Steel Corp;

  • On 9/10/2013 I bought back the 2x SEP 17 PUT for a debit of $10 total ($5 for each PUT).(member chat link)

Here is a link to the spreadsheet we use to track the portfolio. LINK





IRA Portfolio update #3


Welcome to the third update of the IRA Portfolio. First, I am going to summarize the current state of the IRA Portfolio then I will get into all the activity we had during August expiration. In addition, I want to amend something I said when this portfolio began. I said we expect close to 20% annual returns. However, our returns are greatly dependent on the VIX. The higher the VIX the more our cost basis can be reduced on order entry. Unfortunately the VIX has been hovering around 14 which is historically low. So I am not going to make any predictions about the returns of this portfolio. Lets just do the best we can and see where we are after a year.

Profit and Loss – Net of closed positions we are up a grand total of $384.

Market Commentary – I still feel that the market is much to high and volatility much to low to commit a large portion of the portfolio. However, I do feel that our current exposure of about $5600 is way to low for a 100k portfolio. To remedy that I am going to be looking for places to put some additional money to work. I would like to put a total of $20,000 to work by the end of SEP expiration.  If the VIX pops up to around 20 I plan to put about $50,000 total to work.

ABX – Barrick Gold Corporation

  • On 8/9/2013 we closed out the AUG 16/11 PUT spread we sold. We closed it for a debit of $8.(member chat link)

AAPL – Apple Inc

  • On 8/2/2013 we closed out the AUG 420/370 PUT spread we sold. We closed it for a debit of $5.(member chat link)

BTU – Peabody Energy Corporation

  • On 6/9/2013 we closed out the AUG 16/11 PUT spread we sold. We closed it for a debit of $3.(member chat link)

FCX – Freeport-McMoRan Copper & Gold Inc

  • On 8/6/2013 we decided to add some FCX to the portfolio by selling the SEP 29/24 PUT spread for a credit of $88.(member chat link)

VLO – Valero Energy Corporation
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IRA Portfolio update #2


Welcome to the second update of the IRA Portfolio. First, I am going to summarize the current state of the IRA Portfolio then I will get into the specifics of the specifics of all the activity we had since the last article.

Net of closed positions we are up a grand total of $11. However, our open positions in AAPL, CLF, ABX, and SLW are all profitable and waiting to be closed. Below is the summary of our activity for the last month.

ABX – Barrick Gold Corporation

  • No new trades since the last article.  With ABX trading at 17.82 the AUG 16/11 Put Spread we sold is looking safe.

AAPL – Apple Inc

  • On 7/19 we rolled the JUL 430/380 Put Spread to the AUG 420/370 Put Spread for a credit of $72. (member chat link)

BTU – Peabody Energy Corporation

  • On 7/19 BTU was trading at $16.45 so we had to adjust the 20/15 Put Spread we sold. So, we bought back the short 20 put for a debit of $355 and bought 100 shares of BTU for a debit of $1670. Next we sold 1x SEP 19 CALL for a credit of $38 and sold 1x AUG 16/11 PUT Spread for a credit of $66. This leaves us with 100 shares of BTU at a cost basis of $18.09 per share. (member chat link)

CLF – Cliffs Natural Resources Inc

  • On 7/19 CLF was trading at $17.71 so we had to adjust the 20/15 Put Spread we sold. So, we bought back the short 20 put for a debit of $232 and bought 100 shares of CLF for a debit of $1771. Next we sold the AUG 17/12 PUT Spread for a credit of $85 and sold the AUG $19 CALL for a credit of $60. This leaves us with 100 shares of CLF at a cost basis of $17.58

X – United States Steel Corporation

  • The JUL 17/12 Put Spread we sold expired worthless.

SLW – Silver Wheaton Corporation

  • The AUG 19/14 Put Spread we sold is almost worthless so we will look to close it early next week.

Below is the state of the IRA Portfolio as of 7/28/2013.





IRA Portfolio update #1

Reminder: Craigzooka is available to chat with Members regarding his virtual portfolio performance, comments are found below each post.

Welcome to the first update on the IRA Portfolio. The plan, from here on out, is to do a recap of the portfolio every options expiration. In this recap we will do a review of all the activity in the portfolio for the last month and talk about our plans for the next expiration. We had a decent amount of activity over the last month, so lets get to it!

ABX – Barrick Gold Corporation

  • On 5/21/2013 in, member chat, we said, "ABX has gotten to cheap and the premiums to juicy to ignore any longer. So our first position in the NEW IRA portfolio will be ABX. We are scaling into a $10,000 position so for the first round we will sell a put spread and hope we have a chance to buy the shares even cheaper. The 19-14 put spread in JUN is trading for $.80 and the 19-14 in JUL is trading for $1.09. I don't think the extra $.29 is worth missing the opportunity to potentially sell JUN for $.80 and then JUL for another $.80. So our first trade will be selling 1x the 19-14 put spread in JUN for a $80 credit."
  • Our first trade went spectacularly and on 6/6/2013 the short 19 PUT was trading at $13. There was no reason to be greedy and risk the $67 profit to make $13 more so we bought back our short 19 PUT for $13 and booked our first winner ( member chat link ).
  • When we first initiated the trade we were ready and willing to buy more if it got cheaper. By 6/21/2013 ABX had gotten way cheaper so we initiated another position. We sold the 16/11 PUT Spread for a credit of $101. ( member chat link )

HPQ – Hewlett-Packard Company

  • On 5/21/2013, in member chat, we said, "Adding an opening position in HPQ as well. Selling the 21-16 Put spread in JUN for a credit of $104. Once again, we really hope they crash and we will get to pick them up cheaper, but we might as well sell some premium while we wait for that to happen."
  • Two days later HPQ popped after earnings and we were able to close


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The IRA portfolio

Reminder: Craigzooka is available to chat with Members regarding his virtual portfolio performance, comments are found below each post.

By Craigzooka

I am going to share with you how I manage my IRA and the power of reducing your cost basis.  My goal each year is a 20% return in my IRA.  Sometimes I make it and sometimes I don't, but I believe that all of my success is due to reducing my cost basis.  To illustrate the power of reducing your cost basis here are some trades we did last year.  These trades are taken from an educational portfolio we ran in a paper-trading account for a little more than a year.

  • We bought RIG on 5/15/2012 for $44.13, sold it on 1/18/2013 for $46 but booked a profit of $1,154.
  • We bought MT on 1/4/2012 for $19.24, sold it on 12/21/2012 for $15 but booked a profit of $454.
  • We bought CHK on 1/27/2012 for $21.93, sold it on 10/19/2012 for $18 but booked a profit of $800.50.

We were able to lower our cost basis so much by selling calls and occasionally buying additional stock to lower the basis.  We did this mechanically without thinking about market conditions.  I think we can do better.  For the foreseeable future I am going to paper trade a 100k portfolio using IRA margin rules and track it using a TOS paper trading account.  I am going to detail the strategy below.

Position Sizing 

We don't want one single position to take down the whole portfolio so we are going to risk a maximum of 10k to each stock.  Unless there is a once in a lifetime opportunity, we will not spend more than 10k of cash on any one stock.

Position Entry

We hope to eventually own stock but while we wait lets have someone pay us not to own it.  We will enter positions by selling a put spread.  Should we be put the stock we want it to take up less than 5k of cash, so don't sell too many put spreads to begin with!

Managing Put Spreads

So a put spread we sold is now in the money.  Fantastic!  We wanted to buy the stock cheaper and now they are giving us a chance.  So let them put us the shares and we will begin selling calls…
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Virtual Portfolios Update – 11/18/2012

FAS Money

$25KPA

$25KPM

AAPL Money

Peter's Strangle Portfolio

Income Portfolio





Virtual Portfolios Update – 11/9/2012

 

In order to centralize weekend comments regarding the virtual portfolios, we thought that it would make more sense to write a post outlining the current positions. The portfolios spreadsheet is currently up to date and can be viewed here

Income Portfolio

 
Some stocks in the news this week:
 
RIG - Upgraded to Buy at Argus and The Street Rating.
CSCO - Reports earnings on 11/13.
HPQ - Hit a new 52-week low on Friday.
JRCC - Victim of the election!
SBUX - Upgraded to Buy at Argus
BBY - Buyout offer expected from Richard Schulze. Rumored to be below $24.00. Our net is $18.84.
SHLD - Reports earnings on 11/15.
CLF - Reached an agreement with labor union.
CMG - Reiterated as Buy at The Street Rating.

FAS Money

25KPM

25KPA (High Margin Portfolio)

MoMo Portfolio (managed by lflan)

AAPL Money (High Margin Portfolio)

Strangle Portfolio (Managed by Peter – High Margin Portfolio)





Weekend Virtual Portfolio Update 2/26/2012

My last weekend update is dated from January 30 so after a long hiatus, here is an update of our virtual portfolio. Since the last update, we have closed the AA Money portfolio due to a lack of enthusiasm (and activity) and I have stopped tracking the FAS strangle as the low VIX makes it hard to get rewarded for the risk! But we have added a small $5KP virtual portfolio which does not use any margin.

FAS Money

We have had to recover from a big move up by FAS and a low VIX which keeps option prices low. But the portfolio has gaine about 10% since the last update.

Last update P&L – $5499.00

IWM Money

Not a lot of activity in this portfolio where the main focus is on the large IWM BCS. But the portfolio has grown over 20% since the last update.

Last update P&L – $1998.00

$5KP Portfolio

This is the virtual portfolio that replaced the AA Money portfolio. It does not use margin and we will keep holdings under $5K.

AAPL $50K Portfolio

What is there to say about this portfolio…. $132K of profit in a bit less than 3 months. Unbelievable and great job by lflan!

Last update P&L – $53,205.00

$25KP Portfolio

Comments about this portfolio can be found in Phil’s daily post. I have included only February trades as the list of trade is getting too long to fit in the article.

Last update P&L – (-$5447.00)





Weekend Virtual Portfolio Update 1/30/2012

Here is a quick update of past trades and our current position.

AA Money

No trade this week as we wait for AA to settle. Phil remarked last week that AA seemed overvalued. In the meantime, it looks like we might have to roll our Feb 9 calls. Good thing we sold only 5 of them against our position.

Last week P&L – 310.00

We lost ground last week, but we still have 11 months to sell premium!

FAS Money

Very good week for FAS Money as we benefited from the large amount of premium sold the previous week. We covered most of the shorts in advance of the Fed speech, but sold another set of options on Wednesday after the speech - 2 FAS calls that expired worthless on Friday, 2 FAS put that we are still holding and 2 FAZ put that we bought back for a profit on Friday. A late stick comparable to last week’s almost gave us problems at the end of the day though!

Last week P&L – $4277.00

IWM Money

A decent week in this virtual portfolio. As with FAS Money, we covered most of our short positions before the Fed speech, the difference being that we were more bearish in this portfolio and the early run last week damaged the position. We sold more options after the speech as well – TZA and TNA puts and TNA calls. We showed some small profits on the TNA options but had to roll the TZA puts and the TNA calls at the end of Friday to counter the late stick.

Last week P&L – $1682.00

FAS Strangle Experiment

A decent week even though we stayed away after Wednesday… We benefited from the set of calls sold last Friday when we rolled our position due to a late stick. The market sold off early Monday and we were able to get out with a nice profit. We sold another profitable strangle on Tuesday and that was the extent of our trades last week!

Last week P&L – $10,350.00

Still, we are now up to 50% of PM margin. Not bad in 10 weeks…

AAPL 50K Portfolio

Well AAPL didn’t disappoint in earnings and the portfolio took off… Great job by lflan!

Last week P&L – $33,385.00

$25KP Portfolio

As usual, I’ll let Phil comment this week.





 
 
 

Zero Hedge

Why The Great Petrodollar Unwind Could Be $2.5 Trillion Larger Than Anyone Thinks

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Last weekend, we explained why it really all comes down to the death of the petrodollar. 

China’s transition to a new currency regime was supposed to represent a move towards a greater role for the market in determining the exchange rate for the yuan. That’s not exactly what happened. As BNP’s Mole Hau hilariously described it last week, "whereas the daily fix was previously used to fix the spot rate, the PBoC now seemingly fixes the spot rate to determine the daily fix, [thus] the role of the market in determining the exchange rate has, if anything, be...



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Phil's Favorites

Dumb Money Redux

 

Dumb Money Redux

Courtesy of Joshua Brown

Cartoon by XKCD

Responses are pouring in from my post Computers are the new Dumb Money. A few of the quants I know told me the link was hitting their inboxes all day from friends and colleagues around the industry. A few desk traders I talk to had some anecdotes backing my assumptions up. One guy, a “data scientist”, was furiously angry, meaning he probably blew himself up this week or has some other deep-rooted insecurity about what he’s trying to do and needed to vent.

If you haven&...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

After all that, the stock market finished the week higher (Business Insider)

The stock market had a wild ride this week. And it ultimately ended up even better than it started. 

This week we saw a 1,000 point drop in the Dow in minutes, another drop of around 600 points in an hour of trading, and another day that saw one of the largest single-day point gains for the Dow in history.

Worried about your investments? Here’s the best advice (Market Watch)

The market is on a ...



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Chart School

Gann Angles advise which stocks should be in your portfolio

Courtesy of Read the Ticker.

Gann Angles are great for stock selection, the momentum trader, and judging corrections.

Here is a winning stock, Gann Angle 4x1 is holding the trend of PriceLine. Amazing trend!

Other stocks in this 7 year bull market like AAPL and SBUX have had great Gann angle supporting trends.

Click for popup. Clear your browser cache if image is not showing.



NOTE: readtheticker.com does allow users to load objects and text on charts, however some annotations are by a free third party image tool named Paint.net

Investing Quote...

...“Stocks create their own field of action and power; power to attract and repel,which principle explains why certain stocks at times lead the market...



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All About Trends

Mid-Day Update

Reminder: David is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Kimble Charting Solutions

Dangerous Place for a kiss of resistance, says Joe

Courtesy of Chris Kimble.

Anyone noticed its been a wild week? Has anything been proven with all the volatility the past 5-days?

What happens at (1) below, could tell us a good deal about what type of damage did or didn’t take place this week!

CLICK ON CHART TO ENLARGE

The large decline on Monday cause the S&P 500 to break support of this rising channel.

The mid-week rally pushed the S&P higher and as of this morning it is kissing the underside of old support as resistance now, near the 50% retracement level of the large decline over the past few weeks.

Why could th...



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Sabrient

Sector Detector: Finally, market capitulation gives bulls a real test of conviction, plus perhaps a buying opportunity

Reminder: Sabrient is available to chat with Members, comments are found below each post.

Courtesy of Sabrient Systems and Gradient Analytics

The dark veil around China is creating a little too much uncertainty for investors, with the usual fear mongers piling on and sending the vast buy-the-dip crowd running for the sidelines until the smoke clears. Furthermore, Sabrient’s fundamentals-based SectorCast rankings have been flashing near-term defensive signals. The end result is a long overdue capitulation event that has left no market segment unscathed in its mass carnage. The historically long technical consolidation finally came to the point of having to break one way or the other, and it decided to break hard to the downside, actually testing the lows from last ...



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OpTrader

Swing trading portfolio - week of August 24th, 2015

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

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



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ValueWalk

Some Hedge Funds "Hedged" During Stock Market Sell Off, Others Not As Risk Focused

By Mark Melin. Originally published at ValueWalk.

With the VIX index jumping 120 percent on a weekly basis, the most in its history, and with the index measuring volatility or "fear" up near 47 percent on the day, one might think professional investors might be concerned. While the sell off did surprise some, certain hedge fund managers have started to dip their toes in the water to buy stocks they have on their accumulation list, while other algorithmic strategies are actually prospering in this volatile but generally consistently trending market.

Stock market sell off surprises some while others were prepared and are hedged prospering

While so...



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Digital Currencies

Bitcoin Battered After "Governance Coup"

Courtesy of ZeroHedge. View original post here.

Naysyers are warning that the recent plunge in Bitcoin prices - from almost $318 at its peak during the Greek crisis, to $221 yesterday - is due to growing power struggle over the future of the cryptocurrency that is dividing its lead developers. On Saturday, a rival version of the current software was released by two bitcoin big guns. As Reuters reports, Bitcoin XT would increase the block size to 8 megabytes enabling more transactions to be processed every second. Those who oppose Bitcoin XT say the bigger block size jeopardizes the vision of a decentralized payments system that bitcoin is built on with some believing ...



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Pharmboy

Baxter's Spinoff

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

Baxter Int. (BAX) is splitting off its BioSciences division into a new company called Baxalta. Shares of Baxalta will be given as a tax-free dividend, in the ratio of one to one, to BAX holders on record on June 17, 2015. That means, if you want to receive the Baxalta dividend, you need to buy the stock this week (on or before June 12).

The Baxalta Spinoff

By Ilene with Trevor of Lowenthal Capital Partners and Paul Price

In its recent filing with the SEC, Baxter provides:

“This information statement is being ...



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Mapping The Market

An update on oil proxies

Courtesy of Jean-Luc Saillard

Back in December, I wrote a post on my blog where I compared the performances of various ETFs related to the oil industry. I was looking for the best possible proxy to match the moves of oil prices if you didn't want to play with futures. At the time, I concluded that for medium term trades, USO and the leveraged ETFs UCO and SCO were the most promising. Longer term, broader ETFs like OIH and XLE might make better investment if oil prices do recover to more profitable prices since ETF linked to futures like USO, UCO and SCO do suffer from decay. It also seemed that DIG and DUG could be promising if OIH could recover as it should with the price of oil, but that they don't make a good proxy for the price of oil itself. 

Since...



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Promotions

Watch the Phil Davis Special on Money Talk on BNN TV!

Kim Parlee interviews Phil on Money Talk. Be sure to watch the replays if you missed the show live on Wednesday night (it was recorded on Monday). As usual, Phil provides an excellent program packed with macro analysis, important lessons and trading ideas. ~ Ilene

 

The replay is now available on BNN's website. For the three part series, click on the links below. 

Part 1 is here (discussing the macro outlook for the markets) Part 2 is here. (discussing our main trading strategies) Part 3 is here. (reviewing our pick of th...

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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




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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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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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