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Comment by phil

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  1. phil

    AAPL/JMD – Well, there's not much point to short 2016 $78.57 puts (now $1.70), it's not worth tying up margin on those when you could sell the 2017 $80 puts for $5.  You could sell 1/3 as many for the same upside or sell the same amount and make $2.50 in a year (assuming normal decay) vs $1.70.  Same goes for the other short puts – you COULD roll them or at least put stops on the ones you have so, if AAPL drops, you can flip to better puts in 2017 at some point (assuming you intend to be a long-term holder).  

    As to the calls, it looks like you have 125 longs at about $90ish vs 105 shorts at $105 and then 85 more 2017 $90/120 spreads.  As I've said to others, you have a very large amount of AAPL positions so I certainly hope this is, in the very least, a $5M portfolio and you can afford to take these risks – otherwise, you should be looking to lighten up after a good run.

    The 2016 $90(ish) calls are you big problem, they are $29.50 with AAPL at $116.50 so $3 in premium means they lose 1:1 for any drop in AAPL yet, since you sold $105 calls, they also only have $15 of upside.  Obviously, you have 20 extra and they can be rolled to 30 of the 2017 $90/120 spreads to give you $45,000 more upside – so that's easy.  

    As to the rest, the short 2016 $115s are $13.75 so the net (averageish) of the remaining spreads is $15.75 and you make another $9.25 if AAPL holds $115, so you either believe that or you don't and, if you don't – again the case for lightening up.  Since the 2017 $90s are only $33, it's ridiculous to keep your money in the 2016 $90(ish) calls but, since you sold $115s, what I would do is, as follows (again, assuming you want to remain very bullish on AAPL):

    I'd do that roll of the naked longs to more 2017 $90/120s and then you have 115 of them and also you have 70 remaining short puts (because you cashed the silly 51) at about $5 so I'd keep a stop on those


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Official Moves in the Market Shadows’ Virtual Portfolio

By Ilene 

Screen Shot 2014-11-20 at 12.37.21 PMI officially bought 250 shares of EZCH at $18.76 and sold 300 shares of IGT at $17.09 in Market Shadows' Virtual Portfolio yesterday (Fri. 11-21).

Click here for Thursday's post where I was thinking about buying EZCH. After further reading, I decided to add it to the virtual portfolio and to sell IGT and several other stocks, which we'll be saying goodbye to next week.

Notes

1. the most timely way to read our selection of informative, educational and thought-provoking articles and comments is by visiting me here - the Phil's Favorites section of PSW. 

2. The fastest way to get alerts for the Market Shadow's Virtual Portfolio buys and sells is to subscribe to the alerts by entering your email at the top of a Market Shadows' webpage

[Picture from EZCH's website.]

 





Why the Economy Isn’t Slowing and Why That’s Bearish

Why The Economy Isn’t Slowing and Why That’s Bearish (Video)

Courtesy of Lee Adler of the Wall Street Examiner

Housing may be slowing, but the broader economy isn’t. And that’s bearish in the big picture.

 

This video was originally published for Radio Free Wall Street subscribers on September 23, 2014. To see the latest videos in real time, subscribe here

Get regular updates on the machinations of the Fed, Treasury, Primary Dealers and foreign central banks in the US market, in the Fed Report in the Professional Edition, Money Liquidity, and Real Estate Package. Click this link to try WSE's Professional Edition risk free for 30 days!

 





Thanksgiving Top Trades Review – Using Options to Reduce Risk and Increase Profits

Happy Thanksgiving (almost)!  

We added a new feature last month called Top Trades™ (Members Only) so I thought it would be a good time to see how we're doing as well as give a few tricks and tips to our new subscribers.  Top Trade Alerts are sent out once or twice a week via EMail and Text Message from our Basic and Premium Live Member's Chat Room.  These trades are just a very small portion of what we discuss during chat each day, but hopefully a good representative sample.  Let's see how they performed so far:

We already reviewed our first Top Trade Alert™ in Thursday's post and our first 7 ideas are already up a combined 3.7% for the month but, officially, GSK was the actual Top Trade that day, and it's already up 6.1% for the month – a great way to get started!  Also on Thursday, we checked out out 2nd Top Trade Idea for CAT and, with Friday's 4.27% gain, the stock is already up 9% in a month but, of course, we don't just play boring old stocks at Philstockworld – our option trade Idea was:

As a new trade on CAT, I'd sell the 2017 $80 puts for $7.30 for a very nice $72.70 net entry.  That's more than the $5.60 dividend you'd make owning the stock for 2 years and a 26% discount if put to you.  That's great as a stand-alone play or it can be paired with the $100/115 bull call spread at $5.50 and you still have a net $1.80 credit (so net $78.20 entry – 20% off) but 100% of the upside over $100 for the next two years.  

As of yesterday's close, the $80 puts were $5.70 (up 21.9%) and the bull call spread is now $7.35 for net $1.65 plus the original $1.80 credit is $3.45, up 191% in a month on the option play.  Isn't that more fun than just making 9% on the stock?  

This is what we teach our Members at Philstockworld.  Rather than
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Nick Colas: Ten Signs You’ve Been on Wall Street Too Long

Uh oh, I was just in the car the other day explaining the three points about why one of the only worthwhile country songs, The Gambler, actually applies to everything in life from 1) the stock market (obviously) to 2) relationships to 3) career moves. My favorite observations from Cola's 10 signs are in bold. 

Nick Colas: Ten Signs You’ve Been on Wall Street Too Long

Courtesy of 

Nicholas Colas pens an opus this morning, out of nowhere. He’s clearly feeling introspective today…

***

After 30 years in and around Wall Street, I feel like damaged goods.  That’s not necessarily a complaint, but rather a simple and factual observation.  An example to illustrate the problem: I have mental stop losses for just about everything in my life.  If I have a bad meal at a restaurant, I never go back.  If a personal relationship goes south, I “Take it off my screen”.  Very few things have a second chance with me.  If it doesn’t work out, well, one and done…

Consider this “Top 10” list of other examples

#1 – You start personal conversations with “I have three points to make today.”  Aside from business consultants, most people do not think in PowerPoint or outline form.  But after a decade or so in finance, you somehow decide that anything worth saying must have three supporting points.  For stock analysts it always comes back to “Industry dynamics, company strategy/financials, and valuation.”  For traders, it is “Market direction, sector moves, and company trading dynamics”.  Three things, always…  No one else thinks or talks this way, as my wife often quietly – but firmly – reminds me. 

#2 – Emotions are life’s “beta”.  The concept that a stock moves with either more or less volatility than the market seems a neat analog for life.  Sometimes you are the windshield, sometimes you’re the bug.  We’ve all had beta 3 days, both for good or for bad.  But no one except a finance person would try to quantify that with a number.  “How was your day, honey?”  Answer: “Oh, a gap up open when I got a new customer to trade with me, but


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Free Money Friday – Draghi and the PBOC add Fuel to the Fire

MORE FREE MONEY!!!

Europe is up 2% with no signs of slowing at lunch as Mario Draghi kicks it up a notch, saying the ECB is ready to "step up the pressure" and expand its asset-purchase programs if inflation fails to show signs of quickly returning to the ECB’s target.  BAM!!!

“We will continue to meet our responsibility—we will do what we must to raise inflation and inflation expectations as fast as possible, as our price stability mandate requires of us.  If on its current trajectory our policy is not effective enough to achieve this, or further risks to the inflation outlook materialize, we would step up the pressure and broaden even more the channels through which we intervene, by altering accordingly the size, pace and composition of our purchases,” 

That was enough to send the Euro plunging 1% ($1.24) as the Dollar jumped over the 88 line for the first time since 2010, when the Global Economy was collapsing and we looked like the only game in town.  Well, China wasn't going to take that lying down so, of course, the PBOC, in the middle of the night on Friday in China, suddenly decided to cut their own rates by 0.4 to 5.6% and they lowered their deposit rate by 0.25, to 2.75% effective tomorrow.  

“All the targeted easing measures or the mini stimulus measures to cut the cost of financing are in fact ineffective,” said Chang Jian, chief China economist at Barclays Plc in Hong Kong, who correctly forecast one interest rate cut in the fourth quarter of this year. “So the only way to really reduce the cost of financing is through cutting the benchmark rate.”

Today’s move suggests a shift toward pro-growth policies that may fuel even more debt. An unprecedented lending spree from 2009 to 2013 led to a surge in debt on a scale that’s triggered banking crises in other economies, according to the International Monetary Fund.  China’s total
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Comment by phil

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  1. phil

    Good morning! 

    If you think we're manipulated, check out Japan into their close:

    That's got our Futures, and Europe's futures up about 0.25% as Abe dissolves Parliament to call for elections with the presumption that he will be able to stack the deck with even MORE DOVEISH yes-men than he already has.  If, on the other hand, the people reject Draghi and strengthen his opposition, we'll see the rug pulled out from the Japanese economy. /NKD bottomed out at 17,130, back to 17,350 now.  

    And, of course, the big news was:


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Jobless Claims Below 300,000 for Tenth Straight Week

Jobless Claims Below 300,000 for Tenth Straight Week

Courteys of 

Reuters:

The number of Americans filing new claims for unemployment benefits fell less than expected last week, but continued to point to strengthening labor market conditions.

Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 291,000 for the week ended Nov. 15, the Labor Department said on Thursday.

The labor market continues to tighten up. Last week’s JOLTs report told us that there is a commensurate increase in worker confidence, as quit rates and switches pick up as well. Wage growth has not arrived yet as the better employment conditions are pulling more people who were on the sidelines back into the labor pool. Once that process has finished playing out, average incomes will improve.

Now add in the elixir of plummeting gasoline and heating prices – a massive tax cut for half the country, which lives check to check and spends a fifth of their income on energy costs.

My guess is that the strength in holiday sales shock everyone. When people are more confident in their employment situation, they spend more money. That’s the real wealth effect in America – the one a rising stock market simply cannot produce.

Momentum is building. It’s slow now, but persistent and becoming more evident to more people with each passing day.





A Global Explosion in Ultra High Net Worth Individuals

A Global Explosion in Ultra High Net Worth Individuals

Courtesy of 

UBS and Wealth-X are out with a massive, 53-page report on the state of the global ultra high net worth (UHNW) population in 2014.

The broad strokes of what’s gone on can be observed in the below table:

Screen Shot 2014-11-20 at 3.03.57 PM

What should jump out at you:

* While the total population of UHNW people grew by 6%, their combined wealth grew by 7% from 2013 to 2014. The rich got richer, faster.

* The richer you were, the faster pace your wealth grew, for the most part. You can see that the top three tiers of UHNWs saw a double-digit rate in asset growth versus half that rate for everyone else.

* The real explosion took place in the near-billionaire category of $750 to $999 million. Their ranks grew by 19.9% this year and their wealth grew by over 15%. That’s tremendous.

* The largest two groups of people are individuals with somewhere between $30 million and $99 million in wealth. Combined, these tiers add up to over 150,000 “aspirational” UHNWs globally. They haven’t seen the same lift as those at the top, but I’m sure they’re doing fine.

I’ll have more insights from this report later…

Source:

WORLD ULTRA WEALTH REPORT 2014 (Wealth-X)

 





Comment by DMulligan

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  1. DMulligan

    GMCR down .. yippee :)







 
 
 

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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Zero Hedge

Fear Of "Surge In Debt Defaults, Business Failures And Job Losses" Means Many More Chinese Rate Cuts

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

If admitting you have a problem is the first step toward recovery, then China is making progress. The question is progress to what, because the generic answer, "another debt-fueled boom" is no longer applicable. Recall that as we noted here initially in the summer of 2013, the very reason why China finds itself in a reformist quandary is that the traditional method of Chinese "growth" - issuing a little under $4 trillion in aggregate system debt per year - no longer works as the bad debt portion of the Ponzi scheme is rising at a faster...



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Chart School

World Markets Weekend Update: The Rally Continues

Courtesy of Doug Short.

The world market rally continued last week with six of the eight indexes on my watch list posting gains. Europe led the pack, with Germany's DAX up 5.18%, France's CAC 40 up 3.44% and the UK up 1.45%. Hong Kong's Hang Seng was the big loser with its -2.70% loss. The other negative performer was Japan's Nikkei 225. It's fractional -0.76% decline snapped not only a four-week string of gains, but also four weeks as the top performer.

China's Shanghai Composite remains the only index on the watch list in bear territory -- the traditional designation for a 20% decline from an interim high. The index is down 28.36% from its August 2009 peak. See the table inset (lower right) in the chart below.

He...



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Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.

Here's the Happy Thanksgiving Edition of Stock World Weekly!

Click on this link and sign in with your PSW user name and password. 

Picture via Pixabay.

...

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Phil's Favorites

"Eagle Cam": Aerial View of London via Video Camera Attached to an Eagle

Courtesy of Mish.

An eagle got an impressive birds-eye-view of London this week, flying over the city's most iconic landmarks using a Sony HDR-AZ1VR Action Cam attached to its back.



Link if video does not play: Action Cam Footage Shows Eagle Flying Over City of London

The BBC reports Eagle With Camera Flies Over London
An eagle with a camera attached has flown across London and offered a new perspective on some of the capital's best-known landmarks.

The footage was recorded over a week by an Imperial Eagle called Darchan.

The animal has been brought to London from the French Alps by The Freedom Project to mark the 50th anniversary of the International Union for Conservation of ...



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Market Shadows

Official Moves in the Market Shadows' Virtual Portfolio

By Ilene 

I officially bought 250 shares of EZCH at $18.76 and sold 300 shares of IGT at $17.09 in Market Shadows' Virtual Portfolio yesterday (Fri. 11-21).

Click here for Thursday's post where I was thinking about buying EZCH. After further reading, I decided to add it to the virtual portfolio and to sell IGT and several other stocks, which we'll be saying goodbye to next week.

Notes

1. th...



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OpTrader

Swing trading portfolio - week of November 17th, 2014

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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Sabrient

Sector Detector: Investors make up new rules for their new market paradigm

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

Courtesy of Sabrient Systems and Gradient Analytics

By Scott Martindale

Investors in U.S. equities seem to have embraced a new market paradigm in which upside spikes come more swiftly than the downside selloffs. Remember when it used to be the other way around? When fear was stronger than greed? The market is consolidating its gains off the early-October V-bottom reversal, and no one seems to be in any hurry to unload shares this time around, with the holidays rapidly approaching and all. After all, there are bright blue skies directly overhead giving hope and respite from the early freeze blanketing the country.

In this weekly update, I give my view of the current market environment, offer...



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Digital Currencies

Ukraine Central Bank Bans Bitcoin "To Protect Citizens" From Financing Terrorism

If you would have supposed that Ukraine had enough problems to make banning bitcoins a backburner issue, you'd have been wrong. The rationale, "to protect consumers' rights" makes little to no sense... The other one, "to keep money in the country" makes more sense. 

Ukraine Central Bank Bans Bitcoin "To Protect Citizens" From Financing Terrorism

Courtesy of ZeroHedge. View original post here.

The Hryvnia has collapsed to new record lows near 15/USD this morning. The Central Bank and bankers "agreed to keep UAH at 15-16/USD" but are &qu...



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Option Review

Yamana Gold call options sink

Yamana Gold call options sink

By Andrew Wilkinson at Interactive Brokers

A four-year low for the spot price of gold has had a devastating impact on Yamana Gold (Ticker: AUY), with shares in the name down at the lowest price in six years. Some option traders were especially keen to sell premium and appear to see few signs of a lasting rebound within the next five months. The price of gold suffered again Wednesday as the dollar strengthened and stock prices advanced. The post price of gold fell to $1145 adding further pain to share prices of gold miners. Shares in Yamana Gold tumbled to $3.62 and the lowest price since 2008 as call option sellers used the April expiration contract to write premium at the $5.00 strike. That strike is now 38% above the price of the stock. Premium writers took in around 16-cents per contract o...



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Pharmboy

Biotechs & Bubbles

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

Well PSW Subscribers....I am still here, barely.  From my last post a few months ago to now, nothing has changed much, but there are a few bargins out there that as investors, should be put on the watch list (again) and if so desired....buy a small amount.

First, the media is on a tear against biotechs/pharma, ripping companies for their drug prices.  Gilead's HepC drug, Sovaldi, is priced at $84K for the 12-week treatment.  Pundits were screaming bloody murder that it was a total rip off, but when one investigates the other drugs out there, and the consequences of not taking Sovaldi vs. another drug combinations, then things become clearer.  For instance, Olysio (JNJ) is about $66,000 for a 12-week treatment, but is approved for fewer types of patients AND...



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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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