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Posts Tagged ‘AGNC’

Limited Brands Calls Look For Near-Term Rally

www.interactivebrokers.com

 

Today’s tickers: LTD, AGNC & LYB

LTD - Limited Brands, Inc. – Options on the operator of retail brands Victoria’s Secret, Bath & Body Works and others, are more active than usual today, with volume topping 8,500 contracts as of 1:40 p.m. ET, versus the stock’s average daily options volume of 1,058 contracts. The bulk of the action is in the October expiry options, where it appears one strategist purchased roughly 6,000 calls at the Oct. $49 strike for an average premium of $0.35 apiece. Upside call buying may pay off for the trader at expiration later this week if shares in LTD rally 1.7% over the current price of $48.54 to top the average breakeven price of $49.35. Limited Brands holds its 2012 Investor Day starting at 8:30 a.m. on Wednesday morning. The stock traded up to an all-time high of $52.20 in September.

AGNC - American Capital Agency Corp. – Shares in mortgage REIT, American Capital Agency Corp., fell as much as 9% this morning to an intraday low of $29.63, extending recent declines following the Fed’s decision last month to expand its mortgage bond-buying program. The stock, currently off its lows and down 2.4% on the day at $31.91 as of 1:05 p.m. ET, has dropped 13% in the past four weeks. A sizable bullish options trade initiated on AGNC this morning suggests one strategist is prepared to benefit from a rebound in the price of the underlying. The options player appears to have purchased 2,120 calls at the Nov. $31 strike for a premium of $1.27 apiece, and sold 4,240 calls at the Nov. $34 strike at a premium of $0.20 each. Net premium paid to establish the spread amounts to $1.07 per contract, with profits available on the upside in the event that AGNC shares reverse course and top the breakeven price of $32.07 by November expiration. Maximum potential profits of $1.93 per contract are available on the position should…
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Income Virtual Portfolio – Cashing it in for an Early Retirement!

What a crazy couple of weeks.

Ka-ching is the word though as we did NOTHING – as planned back on the 18th, in our last update - as we expected the market to go down then up.  On Friday, we took our short puts off the table as we expect there is a better than average possibility that we go back down again between now and expirations (15th), so we took our short-term winners off the table.  The only move we did execute in the past two weeks, other than taking our virtual money and running, was the sale of 10 FCX July $47 puts for $1.21 ($1,120) on the 24th and those cashed out yesterday at .13, up $1,080 two weeks early so of course we take it off the table!  

Our other short July puts that were cashed out were:  

  • 20 short GLW Aug $20 calls at $1.30, out at .20 – up $2,200
  • 20 XLF July $15 puts sold for .50, out at .06 – up $880
  • 10 INTC July $22 puts sold for $1.05, out at .15 – up $900
  • 5 BA July $75 puts sold for $2.50, out at $1.40 – up $450
  • 5 DE July $77.50 puts sold for net .67, out at


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Income Virtual Portfolio – June Update – Wayyyyy Ahead! (Members Only)

Well, this is embarrassing…  

When we set up this virtual portfolio on April 9th, the idea was to create a virtual portfolio for people like my Mom, who just became a widow, and so many of her friends, who need a relatively safe place to invest their money but would rather not live off the 6% returns generated by the typical retirement fund.  Our primary goals in the virtual portfolio is A) Don’t Lose Money, which is Warren Buffett’s Rule #1 of investing and B) To generate a relatively steady monthly income of $4,000 against our $500,000 virtual portfolio (about 10% a year).  

Despite the fact that we have allocated less than 40% of our cash, we have accidentally made WAY too much money already and this is NOT the lesson we are trying to teach!  What happened is, this past couple of weeks, we had a really nice dip in the markets and our disaster hedges kicked in – as they are supposed to – but our other positions were already well-hedged and well positioned enough that they haven’t really lost anything so we ended up far, far ahead of the curve.  While that’s a good thing, obviously, the danger here is getting the wrong idea.  We got lucky – and one day we may get unlucky – so let’s keep ourselves grounded and people who are just catching up need to keep in mind that this is not meant to be a get-rich quick virtual portfolio.  

If we made too much money on a dip – it’s because we were OVER-hedged and that’s something we will attempt NOT to do in the future.  To some extent, it’s a discipline problem for me because I essentially BET that the market would go down and then I BET the market would go back up with our DIA adjustments (as well as overriding our original plan to stop out our new short puts with 30% losses).  There was a logic to it because we were only about 25% invested so we had plenty of cash to layer in bullish plays if the market did go up and they we would have rolled our protective shorts (which would have been losing) up to cover.  Instead, the shorts paid off and we didn’t have enough bullish positions to hurt us.  As we get more invested, we won’t have the luxury…
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Buy List – Time for a Fresh Batch? (Members Only)

I am one reluctant bull!

I am still trying to be bullish, I am trying to get enthusiastic about this rally and it’s been 3 weeks since I went to mainly cash rather than leave the majority of our Buy List on the table.  The Dow was at 10,850 that day and I didn’t think we’d see the top of 11,000 for more than a day but now we’ve been up here for 2 weeks and yesterday we had strong(ish) volume on a strong up day and I’m still having trouble believing it BUT – believe it we must as long as our upside levels hold.  

Those levels are now: Dow 11,000, S&P 1,200, Nas 2,500, NYSE 7,700 and Russell 720.

We had a nice, relaxing holiday but now we have hard work ahead as I think the investing environment is littered with land mines – ready to blow up in our face if we take any mis-steps.  This bull has horns and we were gored by daring to go bearish in our $100K Virtual Portfolio but our Buy List is all bull and, hopefully, no crap as we try to make safe plays out of the finest companies.  

Ideally, our Buy List plays are about finding bargains.  We may love AAPL, but they are not on sale.  Earning season will hopefully be a great time to do some bargain hunting so this list will be a work in progress but for today we’re just going to review our remaining open plays from the last list and also I would like Members to please use the comment section on this post to suggest companies we should be looking at.  Who do you think is trading way too cheaply?  We especially love dividend payers, of course and I’ll be looking for companies that service the top 10%, not the bottom 90% – who still look pretty screwed to me and, from yesterday’s news, it seems like the top 10% is down to the top 8% but it doesn’t seem to bother the markets so we won’t dwell on the implications until we’re below 5% and, of course, our goal is to be in the top 5% when it all hits the fan…

After having really good timing on our Feb 8th entries, March 18th seemed like a good time to take the money and run and we shut down 2/3 of our Buy List postions.  Let’s do a quick review of the survivors, ones that were "so good" that I couldn’t
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Weekend Trend Spotting and Virtual Portfolio Management

What a wild last 30 day’s we’ve had! 

I’m going to do a little bit of charting today so we don’t miss out on the next potential Meatball Market (where bad news "just doesn’t matter") as we get past earnings season without any serious dings.  Of course, like Icarus, they higher we go, the further we have to fall, especially when we’re getting there on wax wings but part of our fundamental outlook is looking at market sentiment along with the motives, means and opportunity of the manipulators

The Fed threw a little monkey-wrench into the works Thursday with a surprise rate move but the market was amazingly unphased and, as you’ll notice on the chart below, we are neatly repeating the same move we saw in early November, when we waited 400 points for the correction that never came – until January 20th of course!  This week, we took a few pokes at short plays and got burned and we went into the weekend a little bearish but mostly neutral.  Our Buy List is off to the races, of course and only 2 of our 42 trade ideas there (AGNC and DF) are off course – I had meant to do an update this week but there’s no point! 

We don’t pay much attention to the Buy List in our daily posts or even in chat because those trades do their job with very little fuss.  Ideally, the bulk of your virtual portfolio should be made up of boring, low-touch trades that make nice, consistent returns and THAT allows us to have fun with our more aggressive short-term plays that do demand our regular attention.  Someone asked me about allocation the other day and I said that, generally, I feel 75% should be in long-term, well-hedged positions like the ones on our Buy List while the other 25% should be used for more opportunistic trading and, generally, we rarely stray from keeping 1/2 of that in cash to remain flexible. 

Of our aggressive virtual portfolio, we try to keep our allocations to no more than 10% of our cash on new positions (which means the more trades you make, the less you put into the next trade) and limit our losses to 20% of a full position or 2% of that virtual portfolio MAX.  2% of 25% is 0.5% of the total virtual portfolio.  If our Buy/Write Virtual
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The Buy List – Q1 2010 (Members Only)

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Well we finally hit our levels!

Fundamentally, I still don’t buy this rally but, technically, we could go up and up from here.  We discussed in chat yesterday how we may be in a pattern similar to 2003-7 where we came out of the dot com crash and 9/11, which took the market lower than it should have and then government stimulus took us higher than we should have been.  Sure it all ended badly but there was a really good ride up in between.  HOWERVER, 2004, which is about where we would be now, was a choppy and downtrending year.  That is not a problem for our buy/write strategy as long as we keep our heads and scale into our positions.

Obviously we can’t rely on patterns to simply keep repeating themselves.  We could have another terrorist attack, we could have more stimulus or maybe both in our future but, until we see the patten broken, we can play for a similar move.  Our buy/write strategy is ideal for this as it’s a conservative play that gives us 15-20% downside protection.  Combine this with our usual strategy to scale into positons along with some sensible disaster hedges and we can build a nice, bullish virtual portfolio for 2010.  Keep in mind we don’t fear the upside with buy/writes as our "worst case" there is we get called away with a nice profit.  

I put up our latest Watch List on Dec 22nd, following through from our bullish lists of September 6thOctober 8th and Nov 24th.  These are the bullish plays that form the bulk of our virtual portfolios and that sometimes gets lost in our weekly short-term trading.  It was a lot like shooting fish in a barrel, picking winners since September (we had our last Buy List on July 11th our first since the bottom in March, which was followed by the more conservatively mixed $100K Virtual Portfolio that we used from April through July, when we were worried the market would be choppy (it was).  As always, our active lists are found under the Virtual Portfolio Tab near the top of our pages - always check there for recent updates.

We did very well BECAUSE we took well-hedged positions and scaled in slowly!  Changing a Watch List to a Buy List is a big deal as we are saying (and this goes for as long as we hold…
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Insider Scoop

Rovi Announces Sale of MainConcept Businesses

Courtesy of Benzinga.

Related ROVI U.S. Court Of Appeals Sides With Amazon In Rovi Lawsuit Market Wrap For April 8: Markets Bounce Higher As Earnings Season Begins

Rovi Corporation (NASDAQ: ROVI), a global leader in entertainment discovery, announced it has entered into a definitive agreement to sell its DivX and MainConcept businesses. Rovi had previously announced its intent to sell the DivX and MainConcept businesses by the end of the second qua...



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Zero Hedge

PaGiNG DR KRuGMaN...

Courtesy of ZeroHedge. View original post here.

Submitted by williambanzai7.

Paul dabbled in the occult
The spirit of Keynes he'd consult
He was told in a trance
To help debt advance
With a system collapse the result
The Limerick King

...

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Market Shadows

Canary In the Yen Shaft: $10 trillion JGBs; No Bids!

Two guest authors, David Stockman and long-time contributor John Rubino, write about the current state of Abenomics. 

Canary In the Yen Shaft: $10 trillion JGBs; No Bids!

By  

This one matters a lot. Abenomics was predicated on a lunatic notion—namely, that the economic ills from Japan’s massive debt overhang could be cured by a central bank bond buying spree that was designed to be nearly 3X larger relative to its GDP than that of the Fed. Yet anyone with a modicum of common sense and market...



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Chart School

Historical Market Comparisons Are Meaningless

Courtesy of Doug Short.

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

As Chief Strategist for STA Wealth Management, I start each and every day by consuming copious amounts of a heavily caffeinated beverage and a data feed from a litany of web and blog sites. Over the last couple of days in particular, they have been numerous articles on whether the market is currently in a bubble. Here are a few as an example that I just grabbed from RealClearMarkets.com:


Is This a Bubble Market? There's One Way to Tell

...



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Option Review

Wild Ride For Chipotle

Shares in Chipotle Mexican Grill Inc. (Ticker: CMG) opened higher on Thursday morning, rising more than 6.0% to $589.00, after the restaurant operator reported better than expected first-quarter sales ahead of the opening bell. But, the stock began to falter just before lunchtime on concerns the burrito-maker will increase menu prices for the first time in three years. The price of Chipotle’s shares have since fallen into negative territory and currently trade down 3.5% on the session at $532.89 as of 1:50 p.m. ET.

Chart – Shares in Chipotle cool by lunchtime

...

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Phil's Favorites

The Best of TRB 2014 - Investing and Psychology

 

The Best of TRB 2014 – Investing and Psychology

Courtesy of 

This week I’m in Disney World with the family, our first proper vacation all together in years. As such, I’m off the grid and away from computers of any kind (I’m trying to stay married, you guys). But while I’m gone, I’ve left you some stuff to catch up on…

These were the biggest posts – as read and shared by you – during the first quarter of this year. The theme of today’s collection is good investing and understanding the psychological forces at work when we commit capital. No matter how long I’m doing this...



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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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Sabrient

What the Market Wants: Positive News and Stocks at Bargain Prices

Courtesy of David Brown, Sabrient Systems and Gradient Analytics

Last week’s market performance was nasty again, especially for the Small-cap Growth style/cap, down 4%.  Large-caps faired the best, losing only 2.7%.  That’s ugly and today’s market seemed likely to be uglier today with escalating tensions over the weekend in Ukraine. 

But once again, positive economic trumped the beating of the war drums. Retail Sales jumped up 1.1% over a projected 0.8% and last month’s tepid 0.3%, which was revised up to 0.7%.  While autos led, sales were up solidly overall.  Business inventories were about as expected with a positive tone.  Citigroup (C) handily beat estimates to add to the morning’s surprises.  As a result, the market was positive through most of the day, led by the DJI, up 0.91%, and the S&P 500, up 0.82%.  NASDAQ had a less...



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Digital Currencies

Facebook Takes Life Seriously and Moves To Create Its Own Virtual Currency, Increases UltraCoin Valuation Significantly

Courtesy of ZeroHedge. View original post here.

Submitted by Reggie Middleton.

The Financial Times reports:

[Facebook] The social network is only weeks away from obtaining regulatory approval in Ireland for a service that would allow its users to store money on Facebook and use it to pay and exchange money with others, according to several people involved in the process. 

The authorisation from Ireland’s central bank to become an “e-money” institution would allow ...



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OpTrader

Swing trading portfolio - week of April 14th 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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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 is the new Stock World Weekly. Please sign in with your user name and password, or sign up for a free trial to Stock World Weekly. Click here. 

Chart by Paul Price.

...

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Promotions

See Live Demo Of This Google-Like Trade Algorithm

I just wanted to be sure you saw this.  There’s a ‘live’ training webinar this Thursday, March 27th at Noon or 9:00 pm ET.

If GOOGLE, the NSA, and Steve Jobs all got together in a room with the task of building a tremendously accurate trading algorithm… it wouldn’t just be any ordinary system… it’d be the greatest trading algorithm in the world.

Well, I hate to break it to you though… they never got around to building it, but my friends at Market Tamer did.

Follow this link to register for their training webinar where they’ll demonstrate the tested and proven Algorithm powered by the same technological principles that have made GOOGLE the #1 search engine on the planet!

And get this…had you done nothing b...



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Pharmboy

Here We Go Again - Pharma & Biotechs 2014

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

Ladies and Gentlemen, hobos and tramps,
Cross-eyed mosquitoes, and Bow-legged ants,
I come before you, To stand behind you,
To tell you something, I know nothing about.

And so the circus begins in Union Square, San Francisco for this weeks JP Morgan Healthcare Conference.  Will the momentum from 2013, which carried the S&P Spider Biotech ETF to all time highs, carry on in 2014?  The Biotech ETF beat the S&P by better than 3 points.

As I noted in my previous post, Biotechs Galore - IPOs and More, biotechs were rushing to IPOs so that venture capitalists could unwind their holdings (funds are usually 5-7 years), as well as take advantage of the opportune moment...



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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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