XLE -Shares of the energy fund are up more than 1% to $52.92. We observed near-term bearishness and medium-term bullishness displayed through options on the ETF today. A ratio put spread initiated in the September contract indicates near-term pessimism by some traders. The transaction involved the purchase of 2,500 puts at the September 52 strike for 1.69 apiece spread against the sale of 5,000 puts at the lower September 48 strike for 55 cents each. The net cost of the trade amounts to 59 cents and yields maximum potential profits to the downside of 3.41 if shares fall to $48.00 by expiration. Bullish sentiment was seen at the December 57 strike where 2,100 calls were coveted for 2.00 apiece. An 11.5% rally in shares to the breakeven price of $59.00 will allow this optimistic energy player to begin to amass profits by expiration in December. – Energy Select Sector SPDR ETF –
PFEA - Short straddle initiated in the pharmaceutical company’s January 2011 contract today suggests far-term bullish sentiment on the stock. Shares of PFE are currently higher by approximately 0.5% to $16.71. The straddle was enacted at the January 20 strike where 15,000 calls were shed for 1.12 apiece and 15,000 puts sold for 4.90 per contract. The gross premium on the transaction amounts to 6.02, and will be fully retained by the straddle-seller if shares settle at $20.00 by expiration. Over the next sixteen months shares must rally about 20% for the trader to bank the full 6.02 premium. If the stock fails to center at $20.00, the investor’s premium will erode down to zero if shares move sufficiently in either direction. Once the entire premium has evaporated, the trader will begin to accrue losses above the breakeven point to the upside at $26.02 or beneath the breakeven point to the downside at $13.98. We note that Pfizer has not traded above $20.00 since May 20, 2008. Nearer-term trades indicate that investors may be bracing for declines in the stock. The October 16 strike price had 4,100 puts picked up for 43 cents apiece while the higher December 17 strike had about 2,400 puts purchased at 1.34 per contract. – Pfizer, Inc. –
FRE - Investors were observed making bullish bets on Freddie today as shares soared higher than 30% at times to a maximum of $2.34. Shares are…
"'When I use a word,' Humpty Dumpty said, in rather a scornful tone, `it means just what I choose it to mean -- neither more nor less.'
`The question is,' said Alice, `whether you can make words mean so many different things.'
`The question is,' said Humpty Dumpty, `to be master -- that's all.'"
Lewis Carroll
I thought it was interesting that Narayan Kocherlakota, president of the Minneapolis Federal Reserve Bank, decided to print a recovery assertion now. This seems almost like a followup to the Recession Myth Claim put forward a few years ago by Deregulator in Chief Phil Gramm: ...
The S&P 500 got off to weak start and, after retracing a modest morning rally, spent most of the day in the shallow red with an intraday low of 0.63%. But in the last seven minutes of trading, the index recovered enough to a make a small gain of 0.14%. This is the fourth advance, the first was Monday's 1.60 surge, but the last three have ranged from 0.05% to 0.17% with today's close near the high of the miserly three-day series.
The index is now up 5.02% for 2012, which is 6.93% off the interim closing high.
From an intermediate perspective, the S&P 500 is 95.2% above the March 2009 closing low and 15.6% below the nominal all-time high of October 2007.
Below are two charts of the index, with and without the 50 and 200-day moving averages.
And it was shaping up to be such a good year. According to the latest just released HSBC hedge fund performance update, increasingly more funds are starting to lose it, certainly for the month, but increasingly more for the year. How many LPs will be eager to keep on paying 2% management fees (forget performance) to funds who at best are long AAPL (at least 226 of them), and at worst have underperformed the S&P, for the second year in a row, by anywhere from 5 to 15%?
TIF - Tiffany & Co., Inc. – A surprise earnings miss and a reduced full-year profit and sales forecast from luxury jewelry retailer, Tiffany & Co., took some of the luster out of its shares today, with the stock trading down 8.5% at $56.55 as of 11:50 a.m. in New York. Options activity on Tiffany this morning suggests mixed sentiment on the st...
RealNetworks, Inc. (NASDAQ: RNWK) today announced that it has reached an agreement with the Washington State Attorney General over discontinued e-commerce practices. In accordance with the settlement agreement, RealNetworks has committed to:
Discontinuing the use of pre-checked boxes for purchases of RealNetworks subscription products; Spelling out more clearly the material terms of RealNetworks product offerings; Offering online cancellation of subscription offerings; Enhancing RealNetworks customer support guidelines regarding cancellation. Statement from Thomas Nielsen, President & CEO of RealNetworks:
"About two years ago, the Washington State Attorney General's Office contacted us regarding concerns they had with some of our e-commerce practices.
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...
First we'll go to the technicals. Back in mid April I had opined a 'bear flag' formation was being created. [Apr 17, 2012: Potential Bear Flag Forming] But the market being the difficult beast it is, head faked everyone and rather than a break down from said flag it first went UP and nearly touched yearly highs. This caused everyone to think the bear flag had failed…. only to lead to a horrid May in the market. Generally a bear flag will resolve relatively quickly but the longer...
Despite the fact that U.S. equities are well-positioned and well-supported to go up, once again it is the headlines out of Europe—especially Greece—that are scaring off investors. Some are saying that it is now likely (and even desirable) that Greece will default on all its sovereign debt, withdraw from the euro, and severely devalue its domestic currency (Drachma?). This will allow them to operate a balanced budget while pumping cash into growth initiatives, rather than suffer the ravages of Germany-mandated austerity.
Some say, so what? Greece makes up only about 2% of the Eurozone’s overall economy. Nevertheless, you might say that t...
Markets died and then rallied to flat again as European leaders “prepared contingencies” for a possible Grexit
Markets died hard and fast earlier today as major indexes registered as much as 1.5% of losses after news that Euro zone officials were unofficially “preparing contingencies” for a Greek exit from the Euro. Unofficial statements were not enough to keep markets down however, as major indexes rallied back to flat levels by the end of the day.
So the world continues to wait on Europe, as the SPDR S&P 500 ETF (NYSEACA:SPY) gained .05%, the SPDR Dow Jones Industrial Average ETF (NYSEARCA:...
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
NEW: Ilene is available to chat with Members regarding topics presented in SWW, comments are found below each post.
Here is this week's test version of the latest newsletter. We apologize for some formatting issues that need to be worked out. Please tell us what you think.
Reminder: Pharmboy is available to chat with Members, comments are found below each post.
In this article, please revisit an article written two years ago titled, "The Calm Before the Storm." This article focused on the patent cliff that was looming in the pharmaceutical industry, that was later picked up by the New York Times and several other bloggers! Subsequent articles were written about big pharma company's revenue streams, and the pros and cons of of their later stage pipelines. Other articles have also attempted to identify smaller biotechs with the potential to reap big reward...
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 P...
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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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...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
(
