Posts Tagged ‘IRA Investing’

Writing Calls on Volatility

I picked up this idea from Jeff Augen’s book, "Trading Realities: The Truth, the Lies and the Hype In-Between."  Augen has written a fine series of books on trading options and I have bought and sampled from all of them.  He notes the favorable risk/reward profile on buying VXX, which is a ETN attempting to track the short-term futures on the VIX, and selling at-the-money calls on it while the VIX is low.  Augen notes that theoretically you could lower your cost basis in a year’s time to almost zero using this method every month.  But it gets even more interesting using weekly options.  I bought VXX ETN at $14.92 today and sold the $15 strike on the October 22 weekly options for $.58.   That is about 3.8% profit if VXX does not move at all.

That is what I’m trying to average on a trade per month!  

Let’s take a look at the one year chart on VXX:

VXX chart 

You can see how low VXX has dropped.  Unlike a stock you know this chart is not going to drop to zero.  Volatility cannot disappear or go bankrupt.  There will always be some level of volatility, so there is a limit to downside risk.  The VIX, which is a measure of put buying, closed at 21.68 today, which is fairly low volatility.  If you had to say which way volatility is moving right now, is it more likely to go up or down in the next month?  I’m voting for up, since we have earnings season, elections and a rally that looks like it could roll over at any time.  With a low VIX and higher expected volatility events, doesn’t it make sense to sell covered calls on volatility at least until the VIX clears 25.  

I’m planning to sell the weekly at-the-money calls up to that point, which may only be one week if the market drops.  I’m sure speculators could arrange more profitable trades, but I am looking for income and retirement investments, so I’m not getting greedy and buying calls or some other idea.  I am considering selling at-the-money puts in my margin account.  Let me know what you think of the idea.  The risks I can foresee are poor tracking of the VIX by VXX and that volatility is driven into oblivion.  But the VIX rarely drops below 15, which would be a 25%…
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Zero Hedge

"Virtue Signaling"... Or Why Clinton Is In Trouble

Courtesy of ZeroHedge. View original post here.

Submitted by Ben Hunt via Salient Partners' Epsilon Theory blog,

Hillary Clinton would make a sober, smart and pragmatic president.

Donald Trump would be a catastrophe.

? LA Times Editorial Board endorsement, September 23, 2016

Yep, gotta get me some of that pragmatism! It’s code for “typical lyi...



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Phil's Favorites

Six Current or Former Deutsche Bank Managers Charged with Fraud Related to Monte dei Paschi Derivatives

Courtesy of Mish.

Deutsche bank shares recovered from a plunge to all-time record lows on Friday on a “save the day” news leak that the US department of Justice would reduce its mortgage-manipulation fine from $14 billion to $5.4 billion.

Shares that were down about 9% rallied to close up 6.4%. Deutsche bank had set aside $5.5 billion to cover losses. The $14 billion fine was nearly as large as companies market cap of about $18 billion.

Today, six current or former Deutsche Bank managers along with seven other individuals were charged with fraud related to Monte dei Paschi derivatives. Banca Monte dei Paschi, in Italy, is the world’s oldest bank, dating to the year 1624.

Please consider ...



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ValueWalk

Details Of The FIFO LIFO Inventory Valuation Methods

By Jae Jun. Originally published at ValueWalk.

Details Of The FIFO LIFO Inventory Valuation Methods by Jae Jun

Table of Contents



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Atlanta Fed trims U.S. third-quarter growth forecast to 2.4 percent (Reuters)

The U.S. economy is on track to grow at a 2.4 percent annualized rate in the third quarter, the Atlanta Federal Reserve's GDP Now forecast model showed on Friday, following the latest data on inventories, trade and consumer spending this week.

Satellite Data Show China May Have Stored More Crude Than Estimated (Bloomberg)

...



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Mapping The Market

Sad Clown

A thought from Jean-Luc:

Every day that goes by brings more shady deals from Trump's past – now Cuba, more stuff about his foundation, his taxes! No wonder he doesn't want to release his taxes either – who the heck knows is buried in there.

In the meantime, Trump gets up at 5:00 AM to tweet about Alicia Machado! What a despicable coward little man-child!

Atrios sums up my feelings:

Sad Clown

I admit I find it hard to keep up the sense of humor about things these days. We laughed a lot during the Bush years, didn't we, my fellow pony aficionados. Trump should just make me laugh and laugh and laugh and laugh. But with Bush we could sorta pretend that people voted for him because they didn't quite see him for what he was. There's no doing that with Trump. Trump is Trump. He won't win, but a lot of...



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Kimble Charting Solutions

Commodities attempting triple breakout, says Joe Friday

Courtesy of Chris Kimble.

Below looks at Commodities ETF DBC over the past decade. Since the highs in 2008, DBC has been a great asset to avoid. Is it time to start paying attention and potentially own this hard hit ETF? Check out the rare price situation below in DBC.

CLICK ON CHART TO ENLARGE

The CRB (Commodities Index) has been down 5-years in a row, this has never happened in the history of commoditi...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker.

Please review a collection of WWW browsing results.



Date Found: Saturday, 26 March 2016, 02:36:15 PM

Click for popup. Clear your browser cache if image is not showing.
Comment: ZH: Its a BULLARD market, the FED jaw boning is keeping the market up!



Date Found: Sunday, 27 March 2016, 02:31:30 PM

Click for popup. Clear your browser cache if image is not showing.
Comment: RTT: World trade near 2008/09 lows. SP500 near all time highs. PLACE YOUR BETS! Roll up! Roll up!



Date Found: Tuesday, 29 March 2016, 02:42:11 PM

Click for popup. Clear your browser cach...



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OpTrader

Swing trading portfolio - week of September 26th, 2016

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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Members' Corner

Market Liquidity and Macroeconomic Bullshit

 

Market Liquidity and Macroeconomic Bullshit

Courtesy of The Nattering Naybob

STJL - "Apparently macroeconomics is all bullshit – ROFL! Paging Naybob now… Famous Economist Paul Romer Says Macroeconomics Is All Bullshit."

The Nattering One muses... Macroeconomics as practiced by academics and those in charge is pure voodoo. Better to chant over goat blood, bird feathers and scattered entrails...

As for reality, overnight CNH HIBOR (...



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Digital Currencies

Gold, Silver and Blockchain - Fintech Solutions To Negative Rates, Bail-ins, Currency Debasement and Cashless

Courtesy of ZeroHedge. View original post here.

By Jan Skoyles

I was so pleased yesterday by the announcement that I have joined the Research team at GoldCore as it meant that I could finally start talking about it and was back in a role that lets me indulge in my passion by researching and geeking out on all things gold, silver and money.

...



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Biotech

Epizyme - A Waiting Game

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

Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer.  One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."

Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.  

Genetic components are the DNA sequences that are 'inherited.'  Some of these genes are stronger than others in their expression (e.g., eye color).  Yet, some genes turn on or off due to external factors (environmental), and it is und...



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All About Trends

Mid-Day Update

Reminder: Harlan 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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News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

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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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