After a very wild ride tracking our VERY aggressive virtual portfolio, we closed out the first half with $53,942 – up 115% for the first half of the year and, since we put $11,630 back in the bank above $25,000 from last year’s $10,000 virtual portfolio, that brings us to a grand total of $65,722 – up 555% from the $10K we started with last year. Our goal in this small, aggressive virtual portfolio is $100K but forget the extra $15,722 – as I said last week, that’s our starting basis with a nice profit so we put that back into nice, safe, conservative investments (like our Income Virtual Portfolio) and that leaves us $50,000 to play with.
Our first week of trades has already been very interesting. Make sure you to read the original post and the update if you haven’t already to get an idea of what we are trying to learn by following this "hyper-aggressive" virtual portfolio model – especially last quarter’s lesson on taking those profits off the table and working on those losers. Our "biggest loser" of last quarter was, of course, FAS and those Aug $23 calls hit $5 last week (we are already out), which is $40,000! Anytime you can roll and DD a position in a $25,000 virtual portfolio that eventually cashes out for $40,000 – you will probably come out well…
The problem is mainly in learning how to stick with a position like that and that requires a lot of conviction because there were dozens of opportunities to panic out with a loss and that’s why we practice this kind of trading – you need to get the experience in playing these out over time so that you can learn to BELIEVE in the strategy and, even then, it should only be used in places where you REALLY have a very good reason to believe a stock or ETF will, eventually, come back sharply enough to make all the work pay off – because it’s a LOT of work!
Of course, no one makes 100% every six months by taking it easy, right? Practice, practice, practice with virtual trading until you get comfortable with the strategies and, even then, use them sparingly. This aggressive virtual portfolio is meant to be a small part (10% or less) of a larger, more conservative virtual portfolio, like our nice,…
Add Clinical Data, Inc. (CLDA) SHORT at the market, 7/30/10
Clinical Data, Inc. operates as a global biotechnology company developing early and late stage targeted therapeutics, as well as genetic and pharmacogenomic tests that detect serious diseases and help predict drug safety, tolerability, and efficacy.
After taking profits on earnings sell-offs from AMAG and BOOM, we are adding Clinical Data, Inc. (CLDA) as the 8th SHORT in our currently BALANCED tilt. CLDA is rated a STRONGSELL by Sabrient with a BALANCE SHEET score barely registering at 1.1 (out of 100) and almost non-existent FUNDAMENTALS score of 0.3 (out of 100). These rosy figures combine with five analysts forecasting a second quarter loss of -$.63. That is coming off a mind-numbing first quarter loss of -$1.44 per share, compared with expectations for only losing -$.63. These negatives provide us with a heavy dose of “preponderance of evidence” to believe CLDA is a reasonable SHORT at the market, Friday July 30, 2010.
As expected in our July 26, 2010 post, IM posted better than expected results and higher revenues after the market closed on Thursday. Analysts had been forecasting a profit of +$.37 per share and revenue of $7.9B, but IM delivered a healthy +$.44 per share and revenue of $8.2B. "Every region performed well, with our two largest regions doubling and tripling operating profits on double-digit sales growth," Ingram Micro Chief Executive Gregory Spierkel said in a statement. That is the type of BOOM! (see BOOM! article this morning) statement we like to hear from our long stocks.
We feel very comfortable with the position we put on using Phil’s Buy/Write Strategy. IM is trading +1.67% today at $16.44. Recall that we took in $2.50 in option premium on Monday by selling the December 2010 $17.50 calls and puts. On Monday, we wrote:
Add LONG Ingram Micro (IM) at the market Monday July 26.
We like IM leading into its earnings announcement on July 29, 2010. The 10 analysts covering
I saw an infomercial from Fisher Investments where Ken Fisher mentioned 3 attributes that he believes are keys to successful investing which can be crudely summarized as follows:
Focus on long-term investing
Stay ahead of the crowd by knowing what others don’t
The first point is certainly critical and weeds out the greedy ‘get-rich-quick’ traders from the patient traders.Our policy here is that of ‘play-to-win’.We like to be aggressive in seeking profits with short-term plays but we also recognize that if those trades don’t work out that we can still rely on longer term plays to end up profitable in the end.
The second point regarding expecting surprises asks the trader the question “Are you managing risk well and do you have contingency plans in mind each time you enter a trade?”While the second part of the sentence is important, the first is paramount!No matter what you do, never violate risk management rules which we have discussed here in the past.
The third point is a luxury in my view.Of course, it would be nice to know what others don’t but it’s not critical. By definition only a small number can have information that the rest of the crowd does not have so if you are not trading full-time you have to find another way of making money without relying on staying ahead of the crowd.
As I was scanning for trades over the weekend, I came across one trade which might in fact fall into the category of offering relatively attractive profits by relying on options rather than additional information.In fact, I know many of our members find it hard to focus on the daily trades and would like to construct virtual portfolios with the longer-term in mind. As Phil mentioned in his classic "James Bond Investing" article, playing short-term positions requires constant vigilance and you need to ready to turn on a dime with small windows of opportunity and this kind of trading is not for everyone. Even Phil has a rule of thumb that 75% of a virtual…
I often talk about stupid options tricks in member chat and I thought it would make for good weekend reading.
Today we’ll look at salvaging bad positions, something that comes up once in a while in any virtual portfolio. Not everything has to be buy, hold or sell with options – there is always hedging and there is always an option! Since many of us are short on USO and not happy at the moment, I thought we’d focus on various salvage strategies for positions that go against us but, before we get into that, I did promise we’d discuss scaling, and the two do go hand in hand…
Scaling into a position is always a sensible strategy, we can’t be right all the time with our entries so we need to plan ahead for being wrong. Also, we need to plan for our position going against us tomorrow, next week or next month. Ideally, you should never be in any position that risks discomfort if you lose it. If you have a large virtual portfolio, it’s good to keep most of your positions under 2%. If you have a medium virtual portfolio, 5% and, if you are in the $50,000 range or less, it will be hard to avoid having positions that are 10% of your virtual portfolio and that’s where scaling is even more important so we’re going to focus on the small entries and I’ll assume the big boys can multiply by 2-10 by themselves.
$50,000 is not a small amount of money and we can assume that, if that is your stock virtual portfolio, that you worked hard to make it and you would rather not lose it. This is all the more reason to take a more conservative stance with your positions. As I said, you don’t want any position to be more than 10%, or $5,000. That doesn’t mean it can never happen, but you need to treat anything over 10% as "uncomfortable" and look to reduce it when there is a good opportunity.
When entering a new position, we want to be ready to be wrong. Sun Tzu said: "Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat." We made a nice profit on Tuesday morning on USO puts we had held over the weekend. $32 puts we had at .80 from Friday were sold at $1.05 Tuesday…
Foster Wheeler AG (Nasdaq: FWLT) today announced that it has entered into a definitive agreement with AMEC plc (OTC: AMCBF) pursuant to which AMEC will make an offer to acquire all the issued and to be issued share capital of the Company. Under the terms of the offer, AMEC will offer to exchange for each outstanding share of Foster Wheeler common stock transaction consideration consisting of 0.8998 shares of AMEC stock and $16.00 in cash.
Separately, Foster Wheeler expects to pay a one-time dividend of $0.40 per share prior to, and not conditional on, the closing of the offer. The Company expects that there will be no Swiss withholding taxes on the...
The bankruptcy of the once largest Bitcoin exchange may be history, but now the real drama begins.
First, over the weekend, allegations surfaced that not the whole truth may have been revealed during the heartfelt announcement by Mt. Gox CEO, Mark Karpeles, who claimed that $400 million in Bitcoin were stolen by hackers. As Forbes reported, hackers took over the Reddit account and personal blog of Mark Karpeles, to reveal that the exchange he ran had actually kept at least some of the bitcoins that the company had said were stolen from users.
"It’s time that MTGOX got the bitcoin communities wrath instead of [the] Bitcoin Community gettin...
Here was the score after Tesla Motors spent more than a year attempting to establish a direct sales operation in New Jersey: 0 to 696,749.
It was a blowout.
The luxe electric car company was outraged Tuesday when the The New Jersey Motor Vehicle Commission approved a proposal banning auto manufacturers from selling cars directly to consumers. In a blog post and series of tweets Tesla blamed the move on bad faith negotiating by the administration of Gov. Chris Christie and "attacks" from the New Jersey Coalitio...
Like yesterday, there was little economic news to influence the market. The S&P 500 opened fractionally higher, dipped briefly into the red and hit its 0.28% intraday high shortly before 11 AM. The index then sold off in a couple of waves to its -0.71% intraday low shortly after 3 PM. It trimmed its decline by the close to finish down 0.51, which puts it 0.55% below its record high on Friday. Tomorrow is another day of no significant US economic news, although the Eurozone's Industrial Production will be announced before the US markets open.
The yield on the 10-year note closed at 2.77%, down 2 bps from yesterday's close. The interim high was 3.04% at the end of 2013.
Shares in McDonald’s are up the most in the Dow Jones Industrial Average today, rising nearly 4.0% to $98.92 and the highest level since November 26th during the first hour of the session. The rally in shares of the world’s largest restaurant chain today is more than making up for yesterday’s dip in the price of the underlying on the heels of a larger than expected dip in February same store sales. Options traders hungry for continued gains in the stock in the very near term appear to be snapping up weekly options across several striking prices today.
The most traded weekly options by volume are the 14 Mar ’14 $97 strike...
DAILY PRICE REPORT
Today’s AM fix was USD 1,348.00, EUR 973.57 and GBP 810.44 per ounce.
Yesterday’s AM fix was USD 1,334.25, EUR 961.55 and GBP 800.87 per ounce.
Gold rose $0.7 or 0.05% yesterday, to $1,339.90/oz. Silver dropped $0.08 or 0.38% to $20.81/oz.
Gold in US Dollars - 1 Year (Bloomberg)
Gold rose in all currencies again today and headed towards a four month high in dollar terms as the standoff between Russia and Ukraine led to demand for gold as a haven. Silver surged 1.4%, platinum added 0.3% to $1,481.60/oz and pal...
Today was the beginning of “spring break” for the market. At least it seemed that way with a very low trading volume of only 600M shares on the NYSE. Either the college crowd does more trading than we imagined or parents are taking the week off as well.
The market barely woke up for the session with the S&P 500 down 0.05% and the NASDAQ down 0.03%. However, the DJI must have gotten extra sleep this weekend as it was up 0.21%. Small caps took a bigger hit with the Russell 2000 dropping nearly 0.50% percent. There was nothing major in the news other than a disappointing trading figure from China. Indeed, the whole week will only include a meager four major economic reports with Wholesale Inventories tomorrow, Retail Sales and Jobless Claims on Thursday, and Producer Price In...
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...
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...
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 act...
Note: The material presented in this commentary is provided for
informational purposes only and is based upon information that is
considered to be reliable. However, neither MaddJack Enterprises, LLC
d/b/a PhilStockWorld (PSW) nor its affiliates
warrant its completeness, accuracy or adequacy and it should not be relied upon as such. Neither PSW nor its affiliates are responsible for any errors or omissions or for results obtained from the use of this information. Past performance, including the tracking of virtual trades and portfolios for educational purposes, is not necessarily indicative of future results. Neither Phil, Optrader, or anyone related to PSW is a registered financial adviser and they may hold positions in the stocks mentioned, which may change at any time without notice. Do not buy or sell based on anything that is written here, the risk of loss in trading is great.
This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities or other financial instruments mentioned in this material are not suitable for all investors. Any opinions expressed herein are given in good faith, are subject to change without notice, and are only intended at the moment of their issue as conditions quickly change. The information contained herein does not constitute advice on the tax consequences of making any particular investment decision. This material does not take into account your particular investment objectives, financial situations or needs and is not intended as a recommendation to you of any particular securities, financial instruments or strategies. Before investing, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.