IYR – iShares Dow Jones U.S. Real Estate Index ETF – Bullish options activity on the IYR flies in the face of bearish momentum across equities in the broader market today. The investor responsible for the optimistic positioning in the February contract appears little concerned with the current 2% decline in the value per IYR share today to $45.31. It looks like the trader sold a put credit spread in order to offset the cost of buying out-of-the-money call options. The three-legged combination involved the sale of 10,000 puts at the February $45 strike for a premium of $1.56 each, spread against the purchase of 10,000 puts at the lower February $42 strike for $0.65 apiece. The net credit of $0.91 per contract received on the credit spread is more than enough to cover the cost of the 10,000 calls purchased at the February $48 strike for $0.55 each. After establishing all three legs of the spread, the trader pockets $0.36 per contract. The investor keeps the full $0.36 only if IYR’s shares trade above $45.00 through expiration next month. Additional profits amass only if shares of the fund rally 6% from the current price to surpass $48.00. We note that the investor responsible for the trade may suffer maximum potential losses of $2.64 per contract if the price of the underlying slips to $42.00 by expiration day.
PFE – Pfizer, Inc. – A bullish risk reversal on the global pharmaceutical company today suggests shares may rally to $20.00 by expiration in June. Pfizer’s shares withstood downward market pressure for the majority of the trading session, and even climbed slightly higher in earlier trading, but edged 0.75% lower to $18.70 by 2:15 pm (EDT). The reversal play involved the sale of 10,000 in-the-money put options at the June $20 strike for a premium of $2.07 apiece, spread against the purchase of 10,000 out-of-the-money call options at the same strike for $0.70 in premium. The investor receives a net credit of $1.37 per contract, which he keeps if PFE’s shares rally up to $20.00 by expiration. The short sale of put options implies the trader is willing to have shares put to him at an effective price of $18.63 each. However, the investor would optimally like to see shares rally at least 7% over the current price to…
Technicians don’t crack snake eggs into a bowl and whip an elongated pinky fingernail through the yolk to make proclamations about the market’s future.
That would be kind of cool, but it probably wouldn’t be very effective.
Instead, they study the behavior of their fellow market participants to detect the possibility of turning points or meaningful change. There’s no mechanical equation or formula, which leads simpletons to the conclusion that “It doesn’t work.” But when used appropriately, TA can give you a...
When you find yourself in a hole, the saying goes, stop digging. A simple lesson that arguably has bypassed a mining industry that’s wiped out more than $1.4 trillion of shareholder value by digging too many holes around the globe. The industry's 73 percent plunge from a 2011 peak is far beyond the oil industry's 49 percent loss ...
When one looks at the deplorable state of the world, one cannot help but wonder at the insouciance of the American people. Where are they? Do they exist or are they a myth? Have they been put to sleep by an evil demon? Are they so lost in The Matrix that they cannot get out?
Ever since Clinton’s second term the US has been consistently acting internationally and domestically as a criminal, disregarding its own laws, international laws, the sovereignty of other countries, and the US Constitution. A worse criminal govern...
NOTE: readtheticker.com does allow users to load objects and text on charts, however some annotations are by a free third party image tool named Paint.net
.."There is a time for all things, but I didn’t know it. And that is precisely what beats so many men in Wall Street who are very far from being in the main sucker class. There is the plain fool, who does the wrong thing at all times everywhere, but there is the Wall Street fool, who thinks h...
In May of last year, the S&P hit a key level and stopped on a dime. We applied Fibonacci tools to the highs in 2007 and the lows in 2009, to the chart above. The 161% Fibonacci extension level came into play in the 2,150 zone last year and when hit at (1), the markets stopped on a dime.
If your tools or adviser has suggested to be long and strong since May of 2015, that advice has been costly.
Our take, “Free advice that is wrong, is expensive!!!”
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Throughout the past 30 days of wild volatility, here’s what I didn’t do.
Panic. Worry. Sell.
In fact, the best I did was add to a couple of positions yesterday. The world was already in an uncertain state for the past 3+ years. It’s just that with the market rising, we pushed the issue to the back of our mind and ignored it.
A number of systemic, structural forces are intersecting in 2016. One is the rise of non-state, non-central-bank-issued crypto-currencies.
We all know money is created and distributed by governments and central banks. The reason is simple: control the money and you control everything.
The invention of the blockchain and crypto-currencies such as Bitcoin have opened the door to non-state, non-central-bank currencies--money that is global and independent of any state or central bank, or indeed, any bank, as crypto-currencies are structurally peer-to-peer, meaning they don't require a bank to function: people can exchange crypto-currencies to pay for goods and services without a bank acting as a clearinghouse for all these transactions.
Last year, the S&P 500 large caps closed 2015 essentially flat on a total return basis, while the NASDAQ 100 showed a little better performance at +8.3% and the Russell 2000 small caps fell -5.9%. Overall, stocks disappointed even in the face of modest expectations, especially the small caps as market leadership was mostly limited to a handful of large and mega-cap darlings.
Notably, the full year chart for the S&P 500 looks very much like 2011. It got off to a good start, drifted sideways for...
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Baxter Int. (BAX) is splitting off its BioSciences division into a new company called Baxalta. Shares of Baxalta will be given as a tax-free dividend, in the ratio of one to one, to BAX holders on record on June 17, 2015. That means, if you want to receive the Baxalta dividend, you need to buy the stock this week (on or before June 12).
Back in December, I wrote a post on my blog where I compared the performances of various ETFs related to the oil industry. I was looking for the best possible proxy to match the moves of oil prices if you didn't want to play with futures. At the time, I concluded that for medium term trades, USO and the leveraged ETFs UCO and SCO were the most promising. Longer term, broader ETFs like OIH and XLE might make better investment if oil prices do recover to more profitable prices since ETF linked to futures like USO, UCO and SCO do suffer from decay. It also seemed that DIG and DUG could be promising if OIH could recover as it should with the price of oil, but that they don't make a good proxy for the price of oil itself.
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 email@example.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.
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