Guest View
User: Pass: | become a member
Posts Tagged ‘Rolling Options’

Option Strategy Workshop: Rolling Contracts

 OptionSage submits: 

Markets can remain irrational longer than you can remain solvent” – John Maynard Keynes

Much like Newton was inspired to understand gravity as the Apple fell on his head (or maybe not according to this article!) so too Phil was inspired by nature in his profound work which I affectionately label “Phil’s Market Wave Theory”.  With this week’s move in the markets, it seems a particularly appropriate time to recall what Phil said:  

At the beach, many people stake out spots near the water but, as the day goes on, the tide gets higher and the people move to higher ground.  Some people go much higher and some people move just a little but there’s a certain point where the water crests up onto the beach and sends everyone scurrying for higher ground in a mad dash.

Then it goes the other way!

Just when it seems that the water is going to go higher than it ever went before (and, thanks to global warming it does!) and just when you start to think the next wave will wash over the top and soak everyone, it suddenly stops and an hour later you can’t believe you ever thought the water would get that high as it seems so impossible as you watch it pull away from the beach, exposing sand that hadn’t been seen since the morning .

“The markets are like that.  Frothy highs and "impossible" lows and lots of investors scurrying back an forth trying to guess where the next wave will stop (day traders) while others stake out medium-term positions (deck chair people) and still others make substantial long-term plays (beach house owners) and are willing to ride out even the harshest storms.  While I have fun playing in the waves I guess I have to think of myself as a shell collector, looking for the opportunities that are uncovered once all the excitement dies down.  Let the other people get soaked trying to guess the waves – we can do very well renting deck chairs in any market!

Rolling Options to Ride the Waves

In the stock market, renting deck chairs is akin to selling options (in this case call options).  Always a buyer is on the prowl for the next
continue reading


Tags: , , ,




 

Help One Of Our Own PSW Members

"Hello PSW Members –

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 jennifersurovy@yahoo.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.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743"

Thank you for you time!

 
 

Phil's Favorites

How RenTec Made More Than $34 Billion In Profits Since 1998: "Fictional Derivatives"

How RenTec Made More Than $34 Billion In Profits Since 1998: "Fictional Derivatives"

Courtesy of Zero Hedge

Ten days ago Bloomberg reported that as a result of various tax dodges, one of the fastest-trading hedge funds in the US, Jim Simmons' Renaissance Technologies, had managed to avoid paying ordinary income tax on billions in profits, by classifying trades that often times had a holding period of minutes if not seconds, as a long-term capital gain. As part of this finding, it was reported that there would be a hearing chaired by none other than ...



more from Ilene

Chart School

S&P 500 Snapshot: An Intraday Record High

Courtesy of Doug Short.

The pre-open release of the Consumer Price Index showed core inflation in June to be a tad lighter than forecasts. The S&P 500 opened at its 0.10% intraday low and rallied to its 0.64% record intraday high about ninety minutes into the session. Strong existing home sales announced at 10 AM certainly helped. The index spent the rest of the day in a narrow trading range and closed with a 0.50% gain, a mere 0.10% off its record close of July 3rd.

The yield on the 10-year note ended the day at 2.48%, 1 bp below yesterday's close. It is now only 4 bps above its interim closing low of May 28th.

Here is a 15-minute chart of the past five sessions. The S&P 500 is up 7.31% year-to-date.

Volume on the SPY ETF, whi...



more from Chart School

Zero Hedge

US State Department "Confident" MH17 "Mistakenly" Downed By Separatists, Finds No Direct Link To Russia

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

With a somewhat shocking lack of evidence, AP reports that US officials (on condition of anonymity) have stated that intelligence suggests Malaysian Airlines Flight MH17 was mistakenly shot down by separatists and can find no link to Russia.

However, the unnamed non-proof-providing officials believed Russia "created the conditions" for the downing of MH17. For now there is not even a YouTube clip to confirm this... as officials do not make the new technical evidence public...

As opposed to Russia's detailed 30-minute press conference,

  • U.S. INTELLIGENCE OFFICIALS DID NOT MAKE PUBLIC NEW TECHNICAL E...


more from Tyler

Option Review

Sizable Call Spread Trades On Orexigen

A large call spread initiated on Orexigen Therapeutics, Inc. (Ticker: OREX) on Monday morning looks for shares in the name to rally approximately 30% by September expiration. The September expiration is noteworthy as the company awaits the results of the FDA’s review of its resubmitted New Drug Application (NDA) for NB32, an investigational medication being evaluated for weight loss, after the review was extended for three months back in June. The upcoming Prescription Drug User Fee Act (PDUFA) date is September 11, 2014, according to a press release issued by the company. Shares in Orexigen today are up roughly 0.40% at $5.34 as of 2:15 p.m. ET.

...

more from Caitlin

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...

more from David

Insider Scoop

NQ Mobile Shares Plummet After Announcing Dismissal Of PwC

Courtesy of Benzinga.

Related NQ Investors Focus On Earnings Rather Than Geopolitical Tensions NQ Mobile In Possible Short Squeeze; Muddy Waters Sticks To Guns

Shares of NQ Mobile (NYSE: NQ) dropped as much as 24 percent in Friday's pre-market after the company announced that it has dismissed Pricewaterho...



http://www.insidercow.com/ more from Insider

Sabrient

Sector Detector: Bulls remain unfazed by borderline Black Swans

Courtesy of Sabrient Systems and Gradient Analytics

Despite a highly eventful week in the news, not much has changed from a stock market perspective. No doubt, investors have grown immune to the daily reports of geopolitical turmoil, including Ukraine vs. Russia for control of the eastern regions, Japan’s dispute with China over territorial waters, Sunni vs. Shiite for control of Iraq, Christians being driven out by Islamists, and other religious conflicts in places like Nigeria and Central African Republic. But last Thursday’s news of the Malaysian airliner tragically getting shot down over Ukraine, coupled with Israel’s ground incursion into Gaza, had the makings of a potential Black Swan event, which in my view is the only thing that could derail the relentless bull march higher in stocks.

Nevertheless, when it became clear that the airline...



more from Sabrient

OpTrader

Swing trading portfolio - week of July 21st, 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 ...



more from OpTrader

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's the latest Stock World Weekly. Please use your PSW user name and password to log in. (You may take a free trial here.)

#452331232 / gettyimages.com ...

more from SWW

Market Shadows

Danger: Falling Prices

Danger: Falling Prices

By Dr. Paul Price of Market Shadows

 

We tried holding up stock prices but couldn’t get the job done. Market Shadows’ Virtual Value Portfolio dipped by 2% during the week but still holds on to a market-beating 8.45% gain YTD. There was no escaping the downdraft after a major Portuguese bank failed. Of all the triggers for a large selloff, I’d guess the Portuguese bank failure was pretty far down most people's list of "things to worry about." 

All three major indices gave up some ground with the Nasdaq composite taking the hardest hi...



more from Paul

Digital Currencies

Bitcoin Vs Gold - The Infographic

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

While Marc Faber has said "I will never sell my gold," he also noted "I like the idea of Bitcoin," and the battle between the 'alternative currencies' continues. The following infographic provides a succinct illustration of the similarities and differences between gold and bitcoin.

Please include attribution to www.jmbullion.com with this graphic.

...

more from Bitcoin

Pharmboy

Biotechs & Bubbles

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

Well PSW Subscribers....I am still here, barely.  From my last post a few months ago to now, nothing has changed much, but there are a few bargins out there that as investors, should be put on the watch list (again) and if so desired....buy a small amount.

First, the media is on a tear against biotechs/pharma, ripping companies for their drug prices.  Gilead's HepC drug, Sovaldi, is priced at $84K for the 12-week treatment.  Pundits were screaming bloody murder that it was a total rip off, but when one investigates the other drugs out there, and the consequences of not taking Sovaldi vs. another drug combinations, then things become clearer.  For instance, Olysio (JNJ) is about $66,000 for a 12-week treatment, but is approved for fewer types of patients AND...



more from Pharmboy

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...



more from Promotions



FeedTheBull - Top Stock market and Finance Sites



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...

Learn more About Phil >>


As Seen On:




About Ilene:

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.

Market Shadows >>