Peter D: great write-up for Short Strangles, Part 1, looking forward to Part 2, particularly the adjustment part.
New member/1st time posting: Thanks Phil and Pharm for the rec on TOS. I've emailed Scott to get myself setup so I hope to hear back soon. As a newbie on PSW for a month now, I've been readin' and readin' and readin'. Gonna start paper-trading for a while. See how I do before putting a single dime into it. New at options but seems like this is the best training and educational platform out there.
I'm a long-time mortgage broker who got too involved with real estate investing. LOVED your article, Phil, on mortgage interest scams. Right on!! Let me know if and how I can contribute back to the community here. Cheers! - Mark
3 for 3! Sold on initial excitement and made a double on USO, 70% on AMZN and 70% on SPY options from Friday.
Thanks and much appreciated for the suggestions.
I've been trading/investing since the early 80's (my dad started me out young). I've had seven figure accounts (in the past) and I've done lots of trading, so I can say that I'm a well seasoned investor. Phil is the real deal. His trades make sense and his strategy is sound. He sees things that others miss and he's one of the best at finding price anomalies. When he makes a mistake, he has an exit strategy already planned. He hedges very well and he has an instict which tells him to go to cash or to be all in.
Boring trading – Phil/ Thanks to PSW, my yearly covered-writes are on pace for 15%. Add the long puts and well over 20%… and I look at it once a day and never lose sleep over it. Actually doing better than my trading account at this point (Thanks, summer 2013)
Anyway, the point is that anyone with enough money would be wise to do the 20% – 40% stuff and do trading as a hobby…
Phil – just wanted to say a sincere thank you for teaching me how to offset, hedge, roll, and not panic. My account is up 10% in the last two weeks, and far from panic, this is becoming great fun. Thanks again,
Opt, I think the hardest thing is being disciplined enough to trade with you. Atleast now when I see something go in the red I know how much I'm going to loose and that I will profit somewhere else and have enough money left at the end of the day to trade again. Thanks for all your hard work! My stress levels are down 75% and I have even made a small profit in the short time I've been here
The strategy you have laid out pretty much mirrors much of my trading activity. I also mix in some momentum plays and "drop dead" bargains that come across my radar. My YTD trading profit is 63%. Back in March when Phil said "unless you think the world is coming to an end, then NOW is the time to start taking positions in Buy/Writes with the VIX so high." I jumped in with both feet - ( thanks, again Phil)
Phil…..You have absolutely NAILED IT! This is not a bull market, nor is it a bear market. It is a Rangeish market, and it's going to stay that way for a long time (the latter is my prediction. I love the word. What I love more is the fact that I've found someone with some investing intelligence greater than mine who can assist me in playing this type of market. Your description today of how it's playing out is right on. I predict some media ‘guru' will steal your word and your description within the next few days and we'll all get to read about what ‘they' discovered about this market. Thanks Phil!
Being a bear is easy (and I am not convinced we are doing all that well on the whole as an economy), but one cannot fight the trend (didn't Phil say that a while ago)? Just cover, make 5-10-15-20% and move on. It really does add up by chipping away. All I can say is I am back to 2007 levels in my account b'f the crash with this run up and some very nice help on this board….so kudos to us (and me!!)…
I have been with this site since the beginning and i have learned more the past 3 years than the previous 10. Information and great commentary are abound. The traders on the site are second to none and my portfolio has benefited greatly.
Man, what a week: Bought C at 1.40, sold half at 1.59 (relatively big position), another quarter at 3.04 just now. Ran SKF down from 270 with one April put, still holding some 115's expiring in a couple days. I'm going to gamble this position like a champion Friday. Bought FAS at all sorts of levels and started cashing out. Long HOV, stock and some nickel calls for fun - Mocha up your buy-out from 5 to 8 and that's 10,900% return for the May-2.50's . Ha!
SPY/Phil, I took a big swing on January 26th following your advice to another member and bought 1615 contracts of Mar 185/190 BCS on SPY that will expire ITM today paying $290,700 on the $500k bet. I thought it might be fun to see what a winning trade looks like. Great call on your part and looking back it seems pretty obvious.
Phil — gotta thank you for your advice this week, and especially today. I took many aspects of your advice this morning, with all of my shorts -- being prepared on the short side, selling into intial excitement, taking the money and running, not being greedy. I also made money on the your /QM and /YM calls. It used to be I would be terrified of weeks like this one. Now, it feels somewhat comfortable, for want of a better word.
Newer member here, but just wanted to say thank you too. I've learned so much and I hope you'll be around for a long time helping us learn along the way.
Phil thanks. You never cease to amaze me with your thoughtful perspective on a myriad of different issues and challenges. It's kind of an embarrassment of riches since I joined this board a few years back. The ride from Dow 9,000 or was it 8,000? up to Dow 15,000 seems hard to believe. I wish I could have it all over again, except with the capital I have now.
Happy Thanksgiving Phil and to your family and associates. Also to all of the other fellow citizens of Phil's Stock World. I am particularly happy and thankful that I clicked on your article in Seeking Alpha a number of years ago. That opened the gate to Phil's Stock World and "being the house". My wallet thanks you as does my peace of mind in trading options, stocks and rarely futures. Your liberal views opened up my views—being a boot strapper (pulled myself out of a poor background) I was a CONSERVATIVE—cynical of others who weren't as driven. Now, I am much less so; you have taught me more than how to make money and manage risk. So, again I give thanks to you and the others of PSW!!
I am an investor, not a trader. The information at Phil's World is top-notch and always relevant. It is great to see your website thriving.
On Optrader's section yesterday he was asked how he works with AAPL as an investment. He replied that he just ‘plays with the covers'. I've got a separate portfolio where I use primarily this technique over the past 6 months. Up 60% The principles involved are stock selection, patience, patience, using covers to protect profits, rolling covers to maximize premium return, and exiting when covers are gone and stock price is high. Sometimes it's hard to remember where you learn to do this stuff, but much of it is from integrating principles I've learned here with thing I already knew. Thanks for the help on this, Phil and others.
Phil - DIA 107 Calls. As suggested I am taking the money and running to home depot for some shelter supplies! This is the grand finale of several successful trades from you through this roller-coster and as you have further suggested it is time for me to sit back and relax in cash. May even be able to talk my wife into the premium membership after these intelligent trades in a stupid market.
Don't expect to get rich quick here, but you can get easy 30 - 50 % per year, just by buying good stocks at discount (as we often discuss), selling monthly premiums of calls and puts.
Phil, I don't know how I can thank you enough for your guidance this past week. I'm up significantly in my portfolio and I've never been so relaxed watching the market panic. Thanks once again for being here for us.
Phil I have been applying your arsenal (matresses, Edz plays, Ugl verticals etc.) to my gold holdings . So a big thank you for "teaching me how to fish" rather than just giving me the fish...
Speaking of the "Man Who Planted Trees", it really works. I bought BTU back in March at $49.87. I practically bought it at the tippy top. However, I soon afterward found this site, started learning Phil's methodology(and those in the strategy section) and began selling calls/puts regularly against my bad position. As of yesterday, I still own the original 100 shares, but have brought my basis down by over $11.00. Couldn't be happier, what started out as a really bad entry, I have managed to work down to a good basis. Had I not watched that video and learned your system, I would sold out of the position, and been kicking myself for making such a bad entry.
PHIL: The most important lesson I have learned is how to hedge using SQQQ, SDS and TZA. A big thanks.
Phil: I loaded up big time yesterday on your suggestion of the AMZN September 75 naked puts. They are up 43%!
Its been a "perfect" month. Every stock I wrote calls against looks like it will be called away next week, every put I wrote will expire worthless. Thanks Phil, now I need some new buy/write candidates, or the new 100K portfolio….
Wishing Phil and all fellow PSW members a Happy, Healthy and Prosperous New Year 2017! Thanks to all of you for your insights and comments which help make me a better investor every day. Wishing everybody the best of luck for 2017
Thanks for the USO directions today. Made it 3 times (up/down/up) for a very nice win.
10/15/2014: Phil…..been travelling more than not but reading and watching you guys every night. This is to say a big thank you. Even though I don't have the time to trade every day now I set up hedges and base long term strategy on PSW. I now it may sound like BS to some readers but my 401k is down a mere 3%. It hardly gets my attention when I open my brokerage portfolio accounts. And that is by using your longer term hedges and strategies. I don't need to be a day trader to take advantage of PSW. At this time in my life when I cant trade every day……. not losing what we've gained moves front and center. It's just a great feeling to watch your brokerage account hold steady in a sea of red. Thanks Teacher.
It is bizarro world for me to go to these things. First, let me confess right from the start, I had a great time. I pose as an outsider and a crank. But when summoned to the court, this jester puts on his bells. I am very, very angry at Treasury, and the administration it serves. But put me at a table with smart, articulate people who are willing to argue but who are otherwise pleasant towards me, and I will like them. One or two of the “senior Treasury officials” had the grace to be a bit creepy in their demeanor. But, cruelly, the rest were lively, thoughtful, and willing to engage as though we were equals. Occasionally, under attack, they expressed hints of frustration in their body language — the indignation of hardworking people unjustly accused. But they kept on in good spirits until their time was up. I like these people, and that renders me untrustworthy. Abstractly, I think some of them should be replaced and perhaps disgraced. But having chatted so cordially, I’m far less likely to take up pitchforks against them. Drawn to the Secretary’s conference room by curiosity, vanity, ambition, and conceit, I’ve been neutered a bit. There’s an irony to that, because some of the people I met with may have been neutered, in precisely the same way and to disastrous effect, by their own meetings and mentorings with the Robert Rubins and Jamie Dimons of the world.
Obviously the headline act was Timothy Geithner. Off the record (or “on deep background”), Geithner is entirely different from the sometimes stiff character who appears on television. He…
[C]onceivably, its failure could have resulted in a 1930’s-style global financial and economic meltdown, with catastrophic implication[s].
From July 2007, AIG’s financial situation deteriorated while so-called “AAA” collateralized debt obligations (CDOs) dropped in value. AIG sold credit default swaps (CDSs) on these CDOs and had to post more collateral, as the prices plummeted.
Goldman Sachs was AIGFP’s (UK-based AIG Financial Products) largest CDS counterparty with around $22.1 billion, or about one-third of the problematic trades. Goldman underwrote some of the CDOs underlying its own CDSs, and also underwrote a large portion of the CDOs against which French banks SocGen, Calyon, Bank of Montreal, and Wachovia bought CDS protection. Goldman provided pricing on these CDOs to SocGen and Calyon. Goldman was a key contributor to AIG’s liquidity strain and the resulting systemic risk. (See “Goldman’s Undisclosed Role in AIG’s Distress”)
By mid September 2008, AIG’s long-term credit rating was downgraded, its stock price plummeted, and AIG couldn’t meet its borrowing needs in the short-term credit markets. According to SIGTARP, “without outside intervention, the company faced bankruptcy, as it simply did not have the cash that was required to provide to AIGFP’s counterparties as collateral.” [P.9] The Federal Reserve Board with Treasury’s encouragement authorized a bailout. 2
The Federal Reserve Bank of New York (FRBNY) extended an $85 billion revolving credit facility, so AIG could make its collateral payments to Goldman and some of its CDO buyers. AIG also met other obligations, such as payments under its securities lending programs owed to Goldman and some of its CDO buyers. (See also: “AIG Discloses Counterparties to CDS, GIA, and Securities Lending Transactions.”)
Goldman “Would Have Realized a Loss”
Fed Chairman Bernanke said AIG’s crisis put the world at risk for a global financial meltdown. Goldman purchased little credit default protection3 against an AIG collapse. Even if Goldman escaped a collateral clawback of the billions it held from AIG4, the
On Monday, I was among a group of eight bloggers who attended a discussion with "senior Treasury officials" in Washington. Several nice accounts of that meeting have already been posted (see roundup below). Here’s mine.
First, I’d like to thank the "senior Treasury officials" for taking the time to meet with us, and for being very gracious hosts. Whatever disagreements one might have, in statistical if not moral terms it was an extreme privilege to sit across a conference table and have a chance to speak with these people. And despite the limitations of the event, I’d rather there be more of this kind of thing than less. So a sincere tip o’the hat to all of our hosts. Thank you for having us.
The second thing I’d like to discuss is corruption. Not, I hasten to add, the corruption of senior Treasury officials, but my own. As a slime mold with a cable modem, it was very flattering to be invited to a meeting at the US Treasury. A tour guide came through with two visitors before the meeting began, and chattily announced that the table I was sitting at had belonged to FDR. It very clearly was not the purpose of the meeting for policymakers to pick our brains. The e-mail invitation we received came from the Treasury’s department of Public Affairs. Treasury’s goal in meeting with us was to inform the public discussion of their past and continuing policies. (Note that I use the word "inform" in the sense outlined in a previous post. It is not about true or false, but about shaping behavior.)
Nevertheless, vanity outshines reason, and I could not help but hope that someone in the bowels of power had read my effluent and decided I should be part of the brain trust. The mere invitation made me more favorably disposed to policymakers. Further, sitting across a table transforms a television talking head into a human being, and cordial conversation with a human being creates a relationship. Most corrupt acts don’t take the form of clearly immoral choices. People fight those. Corruption thrives where there is a tension between institutional and interpersonal ethics. There is "the…
By Mauldin Economics. Originally published at ValueWalk.
Studying history has little practical utility in averting past outcomes. We are doomed to repeat history whether we know it or not.
The value in knowing history is not that one might prevent its recurrence. Its value is that it allows you to identify those things that don’t change and that shape events… no matter the year on the calendar.
That’s why I want to show you four maps that highlight what parts of the world looked like in the past… and that point the way toward what may come in the future.
The map below simplifies a great deal of China’s ancient and imperial history. It shows seven states that fought for control of the historic Chinese heartland during the Warring States period (475–221 BC).
In December 2016, Muddy Waters' Carson Block said China's largest dairy farm operator, Hong-Kong listed China Huishan Dairy Holdings Co., is "worth close to zero" and questioned its profitability in a report. Today, with no catalyst, it suddenly almost is. The stock collapsed over 90% in minutes to a record low.
The sudden crash wiped out about $4.2 billion in market value in the stock, which is a member of the MSCI China Index.
From 2001 to 2011, would you have rather owned the S&P 500 or Gold Miners (Gold Bugs Index/HUI)? If you answered the Gold Bugs index, you would be correct. The left chart below compares the performance of the Gold Bugs Index and the S&P 500. From 2001 to 2011, the Gold Bugs index out performed the S&P 500 by 1,400% (left chart below).
Since 2011, miners have been weaker than the S&P 500 by a large percent. Could the stage be for another period where the mining stocks are going to be stronger than the broad markets again?
Yesterday's selling didn't follow through with additional losses, instead, indices dug in at lows and managed to recover some of yesterday's selloff. The best recovery came from the Semiconductor Index. It gained over 1% as it bounced off its 20-day MA. However, it wasn't enough to stop a 'sell' trigger in the MACD and CCI.
Next is the Nasdaq 100. It staged a recovery, but not from a typical support level. Unfortunately, it has a MACD trigger 'sell' from early March and a new 'sell' trigger between the -DI an...
Taking a "resp-shit" or "potty break" from "in the Toilet Thursday" or "Thursday's in the Loo"... One of our favorite scenes from the 1998 cult classic The Big Lebowski, the ash can scene where Walter Subchak (John Goodman) eulogizes the departed Donnie (Steve Buscemi) with Jeffrey Lebowski (Jeff Bridges) looking on.
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Having rebounded rapidly from the ETF-decision disappointment, Bitcoin suffered another major setback overnight as Chinese regulators are circulating new guidelines that, if enacted, would require exchanges to verify the identity of clients and adhere to banking regulations.
A New York startup called Chainalysis estimated that roughly $2 billion of bitcoin moved out of China in 2016.
As The Wall Street Journal reports, the move to regulate bitcoin exchanges brings assurance that Chinese authorities will tolerate some level of trading, after months of uncertainty. A draft of the guidelines also indicates th...
ISPs will soon be able to sell your most private data without your consent.
As expected, Republicans in Congress have begun the process of rolling back the FCC's broadband privacy rules which prevent excessive surveillance. Arizona Republican Jeff Flake introduced a resolution to scrub the rules, using Congress' powers to invalidate recently-approved federal regulations. Reuters reports that the move has broad support, with 34 other names throwing their weight behind the res...
Phil has a chapter in a newly-released eBook that we think you’ll enjoy.
In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.
This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.
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 PSW Investments, 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.
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