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Posts Tagged ‘XRT’

Thursday Foolishness – More of the Same with One Trade

Our day is done, how’s yours?  

That’s right, we already did our 3am trade where we caught the dead top of oil (and the dead bottom of the Dollar), where my 2:59 am comment to Members in Chat was:  

 

Dollar at session low of 80.40 at 3am and oil back at yesterday’s high at $103.70 so oil (/CL) makes a nice short below $103.75 here but DANGEROUS pre-market trading as Iran could spout off at any moment and the trading is VERY THIN.  

So that brings us back to the good old Dow (/YM) futures at 12,350 and they are just over that line at 12,351 but that’s the short of the moment as long as the Dollar is over 80.40 .

For the next hour, I did a blow by blow on the oil trade in Member Chat on the way down to $102.70 – a nice $1,000 per contract worm gotten by the early birds, where we took the money and ran ahead of likely morning manipulation back up to $103.50, where we can short it again on inventories (11am).  The Dow slipped to 12,300 and paid a solid $250 per contract as well, paying for over 100 Egg Mcmuffins this morning by itself.  If you want to see how we make decisions along the way down – it’s well worth going over this morning’s comments – there was also some good discussion of other topics this morning, including my pick for the best wide-screen TV.  

We’re still just messing around with hit and run plays, waiting to see how the week pans out and next week we’ll be waiting to see how earnings pan out as well as what we expect will be a pretty major market pullback leading into the 10-year auctions next Wednesday at 1pm.  Clearly the Fed freaked out and jumped in yesterday when TLT hit $118 so we are fairly comfortable with our prediction of a…
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Abercrombie & Fitch Puts Pop As Shares Tumble

www.interactivebrokers.com

Today’s tickers: ANF, XRT & MDVN

ANF - Abercrombie & Fitch Co. – Bearish positioning in Abercrombie & Fitch Co. options this morning suggests the stock, which dropped the most in more than a decade, may continue to unravel in the final months of 2011. Shares in ANF plunged 22.5% to $57.33 after the retailer said sales at its European flagship stores fell last quarter, indicating turmoil in the region is hitting the clothing and accessories seller where it hurts. Abercrombie reports third-quarter earnings ahead of the open on November 16. Options traders positioning for shares in ANF to extend losses in the near term snapped up deep out-of-the-money put options in the November contract. Investors purchased around 675 puts at the Nov. $45 strike for an average premium of $0.11 each, purchased another 730 puts at the Nov. $48 strike at an average premium of $0.28 apiece, and bought around 500 put options for an average premium of $0.38 per contract at the Nov. $50 strike. Bears prepared to profit in the event that shares tumble more than 10.0% off their lowest point today within the next couple of weeks picked up roughly 800 put options at the Nov. $50 strike for an average premium of $0.57 each. Buyers of the Nov. $50 put profit at expiration in the event that ANF’s shares drop 13.8% to breach the breakeven price of $49.43. Finally, call selling at the Nov. $60 strike suggests some investors doubt Abercrombie’s shares will rebound above that level by expiration day. It looks like traders sold some 1,440 calls at that strike to pocket premium of $2.95 per contract. Call sellers keep the full amount of premium received as long as the contracts expire worthless at expiration.

XRT - SPDR S&P Retail ETF – The put ‘fly spread is the largest transaction in options covering the Retail SPDR, for a third straight session. It looks like the same investor responsible for large bearish prints in XRT put options on Tuesday and Wednesday, is today purchasing the Nov. $43/$47/$51 put butterfly spread for an average net premium of $0.64 per contract. The strategist augmented the position, buying 25,000 puts at Nov. $43 and $51 strikes, and selling 50,000 puts at the central Nov. $47 strike, all for a net premium outlay of $0.64 apiece. The aim of the trade is the same, though the breakeven points are slightly different. The spread…
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Private Equity Chatter Drives Bullish Activity In HOT Call Options

www.interactivebrokers.com

Today’s tickers: HOT, QCOM, XRT & GRMN

HOT - Starwood Hotels & Resorts Worldwide Inc. – Call options on the owner and operator of brand-name, upscale, full service hotels, including W®, Westin® and Le Meridien®, are changing hands at a rapid clip this morning. Shares in the hotel and leisure company rallied sharply on Wednesday, rising as much as 7.7% to an intraday high of $52.05 in the first half of the session. HOT calls may be active on renewed private equity takeover chatter, according to flyonthewall.com. Indeed, it does seem many players populating Starwood options today are positioning for the price of the underlying to rally substantially by year end. Trading traffic is heaviest at the Nov. $55 strike, where more than 10,400 calls changed hands against open interest of 1,974 contracts. It looks like most of these call options were purchased for an average premium of $0.60 per contract. Bulls long the calls profit at expiration if shares in Starwood Hotels rally another 6.8% over today’s high of $52.05 to surpass the average breakeven price of $55.60. Call volume is heavy in the December contract, as well. Traders appear to have purchased more than 1,300 calls at the Dec. $55 strike for an average premium of $1.39 each, and picked up another 760 call options up at the Dec. $57.5 strike at an average premium of $0.73 a-pop. Higher-strike call buyers may profit at December expiration in the event that HOT’s shares jump 11.9% to exceed the average breakeven point on the upside at $58.23. Investors have exchanged more than 27,000 option contracts on the stock as of 11:30 am in New York.

QCOM - Qualcomm, Inc. – Large prints in Qualcomm call and put options appear to be the work of an investor putting the strangle-hold on the stock heading into the company’s fourth-quarter earnings report after the close of trading today. The short strangle benefits the trader most if the stock trades within a range of $50.00 and $52.50 at expiration in a couple of weeks. Shares in QCOM rose 2.8% to $51.55 in the first half of the session. It looks like the strangle-strategist sold 10,000 calls at the Nov. $52.5 strike for a premium of $1.70 each, and sold 10,000 puts at the lower Nov. $50 strike at a premium of $1.50 apiece. Premium pocketed on the position amounts to $3.20 per contract. The investor may keep the…
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Put ‘Fly Points To Near-Term Pullback In Retail Sector

www.interactivebrokers.com

Today’s tickers: XRT, JEF, OII & TRGT

XRT - SPDR S&P Retail ETF – Massive prints in XRT put options launched the ETF near the top of our ‘most active by options volume’ market scanner today. The put butterfly spread initiated on the SPDR S&P Retail ETF in the first half of the session yields maximum benefits to its owner in the event that the price of the underlying fund slide more than 8.0% in the next few weeks. Shares in the XRT currently trade 1.9% lower on the session at $51.56 as of 1:10 pm in New York. The bearish transaction on the retail-sector fund involved the purchase of 35,765 puts at the Nov. $51 strike, the sale of 71,530 puts at the Nov. $47 strike, and the purchase of 35,765 puts at the Nov. $43 strike, all for a net premium of $0.53 per contract. The investor responsible for the transaction greatly reduced the cost of positioning for limited bearish movement in the price of XRT shares through expiration. For example, investors looking to buy puts outright at the Nov. $51 strike must currently shell out $1.79 per contract. The put ‘fly spread prepares the trader to profit should shares in the XRT decline 2.1% to breach the upper breakeven price of $50.47. Maximum potential profits of $3.47 per contract are available to the strategist if the price of the underlying fund falls 8.8% to settle at $47.00 at expiration day in a few weeks. The investor risks losing a maximum of $0.53 per contract, or the amount of premium paid to initiate the position, buts stands ready to gain more than six times that amount if the fund slips to $47.00 at expiration. Shares in the XRT opened the October 5, 2011, trading session at $47.00.

JEF - Jefferies Group, Inc. – Bearish options trades on global securities and investment banking firm, Jefferies Group on Monday seem to have paid off handsomely for at least one investor on Tuesday. Shares in JEF dropped 8.8% to $12.09 by midday on the East Coast. It looks like one trader snapped up around 1,000 puts at the Nov. $12 strike yesterday for an average premium of $0.25 apiece. Today, it appears 1,000 of the put options sold for $1.00 each, six minutes into the trading day. If it’s the case that the buyer of the contracts and the seller are one and the same,…
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Options Strategist Sees Halliburton Rebound On The Horizon

www.interactivebrokers.com

Today’s tickers: HAL, AOL, CQB & XRT

HAL - Halliburton Co. – Options activity on Halliburton suggests one strategist seized the opportunity to take a bullish stance on the provider of oil equipment and services this morning on the heels of a 27.5% dip in the price of the underlying during the past three weeks. Shares in Houston, TX-based Halliburton recovered 4.8% of their value thus far in the session to trade at $44.46 as of 11:45 am ET. It looks like the options player is positioned for limited, albeit potentially substantial, bullish movement in the price of the underlying through September expiration. The investor initiated a ratio call spread, buying 5,000 calls at the September $50 strike for a premium of $1.21 each, and selling 10,000 calls up at the September $55 strike at a premium of $0.425 apiece. Net premium paid to initiate the spread amounts to $0.36 per contract, thus preparing the trader to profit should shares in HAL rally another 13.3% over the current price of $44.46 to surpass the effective breakeven price of $50.36 by expiration next month. Maximum potential profits of $4.46 per contract pad the investor’s wallet in the event that Halliburton’s shares surge 23.7% to settle at $55.00 at September expiration. HAL’s shares reached a 52-week high of $57.77 on July 25 before the market meltdown pulled the price of oil and oil and gas companies down with it.

AOL - AOL, Inc. – U.S. stocks are rallying ahead of the FOMC statement this afternoon, recovering somewhat from Monday’s harrowing selloff, but investors in global web services provider AOL suffered more pain today as shares in the name failed to join in the broad market gain. AOL’s shares plunged 22.0% today to $11.75, the lowest traded price since the company’s 2009 spinoff from…
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Two Trillion Dollar Tuesday – Still No Deal!

Hey buddy – would you like to buy a rally?  

For just $2,000,000,000,000 I can give you a 2% pop on the S&P, what do you say?  Am I talking about QE3?  No, QE3 would be cheap compared to the gang-rape that the Dollar is enduring this week at the hands of the Europeans, the Australians, Canadians, the Swiss (all-time high today) and the Japanese – who have been taking their turns pushing our beloved dollar down to the ground and having their way with it.  Not a pretty picture?  How about picturing the loss of 2% of your net worth in 5 days?  

That’s where we are this morning as $2Tn of US wealth has been extracted this week (via political dithering over our debt ceiling) and shipped overseas in the form of relative buying power for or foreign friends while our stock indexes and commodities "rally" – which is to say they re-price higher to reflect the  lower buying power of the currency they are priced in – the ever-declining green-back.  

As you can see from the above charts, which are our major indexes and oil adjusted for the Dollar – we’re critically close to failing our 20-day moving averages for the first time since early June, when the markets went into free-fall – also on the heels of an end-of-month run-up that took the S&P from 1,311 to 1,345.  1,345 just so happens to be where we topped out last week and where we topped out yesterday and where we popped to on the futures early this morning (3am, of course) as the Dollar was shoved a full percent lower in overnight trading.  

[Futures Trading, U.S., Composition by Type of Futures Contract, 1970 to 2004]We were all over this, of course, and I sent out a 3:55 am Alert to Members saying:

Dollar bottomed out at 73.69 and that should be it for our 3am "rally" with the RUT (/TF) at 835.6 and S&P (/ES) at 1,340, Dow (/YM) at 12,600 and Nas (/NQ) at 2,435 – all make good shorts here as long as the Dollar goes no lower (and I’ve already started the morning post with a chart that shows how dangerous this is getting).  

We rode that puppy hard – all the way down to RUT 830 at 5:30 (up $560 per contract), S&P 1,331 ($450 per contract), Dow 12,530 ($350…
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Bears Snap Up TD Ameritrade Put Options

www.interactivebrokers.com

Today’s tickers: AMTD, XRT, BTU & NG

AMTD - TD Ameritrade Holding Corp. – Put options on TD Ameritrade are popular on the final trading session of the week, with shares in the financial services company trading 0.85% lower on the day at $18.76. Investors may be scooping up puts on the largest U.S. online trading firm following comments from the company’s chief executive regarding concerns that the slower pace of client trading activity in the context of a more uncertain economic climate may endure through the summer months. In-the-money put options in the August contract, which expire after TD Ameritrade reports third-quarter earnings on July 19, are drawing the most trading traffic today. It looks like investors purchased around 2,175 puts at the August $21 strike for an average premium of $2.77 each. Bears traded more than 3,400 puts at the lower August $20 strike on previously existing open interest of just 381 contracts. Roughly 3,000 of the lower-strike puts were picked up for an average premium of $1.82 a-pop. Investors long the August $20 strike puts make money in the event that AMTD’s shares fall another 3.1% to breach the average breakeven point on the downside at $18.18 by expiration day in August. Greater demand for TD Ameritrade put options helped raise the stock’s overall reading of options implied volatility 12.4% to 31.77% as of 1:00pm in New York.

XRT - SPDR S&P Retail ETF – A large ratio put spread initiated on the retail ETF suggests one big options strategist is positioning for substantial, albeit limited, bearish movement in the price of the underlying fund through July expiration. Shares in the XRT, an exchange-traded fund designed to mimic the performance of the S&P Retail Select Industry Index, dropped 2.4% to an intraday low of $49.15 today. The trader…
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Bulls Prep for Continued Run-Up in Sprint

www.interactivebrokers.com

 

Today’s tickers: S, SMH, AEM & XRT

S - Sprint Nextel Corp. – Shares in the third-largest U.S. mobile provider hit a new 2-year high today, rising as much as 5.9% earlier in the session to $5.90. The communications company’s share price took a big hit after AT&T and T-Mobile announced plans to merge back in March, but the stock has sky-rocketed in the two months since then, gaining 41.5% off its post-deal announcement low of $4.17. Perhaps shares were helped higher on news Leap Wireless International joined “team Sprint” in opposing the $39 billion acquisition of T-Mobile by AT&T. Shares in Sprint Nextel Corp. may also be higher ahead of the Thursday release of Google’s mobile-payment service, which will operate on Sprint’s phones. Investors positioning for the uptrend to continue over the long term initiated bullish plays in the November contract. It looks like traders are employing ratio call spreads, buying roughly 2,500 calls at the November $7.0 strike for an average premium of $0.31 each, and selling around 5,000 calls up at the higher November $8.0 strike at an average premium of $0.14 apiece. Net premium required on average to establish the trade amounts to just $0.03 per contract. Ratio call spreaders stand prepared to make money in the event that Sprint’s shares surge 19.2% over today’s high of $5.90 to surpass the average breakeven price of $7.03 by expiration day in November. Maximum potential profits of $0.97 per contract are available on the transaction should the price of the underlying stock jump 35.6% to settle at $8.00 at expiration. Sprint Nextel Corp. shares last traded above $7.03 back in September 2008. The sale of twice as many of the higher-strike calls substantially lowered the price at which call spreaders break even, but also ups the amount of risk undertaken on the position. The uncovered short calls may result in losses in the event that shares spike above the upper breakeven price of $8.97 at expiration in November. Options implied volatility…
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Bearish Options Player Fashions Put Butterfly Spread on Retail SPDR ETF

www.interactivebrokers.com

Today’s tickers: XRT, TSN, CVS & AXL

XRT - SPDR S&P Retail ETF – A large bearish put butterfly spread on the retail ETF this afternoon suggests one options strategist is positioning for a pullback in the price of the underlying ahead of May expiration. Shares in the XRT, an exchange-traded fund that tracks the performance of the S&P Select Industry Index, are down 0.20% to stand at $51.87 as of 12:30pm in New York. The pessimistic player traded a total of 80,000 put options on the fund, driving most of the volume generated on the XRT thus far in the session. It looks like the trader picked up 20,000 puts at the May $47 strike at a premium of $0.37 each, sold 40,000 puts at the May $49 strike for a premium of $0.67 apiece, and purchased 20,000 May $51 strike puts at a premium of $1.27 a-pop. The net cost of establishing the put ‘fly amounts to $0.30 per contract and positions the retail-bear to make money in the event that shares in the ETF fall another 2.3% from the current price of $51.87, to breach the upper breakeven price of $50.70 by May expiration day. Maximum potential profits of $1.70 per contract are available to the investor should shares in the fund fall 5.5% to settle at $49.00 at expiration. Enacting this strategy significantly reduces the overall cost of taking a bearish stance on the retail sector, as opposed to buying the May $51 strike puts outright or purchasing a debit put spread, for example. Additionally, the put ‘fly requires relatively smaller downside moves in XRT shares before the position to breaks even than the aforementioned strategies.

TSN - Tyson Foods, Inc. – Investors lunched on Tyson call options today with shares in the meat manufacturer rising as…
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Retail Bears Abound

www.interactivebrokers.com

Today’s tickers: XRT, IMAX, ADSK & OI

XRT - SPDR S&P Retail ETF – Options traders are positioning for shares in the Retail ETF to fall substantially in the coming months. Massive bearish bets popped up on the XRT in the first half of the trading session with shares slipping further from last week’s new highs. The familiar outline of a put butterfly spread unfurled in the March contract, but was preceded by a large debit put spread initiated in the April contract within the first 15 minutes of trading. Pessimistic players are perhaps speculating that consumers, who now face heftier prices at the pump, are likely to tighten their grip on discretionary dollars going forward. Shares in the XRT, an exchange-traded fund designed to track the performance of the S&P Retail Select Industry Index, are currently down 2.4% at $48.02 as of 12:00pm in New York. In the past week shares in the ETF have pulled back 5.1% from an all-time high of $50.61 last Wednesday. One big put player is well-positioned to benefit from additional weakness in XRT shares in the near term. The investor purchased 20,000 puts at each of the March $46 and March $42 strikes, and sold 40,000 puts at the central March $44 strike, all for a net premium of $0.22 per contract. The net cost of the pessimistic play pales in comparison to the $1.78 per contract in maximum potential profits the investor enjoys if shares in the ETF drop to $44.00 ahead of March expiration. Meanwhile, the buyer of a 17,000-lot April $44/$47 put spread for a net premium of $0.57 per contract could walk away with up to $2.43 per contract in profits if shares in the fund slip beneath $44.00 by April expiration. Options implied volatility on the Retail SPDR has been on the rise throughout the trading session, and currently stands 12.6% higher on the session at 27.35% in early afternoon trade.…
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Chart School

Best Stock Market Indicator Ever: Weekend Update

Courtesy of Doug Short.

The $OEXA200R (the percentage of S&P 100 stocks above their 200 DMA) is a technical indicator available on StockCharts.com that can be used to forecast conservative entry and exit points for the stock market.

The OEXA is used to find the "sweet spot" time period in the market when you have the best chance of making money. See Is This the Best Stock Market Indicator Ever? for a discussion of this technical tool.

The chart below is current through the February 3rd close.


After a major S&P correction, the conditions for safe re-entry into the market are when:

   a) $OEXA200R rises above 65%. And two of the following three...

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Phil's Favorites

Violent Protests in Greece; 6 Cabinet Members Resign

Violent Protests in Greece; 6 Cabinet Members Resign; LAOS leader "I Would Rather Starve Than be Under German Jackboot"; Controversy Over Missing Paragraphs

Courtesy of Mish

Imagine you are asked to sign a document but three pages were missing. Further imagine the documents you were asked to sign were written in English but you only speak Greek. Would you sign?

That is exactly the predicament Greek officials were placed in by the Troika. Here is the story sent to me by Demetri Kofinas at Capital Account.

Hello Mish

George Karatzaferis leader of LOAS political party gave a speech today addressing why he refused to sign this latest agreement. In his speech, he said that he a...

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Sabrient

Sabrient Risers - 2/11/2012

Top 5 RisersStockRatingAnalysisICABUYThe projected value for Empresas ICA is still rising quickly even though past earnings have already improved significantly.XBUYThe projected value for US Steel is still rising quickly even though past earnings have already improved significantly.FEICBUYProjected value continues to rise for FEI while long term increases in earnings growth are also becoming more widely expected.ASBCBUYMany analysts are expecting higher than previously expected long term growth from Associated Bancorp, and its near-term earnings outlook is also improving....

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Zero Hedge

Ten Minutes With Italy's Mario Monti

Courtesy of ZeroHedge. View original post here.

Submitted by CrownThomas.

Italy's Prime Minister (and self appointed economy minister) shot over to CNBC after his meeting with President Obama this afternoon to discuss how well everything looks for Italy since he was elected took over.

Notable Comments:

  • Italian banks are "vulnerable" but have recapitalized themselves (rather, the ECB has given them money)
  • He had a good meeting with Obama, and Obama is supportive (he's careful to...


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Insider Scoop

Benzinga's M&A Chatter for Friday February 10, 2012

Courtesy of Benzinga.

The following are the M&A deals, rumors and chatter circulating on Wall Street for Friday February 10, 2012:

Actuant Acquires Jeyco Pty

The Deal:
Actuant (NYSE: ATU) announced Friday that it has acquired Jeyco Pty Ltd (“Jeyco”). Headquartered near Perth, Australia, Jeyco designs and provides specialized mooring, rigging and towing systems and services to the offshore oil & gas industry in Australia and other international markets. Additionally, its highly engineered products are used in a variety of applications for other markets including cyclone mooring and marine, defense and mining tow systems. Jeyco generates annual revenues of approximately $20 million.

Actuant shares closed at $27.33 Friday, a loss of 0.18% on average volume.

...

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Market Montage

And Still Not a Single 1% Down Day in 2012

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

A little flurry of buying in the closing 5 minutes tacked on 2 S&P points and took the major indexes off the lows.  Only the Russell 2000 finished with a greater than 1% loss (1.4%) as it has been relatively weak versus the senior indexes for the past few sessions.   While today was the "worst day of the year" – it was quite a low bar as the previous biggest loss on the S&P 500 was -0.57%.

The S&P 500 held well above the 10 day moving average (didn't even really touch it) and did not even attempt to fill the gap from last Friday's employment report.  The teflon market rolls on for now.  Specul...



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ETF Selector

ETFs Skid On Greece (VGK, EWG, FXE, DIA, SPY)

Courtesy of John Nyaradi.

Greece was “saved” for less than 24 hours but now major ETFs around the world skid into the weekend on Greek fears

After wangling for a week or more, Greek took their new deal to the European Ministers meeting, only to have it promptly rejected and so as we go into the weekend, major global markets and ETFs have again hit the skids on Greece.

After two years of wangling, the European zone is demanding yet more and deeper cuts for Greece to qualify for the next round of bailout loans that will keep the country from going bankrupt on March 20th.

Major European and United States ETF responded negatively to the new developments:

SPDR Dow Jones Industrial ETF (NYSEARCA:...



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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...

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Option Review

True Religion Falls Apart At The Seams After Earnings

 

Today’s tickers: TRLG, KR & IGT

...



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OpTrader

Swing trading portfolio - week of February 6th, 2012

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

Optrader 

...

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Stock World Weekly

Stock World Weekly: The Relentless Pursuit of Meaningless Metrics

NEW: Elliott and Ilene are available to chat with Members regarding topics presented in SWW, comments are found below each post.

Here's the latest Stock World Weekly, called "The Relentless Pursuit of Meaningless Metrics."  

...

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IRA Strategy/Income Trader

Weekend Virtual Portfolio Update 1/30/2012

Here is a quick update of past trades and our current position. AA Money No trade this week as we wait for AA to settle. Phil remarked last week that AA seemed overvalued. In the meantime, it looks like we might have to roll our Feb 9 calls. Good thing we sold only 5 of them against our position. Last week P&L - 310.00 We lost ground last week, but we still have 11 months to sell premium! FAS Money Very good week for FAS Money as we benefited from the large amount of premium sold the previous week. We covered most of the shorts in advance of the Fed speech, but sold another set of options on Wednesday after the speech - 2 FAS calls that expired worthless on Friday, 2 FAS put that we are still holding and 2 FAZ put that we bought back for a profit on Friday. A late stick comparable to last week's almost gave us problems at the end of the day though! Last week P&L - $4277.00 IWM Money A decent week in this virtual portfo...

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Pharmboy

Biotech Investing for 2012

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

Finding new and exciting Biotech companies that target novel mechanisms is like trying to find a needle in a haystack.  Sure there are many companies working on cutting edge science, but investing in those companies to reap the rewards of their work is a very dangerous game.  More often than not, companies fail because the mechanism does not pan out, the compound(s) do not have pharmacokinetics (get into the body or last very long in the body), or an adverse event happens that knocks years off a development timeline.  In addition, the stock can be manipulated by market makers so investors don't know which way is up.  I approach investing in biotechs as a long term prospect.  I continue to like our current portfolio of biotech companies (join in chat for many of those plays), and we continually add/subtract shares and sell/buy options on ...



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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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