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Thrilling Thursday – California Hikes Wages 25%, Saves US Economy!

California is raising the Minimum Wage to $10 an hour!

Unfortunately, not until 2016 but this is exactly what we need to really move the economy forward so first break in the dam, thank goodness.  Still, it's a 25% increase over 2 years, not bad and not a bad reason to buy gold and silver (yesterday's play on SLW is a good start) as California, no matter how wacky you think they are, usually leads the nation in necessary reforms and this is one that's been a long time coming.  See "Inflation Nation", where I laid out the bull case for inflation way back in 2008.  

As you can see from the chart, the .25 an hour your Grandfather earned in 1938 really did suck but, by 1968, I remember my 10-year older brothers did quite well for themselves earning $1.60 an hour, which gave them plenty of money to go on dates, buy clothes my parents didn't approve of and get their own muscle cars (my first car was my older brother's '68 Barracuda).  

Even I, at 10-years old in 1973, was able to make $20 a week from my paper route and, based on this chart, that was like $132 today and I remember there was a big road sign near my house that told me a new VW Beetle was $1,999 and that, at the time, was my goal to save up for (with whatever I had left from my comic purchases, of course).  

$132 is what a modern-day adult makes working 18 hours at minimum wage – and my money was tax-free (or, at least no one asked me for any at the time)!   There's something terribly, terribly wrong with that and if you think that the average person in the United States of America has the same opportunities as you did when you started out in life making an inflation-adjusted 30% LESS than you did in your first job – you are deluding yourself. 

Let's extrapolate that $132 and call it $300 a week and say it should be $450 a week instead ($11.25/hour).  What's the difference?  Well, $15,600 a year is the poverty line – that's where we keep our minimum wage workers now.  Assuming they continue to live at the poverty line (like most of us did as teens – other than the free home from our parents) they could save that extra $150 a week and that's $7,800 a year and $7,800 invested at just 4% (20-year notes) over 20 years adding $7,800 each year (minimum wage with no inflation, no raises) is – $258,650.53.

That's the median price of a house!  That means a person, living modestly with a LIVING WAGE (not the crap we pay now) could reasonably be expected, between the ages of 16 and 36, to save up enough money, not just for a mortgage, but for a whole home bought with CASH!  Who could possibly be against that? 

Well, bankers, for one thing.  They would HATE it if everybody went around just buying homes for cash.  How do they make money on that?  When you buy a house for $250,000 and put $50,000 down, at 5% your mortgage is $1,073.64 per month and, over the course of 30 years, you end up paying $386,511.57 on your $200,000 mortgage – $186,511.57 in interest paid to the bank.  And, don't forget, that extra $186,511.57 you pay to the bank is $186,511.57 you can't save for retirement – it's the grift that keeps on taking!!!  

Essentially, the system we have now, that deprives people of the ability to save early in life, creates a cycle of Wage Slavery, where we are constantly getting more and more in debt to banks and credit-card companies – not to buy extravagances – but to buy necessities like homes, cars, medical care, etc.  

It's no accident that this happens to people – the system is designed that way!  Amzazingly though, we not only force our citizens into lives of wage slavery but we also villify them for not being able to make ends make – what a bunch of amoral, sadistic bastards we are – GO CAPITALISM!  

You may watch Django Unchained and cluck your tongue at the "evil" plantation owner but what do you think we're doing when we vote for a political and economic system that forces 40% of our citizens to live below the poverty line.  

Is there "nothing you can do about it" or is it just easier to pretend that they "did it to themselves" by being lazy or stupid or "not wanting to work hard enough."  

Our GDP is stuck in the mud (2.5% growth in the Q2 revised forecast today) because WAGES are stuck in the mud (not profits – wages) because WAGES, not profits, drive the economy.  When a company that employs 2M people, like WMT, makes another $5.6Bn (20% of pre-tax income) they hire a dozen accountants to figure out how to hide the money overseas and avoid paying taxes and pretty much none of it goes back into the economy.  When you pay the 2M WMT workers $2,800 a year more instead – as calculated above – you begin to CHANGE THEIR LIVES!

That money then flows back through the economy (a lot even goes back to Wal-Mart in the form of more sales) and trickles UP to the businesses that earn it anyway – it just has the added benefit of making a few million people's lives better along the way as WMT's 2M workers have another $233 month to spend or save.  

$233 a month saved over 40 years at 5% puts $321,311.40 in a Wal-Mart workers retirement account.  That makes them far less likely to be a burden as they get older and again, let's them afford the finer things in life like a home or a college education without signing their lives away and becoming permanently enslaved to the Banksters.

THE BANKERS DO NOT WANT THIS – they will do ANYTHING to stop it because your debt is what they live on.  JP Morgan (JPM) has already been fined $5Bn for various forms of financial misconduct and is staring down the barrel of anothe $6Bn and those are JUST THE FINES for the things they got caught doing.  These people are not your friends – they are criminals!  This money was stolen from the American people and only SOME is finding it's way back:

  • Sept. 19, 2013 — $920 million – In settlements with the OCC, the SEC, the Fed and the U.K. Financial Conduct Authority, J.P. Morgan agreed to pay a total of $920 million to settle all claims about its management and oversight of traders involved in the London Whale debacle. The bank also admitted wrongdoing in the matter, a trade that cost the bank more than $6 billion.
  • Sept. 19. — $389 million – The bank paid $80 million in fines and refunded $309 million to credit-card customers to settle regulators’ charges that it harmed consumers by allegedly making errors in hundreds of thousands of debt-collection lawsuits and leading more than two million credit-card customers to buy services they didn’t want.
  • July 2013 — $410 million – FERC alleged J.P. Morgan Ventures Energy Corp. traders gamed rules that help set the cost of electricity in California and the Midwest with 12 manipulative trading schemes starting in 2010. The DOJ is now investigating the claims. The $410 million included a $285 million fine and the bank agreed to give back $125 million in profits.
  • January 2013 — $1.8 billion – In two separate agreements, the bank contributed $1.8 billion to the nationwide bank settlement on allegations the banks improperly carried out foreclosures during the housing crisis, including employing so-called robo-signers. The bank also agreed to contribute $3.7 billion in aid to troubled homeowners and nearly $540 million in refinancing. The first part was reached in a nationwide settlement in February 2012.
  • November 2012 — $269.9 million – The bank settled with the SEC over the creation and underwriting of mortgage-backed securities.
  • August 2012 — $1.2 billion – The bank disclosed in a filing its share of a broad settlement over interchange allegations against the banks and Visa and Mastercard.

Wow, I use Visa and Mastercard, I have a mortgage, I buy electricity at pumped-up prices, I buy homes at pumped-up prices.  Do you think this doesn't affect you?  Do you think gas would be $3.60 a gallon if not for the rampant manipulation in the energy markets, would typical suburban homes cost 10x a family's income if they weren't gaming the system?

And why do they do it?  TO PUT YOU IN AS MUCH DEBT AS POSSIBLE!  TO MAKE YOU THEIR SLAVE!  So thank God for Jerry Brown and California – may this be the first step of many on the way to taking back our country from these Godless Banksters!  


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  1. Good morning!

  2. Oil Lines

    R3 – 105.24
    R2 – 104.6
    R1 – 103.48
    PP – 102.84
    S1 – 101.72
    S2 – 101.08?
    S3 – 99.96

    Yesterday's high and low – 103.96 / 102.2

  3. stj / oil lines – nice to see S3 back below the century mark

  4. phil,

    morning, as i doubt you will see,  i will also repost in your new column

    looks like tsla is trying to make new highs pre market up thru 185 to 187.  so im trying to get ready

    like to dig down a little deeper on our conv the other day as i trying to figure out the best course of action.

    after reading your thoughts i rolled the 5 jan 5 125 call to the 10x 200's and rolled 5 x 95 to 165 puts. (scaled)

    so for jan 5 i have the

    30 bcs 140-180. protecting

    10 sht 150's 

    10 sht 200's

    as i read some of your other stuff and your thoughts on trying to keep from moving out the jan 14 position and hopefully not need to stretch it out also to jan 5, i thought i would approach it as two trades w/in one stk  i. e. the jan 4 and the jan 5.

    the jan 5 seems to be ok with the rolls and addt put per above. 

    now the jan 4 calls. i sold some 5 jan 160 puts per our conv vs the jan 5's to try to keep the separation.

    so the jan 4 position is sht 20 jan 165 calls and 5 sht 160 puts at present. 

    my questions are.

    does it make sense to approach as two sep and try to not roll the jan 4 to 5 yet ?

    also looking at my options and would like your thoughts as the best way to go.

    1) roll the 30x sht jan 5  30x 180s in the bcs to 210 selling more puts to cover. approx 12.00 leaving me with 140-210 bcs

    2) creating a new bcs for jan 14 to cover the calls either 10x or 20 the 190-210 for 8.00 and sell more puts to pay ..

    3) roll the sht jan 4 165s to 190 for 13.00 and sell addtl 160s puts to cover. (keeping the jan14 trade and rolling later if it doesnt come in)

    4) create the addtl bcs in 15 to cover i.e. 190-230 about 14.00 and sell puts to cover…

    or any suggestions re  your thoughts as you had said consider more bcs if it goes higher………………in terms of timing and at what levels……190 …over 185 for two days etc…….tks

  5. The day of reckoning will be painful in China. Every day there are stories about some ticking time bomb somewhere:

    Think China’s coal-fired power plants are dirty? You haven’t seen anything yet.

    The country plans to build up to 40 massive projects to convert coal to synthetic natural gas (SNG), a process that would dramatically increase China’s greenhouse emissions, and emit huge volumes of toxins while consuming vast quantities of water, according to a study released today by Duke University.

    Given China’s recent pledge to cut coal consumption, what gives? In short, China has become a voracious consumer of natural gas—the largest in the Asia Pacific region—and is seeking to lessen its dependence on overseas suppliers of liquefied natural gas (LNG). And while the Chinese government wants to clean up urban air pollution that shrouds cities like Beijing in toxic smog, it doesn’t really care about greenhouse gas emissions. Most of the approved SNG projects will be built far from Chinese metropolises.

    So far the government has approved nine SNG projects to produce 37.1 billion cubic meters (1.31 trillion cubic feet) of synthetic natural gas a year. According to Duke University researchers Robert Jackson and Chi­Jen Yang, SNG emits seven times the greenhouse gases of natural gas. If it is burned to generate electricity, the carbon spew is up to 82% greater than a coal-fired power plant. Tailpipe emissions from a SNG-powered vehicle are twice those of a conventional car.

    Bottom line: Over the 40-year life of China’s nine approved SNG plants, their carbon-dioxide (CO2) emissions would hit 21 billion tonnes, compared to three billion tonnes from a “natural” natural gas plant. If China builds the 40 planned SNG plants, their emissions would skyrocket to 110 billion tonnes of greenhouse gases over 40 years. China’s total CO2 emissions in 2011 were 7.7 billion tonnes (pdf).

    It gets worse. Most of the nine approved plants would be built in desert regions and consume more than 200 million tonnes of water a year. To produce a cubic meter of SNG requires 6 to 12 liters (1.6 to 3.2 gallons) of water compared to 0.1 liters to 0.2 liter of water for a cubic meter of natural gas. “The water consumption for SNG production could worsen water shortages in areas already under significant water stress,” states the report, published in the journal Nature Climate Change.

  6. WLT strong.

  7. Good Morning!

  8. FU TSLA and FU NFLX! Trying to help Jabo here…

  9. TSLA/ Phil et al: I am ready to buy some puts on this MFer. What month would you guys go for?

  10. Good morning!

    Oil – We didn't make $103.50 again and the nat gas report at 10:30 should be the nail in the coffin as it has been fairly warm in the Northeast and pool season is ending (lots of nat gas used to heat pools) so another weak look at demand today should make another round of NYMEX bulls give up hope.  Not to mention now we're making nice with Iran!  

    Asia was flat except Japan up 1.2% (MORE FREE MONEY) but that was negated by Shanghai down 2% and check out all the limit downs:

    Top Gainers & Losers In SHCOMP

    Quotes delayed, except where indicated otherwise. All prices in local currency. Time is ET.








    These are the "Free Trade Zone" companies that have popped recently and is really just a normal pullback after the insane run they've had (about 50% up).  

    “The Shanghai free-trade zone concept stocks have gone too far and valuations are too high given their current earnings outlook,” said Wei Wei, an analyst at West China Securities Co. in Shanghai. “When it’s getting closer to when the zone will officially open, it’s time to dump these shares as all good news is priced in.”

    Europe is flattish except Italy, which is plunging 1.4% as they are in turmoil over this Berlusconi nonsense.  

    We're opening well enough but it's all about our levels and, of course, the volume is non-existent and Monday is EOQ so nothing that happens today or tomorrow matter on the whole:

    • Dow 15,384 – now 15,336
    • S&P 1,695 - 1,699
    • Nas 3,718 - 3,781
    • NYSE 9,620 - 9,698 
    • Russell 1,050 - 1,075

    This is good news for the Democratic Minority:  


    Americans Turn on Washington, 68% Say Wrong Track in Poll

    One more on my morning topic – a cautionary tale for you non-savers:

    At 77 He Prepares Burgers Earning in Week His Former Hourly Wage

    Once again we have an opportunity to buy the TZA NEXT WEEKLY $21.50 calls at $1.08 with TZA at $22.36 so just .22 in premium over the next 7 trading sessions is a pretty reasonable .03 daily premium charge.  Stop would be Russell 1,081 but, otherwise, we're just looking for a nice 10-20% on the day trade.  

    On oil (CL) – We'll hope for a move up into the 10:30 nat gas inventories and then a likely short.  

  11. Great, great, great post! Let's hope we will wake up and do something about. 


    P.S. can you make the post viewable to all. I would like to send it to everyone I know. 

  12. Sold some SSYS on this 3-day move.

  13. Phil,

      I'm short 3 NFLX Jan $250 call at $20. I'm looking to roll them out to Jan 2015. Going to the $300 strike would cost be $2 while rolling to a lower strike gives me a credit. What would you recommend?

  14. TSLA/Mill – Well the short $200s aren't a problem (yet) and the short $150s are only a problem if you now believe TSLA will hold $185 through 2015.  I have to tell you it really bothers me that you still don't have short puts when last time (9/20) I suggested selling the 2015 $130 short puts for $22.50 and you asked me why and I said:

    TSLA/Mill – On the short puts – because it helps balance your margin (verify with margin specialist, of course) and because you are so over-committed short that the least of your problems would be having to roll to the 2016 whatever short puts when the short calls are wiped out, right?  Also, you can always stop them out in 1/4 stages (each $10 drop in TSLA) if you REALLY think that's going to be an issue. 

    Those puts are now $21 so no big deal but you have to understand the concept that you are WAY OVER-EXTENDED on this position and the fact that you refuse to hedge against the possibility that you could be wrong and TSLA could keep going up is putting you into this position of having weekly panics.

    $22.50 pays to roll the short $150 calls ($62) to the $200 calls ($40) and there goes your entire problem in a puff of smoke (along with $50,000 in margin exposure) it's also enough to pay for 20 2015 $200/230 bull call spreads at $10 for another $60,000 in upside protection, should you need it.  

    OK, now I'm reading lower and why can't you lay out the entire position instead of an essay that gives it in dribs and drabs?  I think it says you have 4 short Jan (2014) $165 calls and 5 short $160 puts?  So I'd buy back those puts and sell the 2015 $130 puts (maybe 10) and plan to sell more as TSLA goes lower and I'd also cash 10 of the 2015 $140s ($68) and use that money to buy 60 of the 2015 $200/230s IF TSLA goes over $190 (20), $195 (20 more) and $200 (20 more) and then you'd have:

    • 20 2015 $140/180 bull call spreads
    • 60 2015 $200/230 bull call spreads 
    • 10 short 2015 $150 calls
    • 10 short 2015 $180 calls 
    • 10 short 2015 $200 calls
    • 5 short 2014 $165 calls 
    • 10 short 2015 $130 puts  ($21,000) 

    So you have 20 x $40 of upside ($80,000) and 60 x $30 of upside ($180,000) against 35 short calls that average $170ish + $7 for the short puts so call it $175 and that means, at $230 (and assuming no additional rolls or put sales) that you would be owe $55 x 35 = $192,000, which is LESS than you collect on the the long spreads by $68,000 so you have another $20 of headroom before it gets worse ($250). 

    So, if you think TSLA will be over $250 in Jan 2015 – WHY THEY HELL ARE YOU SO SHORT? – and, if not, then you have to be prepared to make the adjustments and rise it out.  

  15. Those TZA Next WEEK $21.50s are down to $1 with TZA at $22.25 and that's too good to pass up – 50 in the STP with a stop at .75.  

  16. To Momo shorters (which includes me) – this guy makes the case, using a TSLA example, that hedge funds lagging the market are chasing momos and will do until EOY, then spit hits the fan.  So perhaps we should prepare for $200 TSLA, $350 NFLX, and $1200 PCLN before we see gravity…

  17. EBAY – Up sharply after announcing acquisition which supposedly enhances PayPal's mobile strategy.

  18. Mrmocha-thanks for sharing that. I agree with his rationale, I am trying to be patient but its tough.  Every time I see a tesla I want to key it, not normal for a mother of two to feel that way!

  19. hedgefunds/MrMocha


    Hedge funds have protection if those positions dive and can also flip the other way in a sec.  I wouldn't bet on Momo's going up to year end.  Think earnings will matter which is a total crap shoot on these stocks.

  20. Phil – Great article.  Very true.

  21. China/StJ – At some point, the World may go to war over issues like this. 

    Boehner time!  Good timing on those TZAs! 

    CZR/DC – I never understand why people get upset when a company exchanges worthless bits of paper for CASH!  Cash is good!  It's much nicer than debt.  Yes, you get diluted but they are paying off $200M of debt in a $2.5Bn company – almost 10% of the company's value offsets the 10% dilution and they'd be foolish not to use the 500% run in the stock since last year to lower the burden.  They're also looking to raise $1.2Bn by offering shares in on-line gaming (new business) and two of their many properties.  They are also selling $1.85Bn in new notes to retire some old ones.  This is what they do – they are like a gigantic REIT with casino revenues as a bonus.   We'll see if the 50 dma holds ($19.50) but, if not, the 200 dma is way back at $14.50 and a fantastic chance to get in if we go there.  

    Our CZR trade from 9/16 was selling the 2015 $7.50 puts for $1.80 for a net $5.70 entry – they are back to $1.90 now and I still like it, of course so keep an eye out if you are thinking of getting in.  We also liked selling 3 Dec $15 puts for $1.35 ($405) to pay for the Vegas seminar – now $2.10 ($630) so wrong way for now but a better deal if new!   And, no, I would not DD until $2.65 to make an even $2 average on 6 ($1,200 collected, $7,800 obiligated). 

    STP – On the road to nowhere now.  I'll review later.  

    TSLA/Newt – Jan $125 puts are $4 and the Jan $105 puts are $2 and the Jan $145 puts are $8 so you make 2x more on the way down than you lose on the way up so figure TSLA going over $200 costs you 50% of $2,000 (5 contracts) but a move down to $165 makes you 100% ($2,000) and a move down to $145 can make you $5,200 (the $165 puts are $10.40) so that's a nice risk/reward ratio through earnings.

    Nat gas with a big build, as expect.  Oil at $103 (/CL) and shortable with tight stops. 

  22. Kudos on the above article Phil, you should run for office! 

  23. Phil – Ebay front month volatility is high, large premium. How about a diagonal, buying the April 50, selling the November 55, for a net of about $5? Or would you play it otherwise?

  24. phil: Thanks.

  25. The difference between Red and red.

    The number 1 and 2 reddest states have gone different ways. Idaho set up an exchange close to lowest rates while Wyoming is fighting like the Cruze missal shot at Obama Care wins the highest prices in the country. This is not a high wage state like New York. My leaders are going to love hearing from me next week.

  26. I knew FREE was a buy! Maybe I should start a penny stock newsletter and spam a million people LOLZ

  27. Sorry if this is a repeat, been away from the board for a couple of weeks:  Any interest in HPQ?  It is entering the "interesting" valuation area for me.

  28. EBAY – actually, buying the 45/55 BCS, at ~$7, and selling the november 55's for $3 seems better to me right now. Waiting for a dip to sell some puts.

  29. BDC—-wow thanks— I bought a mere 1000 sh—are you getting out or letting it ride

  30. JCP / From -5% to +5% today…  Considering yesterday's "news" were old, somebody is buying very cheap today.  UNLESS Phil's $0 target is right on Track!

  31. Savi – half out at 100% gain is my standard, de facto penny stock rule. I have a sell order at 0.93 for half (500 shares). That way the rest rides for free and I go hunting with the fresh cash…

  32. Phil, great post on minimum wage. It would be great to see your postings reaching a wider audience. I know we talked about a website thing but I can't make Vegas this year but maybe you and craigzooka are working on something, I can't remember(?)

  33. phil,

    first tks……sorry for the layout…………what didnt come across was my

    short 20 jan 14 165s calls…………… came across as 4 so right now they are on the front burner……

    also 5 sht jan 14 160 puts which i sold after your note… increase my put exposure……

    in your last note last week you said to hold off for now……..when you get a minute could you tie these into some thoughts……………….

    also for 2015 you only rec 10 short 130 puts total ?…….did i get that right…..

    again sorry for the note…….wont happen again…….i will lay out the positions………tks……..

  34. Wheeee on the Russell – TZA $21.50s are already $1.50 and THAT is the way you make a very quick $2,500 and we're done in the STP as we're back at the 1,070 line that's been holding in the Futures (/TF) and we have plenty of other long-term short plays if we keep going down.    

  35. ugh  missed the TZA call—-

    Phil--my WIN was called—should I get back into it now or wait as you think market is going down—thx

  36. FTSE +0.1%

    Dax -0.1%

    Cac -0.3%

    Ibex +0.4%

    FTSE Mib -1.2%

  37. Actually, have you noticed that our RUT moves are usually about one hour on the nose? 

    TSLA/MrM – Well the World needs counterparties.  

    EBAY/Albo – Paypal is the reason I love them.  Our last play on them was way back in July, when we sold 10 2015 $45 puts for $5.20 for a net $39.80 entry in the Income Portfolio.  Those are already down to $2.88 but the 2016 $45 puts are now $4.85 – not too bad.

    LOL Cturb! 

    Thanks Arivera. 

    Office/Imho – They'd put a bullet in me.  Imagine someone actually getting up there and telling Americans the truth?  There's a reason it never happens…

    EBAY/Deano – I'd sell the 2015 $50 puts for $6.80 and buy the $50/65 bull call spread for $6.60 for a net .20 credit on the $15 spread that's $5 in the money and I'd sell the Oct $55 calls for $2.30 but roll them before earnings (16th) to the Nov $57.50s (now $1.15) after most of the premium is gone.  Then all you have to do (assuming they don't pop $59 on earnings) is keep selling 1/2x per month for $1 or better and you make .50 per long x 28 months for $14 of premium sales which means you are safe to the downside down to $36 and can make up  to about $30 to the upside if EBAY simply makes it to $65 in a non-violent rise over time. 

    This is the kind of trade we'll be doing in the new LTP next month – a slightly aggressive income-producer!  

    FREE/BDC – Very good call!  

    I just got into FREE at 0.47 …. $20M in loan forgiveness can really help a balance sheet. If they stay solvent -> the Moon.

    HPQ/MJJ – I loved them at $12.50 last year but told people to get out at $25, $21.75 is the 200 dma and should hold but, if I were going to get back in, I'd rather see a deeper cut, maybe testing $20, in the very least.  Laptop sales are in the crapper, no one prints anymore, PC sales are very weak so it's all up to the services where they compete with IBM, VMW, EMC in a poor economy.  No thanks…

    JCP/Arivera – I'm guessing $4 is actually where a buyer will step in.  That drops their cap to $1Bn plus the $2.5Bn in debt against 1,100 stores is $3.2M per store and they are generally well-placed as mall anchors and such and you could argue that their inventory is about $2Bn and they do sell $13Bn a year (at a $500M cash-flow loss) so it's a doable project at $4 – though you can see from those numbers why $11 would be out of the question!  

    Wider/BDC – Well, so far, the only person actually editing our Member's Choice Magazine is Deano (that I've seen).   It would be nice if you contributed to that as well.  It's not our big project (more on that this weekend) but it's a start, as is the Philstockworld Magazine – which I hope you all subscribe to and SHARE WITH OTHERS.  If you use Flipboard on your smartphone – you'll find it's a very pleasant way to do a little reading when you're on the road or waiting somewhere…

    TSLA/Mill – Well, I would treat those hyper-aggressive short Jan $165s as a separate problem and, if you ultimately need to roll THE LOSSS (not the whole thing) into more 2014 $200 short calls, you can just ratchet up the spreads and short puts proportionately.  Yes to "only" 10 short puts as we do hope TSLA pulls back next week and offers better sale prices.  If not, we have to cover more anyway but hope springs eternal for 2 more trading days. 

    TZA/Savi – Don't worry, that's 3 days in a row so far.  

    Europe/Kustomz – Blah. 

  38. Momos running again.  Question is:  Can they keep them here or higher until end of 3rd quarter next Monday for window dressing purposes ?

    Phil – Thanks for your thoughts on EBAY.  I'm long in a BCS, but have found it a difficult stock to trade.

  39. Zines/Phil – so how do I get in on editing  Member's Choice Magazine again? I got your email invite but the dang thing didn't work. I may be simply be doing something wrong, and I'd really like to post stuff there, because I see & hear stuff almost daily that is worth sharing.

  40. Why do the mags. reject my user code?

  41. Unbelievable change in sentiment on FB over the past few months.

  42. I took a VERY small stab at EXMCQ …. kinda get the feeling I'm throwing good money after bad here, but I couldn't resist.

  43. Phil // TSLA 
    Thanks for quick reply. I agree with shadow that this may go on with the hedge yahoos until EOY, thats why I have my eyes on the Jan14 short $160s.
    Talking with an angel investor last night, and he went on and on about Tesla, and cracks are starting to show, just simply in the capital expansion model, yet alone shadows comments on 'baking in negative scenarios'
    FYI one of the engineers at GM told me something interesting, apparently the batteried that TSLA uses are something like 28 separate but linked batteries but they are dependant on the entire grid, i.e. if one goes down – the entire battery goes down.
    But thats ok, becasue if ou ton the Mohabe, TSLA says they'll drive a new one out to me as a loner.
    My instincts here ( not a trading platform ) is that they run into the new year and get rejected at $200.
    Thats what I want to prepare for.

    With that in mind – I will watch the $160's and follow your 75% rule, but what you suggest I roll to ?

  44. p.s. yes, I did read through your comments to Mill
    ultimately need to roll THE LOSSS (not the whole thing) into more 2014 $200 short calls

    not exactly sure how this looks or if it applies

  45. Anyone notice TM is within a whisker of their ATH? (~ Feb 2007)

  46. as long as TSLA in printing ATHs almost every day I would stay far away from puts. I'll take a look at 250 maybe.

  47. Does anyone know if Peter has done a new SPX straddle?  I haven't seen him online in a week?

  48. FB is now officially a MOMO.

  49. REPT…why do they not have options on the new IPO biotechs….how long does it take for them to come out?

  50. BRCM/Phil – recently made a new 4G/LTE acquisition. A little weak after some dip buying around some kind of support.. Don't know their story but had a big knock in July.  Something to consider?

  51. Oil quietly making .25 for us. 

  52. DEO – something boring to consider:  Sell the April14 120/110 put spread.for $2.02. 20% return on $1000 margin.

  53. Strangle / Ginbaum – The existing position expires this week.

  54. EBAY/Albo – They go from acting like a MoMo to acting like AAPL every month or two – that's why I usually don't bother.  

    Editing/Albo – I'll send you another.  Unfortunately, Flipboard is not big on Tech Support. 

    Mags/Shadow – I don't even know what a user code is!  

    TSLA/Wombat – It depends on the overall position but I'd stand as firm as you can with Jan $160s into 11/4 earnings where they have to justify their $23Bn (at $190) valuation based on $400M (not even 2%) SALES and STILL NEGATIVE EARNINGS.  I think it would be worse for them if they make $100M because then they'd have a p/e of 230 as opposed to the incalculable negative infinity they have now.  

    Rolling losses/Wombat – Well if you sold the $160s for $15 and TSLA is at $190 and the $160s are currently $39, it sucks because you are down 166% but realistically, if TSLA finishes at $190, you're only down $15 and that's your loss so, rather than try to roll to something for $30, just roll the $15 loss along to, perhaps, the 2015 $305 calls (now $15) and then you can just walk away for the moment and take a breath until you have better facts (because the only reason you'd have to do the roll is because your assumptions between here and there were wrong).  

    TM/BDC – Damn, we had those in the STP last month too!   We had the Oct $125/130 bull call spread and we got bored and killed it.  8(

    BRCM/Scott – At some point we decided we liked QCOM better (better LTE tech) but we used to like them both.  BRCM apparently still supplies the touch-screen controller for iPhone but not the other chips so only a small victory that they haven't been kicked out entirely.  They are moving towards lower-end solutions like car systems and will probably start supplying smart home devices as the need for cheap prior-generation chips is there and that's not a bad business but it's a painful transition from their attempt to be a leading player.  On the whole, $27.50 is a "fair" price for them so I'd sell the 2015 $25 puts for $3.10 (net $21.90) and buy the $20/28 bull call spread for $4.70 for net $1.60 on the $8 spread that's $6.50 in the money and worst case is you own them at the current price and I'd sell 1/2 Jan $30 calls (now .58) when they get to $1 to start whittling down the basis.  

    .25/Bruce – Beats working!  I don't see why they're even holding $102.75, that nat gas was poor and they still are LOADED with over 700M barrels in the front 3 months:

    Click for
    Current Session Prior Day Opt's
    Open High Low Last Time Set Chg Vol Set Op Int
    Nov'13 102.30 103.29 102.20 102.83 12:52
    Sep 26


    0.17 110923 102.66 340830 Call Put
    Dec'13 101.68 102.70 101.60 102.28 12:52
    Sep 26


    0.23 48155 102.05 282975 Call Put
    Jan'14 100.91 101.84 100.78 101.38 12:52
    Sep 26


    0.20 11596 101.18 93011 Call Put
    Feb'14 99.87 100.77 99.87 100.39 12:52
    Sep 26


    0.26 6677 100.13 58611 Call Put

    DEO/Scott – Good company, not cheap, not stable (up and down 10% on a regular basis).  Not sure I'd want to risk $8 to make 2 on these guys.  

  55. DEO – well hey. I just got it at $2.23!


  57. TSLA

    I don't think a number will turn them. It will be an incident and most likely around the battery. So far all the batteries are new, we all know rechargeable batteries work good for a while and lately they seem better. Cell phones had numerous failures because car chargers were fast chargers. 2 changes were made; 1 no fast charging only safe charging 2 power is cut before the battery goes dead, more ore less 5%. Fast charging caused heat and dead batteries take a big surge. At 5% a 3 volt battery will still be over 2.5 volts preventing serious problems with regulators. My feeling is TSLA is pushing use for long distance too far with super chargers and that is where the problem will erupt. Those stations will need a quick battery changer for failures and fire protection. All is well until it isn't. FWIW

  58. Zines/Phil – sorry, that email invite still doesn't work – brown screen (what kind of symbolism are they after, anyway) with the words "Common errors FAQ". Uninformative, consistent with your lousy tech support comment. No hurry on this, AH is fine.

  59. DEO – I've been ruing that I never entered before. always watched and missed. Stop out if under $122.

  60. Phil

    I am asked for a user code and password just like the weekly but it won't accept it. I can red the headlines but not the rest of every story. My attitude towards FB and Google are fixed. I don't need them or want them. The mags need to be completely open to all users.

  61. I love DEO — been holding them in an IRA since 2006 (basis 68) as a dividend payer and they've almost doubled. Awesome.

  62. Phil // Clarity
    Thanks for the explanation. I get the theory, but I wanted to make sure I wasn't missing something.

    Rolling losses/Wombat – Well if you sold the $160s for $15 and TSLA is at $190 and the $160s are currently $39, it sucks because you are down 166% but realistically, if TSLA finishes at $190, you're only down $15 and that's your loss

    If I sold the $160s for $15 and they now $39 – that would be a $24 loss to roll ,yes ?

  63. What will turn TSLA is another secondary.  They do not have sufficient cash to cover the high residuals they have on the cars.  In 2.5 years some of those cars will be turned back in and will most likely not get close to the 65% residual on the open market.  Especially when TSLA has been saying they will have a battery that lasts longer in life and will extend mileage by up to 30% more.  Also they will have cheaper cars on the market which will hurt the residual of the current ones.  I don't think they will keep the same model out now and raise the price anymore.  So 20,000 cars in the first year is already 200 million they have to come up with if they take a 10,000 loss on each one and it might be more but then they have a possible 400 million loss the following year.

  64. bdc // DEO
    wow. impressive chart – wish i would have jumped in 2010.

    rpe // TSLA
    butterflies filled @ +.20 – thanks – very cool

    phil // GMCR
    you gonna run the clock on them ? tempted to cash it in.

    BTW – tweet the Kraft / SBUX lawsuit so we can be done with this ; >

  65. The battery is the company's achilles heel, the problem is most people don't know it (or don't understand battery chemistry like I do, anyway).


    What will probably happen is somewhere one TSLA battery will catch on fire and all of a sudden it'll be the hot* item in the news cycle and the stock will be at 90 within 5 days. (note that you don't have to actually be in the position until after the shocking news event, you'll miss the first 20% but still catch the sell-off just fine). 



  66. Oil Natural Gas

    Some things never change on the left and especially right coasts. There are weather issues like it has be cold in the Rockies that don't effect you. The ground was white when I got up and although melted it is still snowing as I type.

    It is still September, the mountains white for a week, and just this wet is completely out of the norm. It does work out as max pain for me as I am scheduled for a test in Idaho Falls today, 80 miles each way, and high performance summer tires on the car

  67. Batteries/BDC – I love your pun. It really fires me up!

  68. BDC

    Battery fire, could have been them instead of BA. The fire will happen and I think it is any day. Super station goes up in flames. What if the cooling system fails at a fast charger? Why do fans run while charging? We both know better.

  69. Here is food for thought:  today   Nov put selling in RGR and call buying in OLN

  70. What a Twilight Zone market since the Fed announcement, my longs keep dribbling down and my momo shorts keep rocketing up so every day is a red day.  I'm sure a few of you are feeling it as well…

  71. mrm :::::  ;) yep!

  72. mrmocha/Twilight Zone,

    Could not agree more!

  73. mrm,

    add to your statement i feel like i have tsla stockholm syndrome……

  74. I have rebuilt many rechargeable batteries. Common weak pack has dead cells. Some have shorted cells that pass enough current to melt the metal connection, that in only 6 to 18 volt packs. Cars 100s. DC is more dangerous than AC, half the reason it is not in your house.

  75. Much better dip this time, Phil.  $102.50 is falling.  

  76. Fb’s market cap is almost 30B more than MCD. Maybe it’s another WallnStreet’s new darling (crazy MoMo)…..

  77. watch /RB

  78. Thanks for the warning Angel!  

    TSLA/Shadow – I agree, they are just one major recall away from a disaster but, so far, very lucky.  

    Magazine/Snow – Are you trying from an App or PC?   PC is kind of dodgey.  

    Magazine/Shadow – I know you are on a PC – maybe their PC connections don't work right?  

    Rolling/Wombat – Yes but only if you CHOOSE to pay the $9 in premium to do the early roll.  You can be PATIENT and wait for the $9 of additional premium to drain out or, if TSLA hits $100 – they'll still be $40 (unless it does so way early).  

    TSLA/Rustle – Well I see a 2010 Roadster for $69,900 and a 2013 S for $84,900 – too early to see if they are holding up or not but the indication from the $250,000 roadster is – no.  You're right though, the leasing thing is a massive scam:

    Essentially, Musk's plan is this: Tesla and Wells Fargo will offer 10 percent down financing on a Model S, with the down payment offset by a minimum $7,500 tax credit for electric cars. From there, the loan will last for five and a half years, but there's also a lease-like component: after 36 months, you can sell the car back to Tesla if you want to trade it out or move on. Either way, though, you'll be paying $1,199 a month for the $72,400 85-kWh model, or $1,051 a month for the $62,400 60-kWh one. So how does Tesla get that number down to $543, as it prices the 85-kWh plan? It rolls in the savings you'll get from owning an electric car.

    Some of these are eminently reasonable. Tesla counts the amount you'd otherwise spend on gas against the cost of the payment, suggesting that you'd be paying that with a gas-powered car outside the sticker price. In its default calculator, it deducts $284 a month, based on driving 15,000 miles a year with a 19 mpg sedan, paying $5 a gallon for gas. But other savings are much more abstract. By default, for example, it counts $100 in "time savings" from avoiding gas stations — using the somewhat dodgy metric that you'd spend one hour a month refueling and your time is worth $100 an hour. It also assumes buyers will deduct the car's operating costs as business expenses, removing a corresponding $227 a month.

    This is just simply dishonest but investors just look at the headline number and think TSLA will sell 80,000 cars for $500 a month.  Cheaper or just better competition (BMW!) will kill them and, by the time the first 20,000 cars come off lease (2016), there will be Cadillacs, Honda, Nissan, Toyota, Mitsubishis, Mercedes…  Those are just the ones that have already announced!   Also, from BMW:

    Most people will charge their BMW ActiveE through a charging station installed at their home. This provides optimal convenience and would be the equivalent of a gas-powered driver having a gas station right at their own home. As another charging option, new charging stations are continually popping up in neighborhoods across America, in places such as shopping malls, supermarkets, parking garages and train stations. In fact, the U.S. Department of Energy is helping to fund the installation of 25,000 charging stations across the country

    So much for TSLA's advantage of having 20 or 30 charging stations!

    GMCR/Wombat – As long as we're near our worry lines on the indexes – no reason to think GMCR will lead us higher.  As to KFT – I can't start rumors but, if one were to come up, I could report on it! 

    Good point/BDC – Plenty of time to catch that ride when it happens.  

    Holy cow, oil hit $102.25 again and rocketed back up to $103 for the NYMEX close (2:35) – what a crock.  

  79. if you are in should get out of /RB at 2.30 pm

  80. rustle123 – Excellent points on TSLA.  I think that the residual price guarantee is a huge potential liability for the company.  Don't believe that people will be lining up to buy used Teslas.  It's the cache of having an expensive toy that's driving  a lot of their sales.  That's gone in the used car market.  So who are they going to sell them to ?

    Also, I keep coming back to the fact that this is a car manufacturer.  Like any manufacturer, it's harder for them to scale up and continue to grow rapidly than it is for PCLN or NFLX, or even AMZN  for example.  Just a question of time IMO until those realizations hit the market.  In the meanwhile, until that happens, a tough stock to be on the short side of.

  81. Residual on normal cars or certain luxury cars stays strong because newer models are generally more expensive every year.  TSLA is the reverse.  They should have a better car for a cheaper price according to them over the next few years.  If their earnings in Nov are good enough to get the stock over 200, I think they will do at least a 1mm share secondary which will give them the cash they need for the first batch of cars.  Because they will not be making a billion to the bottom line in 3 years.

  82. Zine/Phil – perhaps that's it, I am trying from a PC. I'll give it a shot from the pad & let you know in a bit.

  83. Phil

    About 90% of the world still runs a PC. All you want is the 10% left? I still don't see AAPL in brokers offices or offices in general. One PT clinic, husband and wife.

  84. Just read my daily email from Tom Sosnoff, creator of TOS, he's in the Zone with us:  "In spite of the S&Ps being down almost every day for the past week, it seems like every stock I’m short is higher. Weird, but it’s less strange than you think, although it tends to be a precursor for a bigger move ahead. The rationale is narrowness and the lack of broad leadership distribution."

  85. CSCO – what happened? Oh, I see Chambers spoke on CNBC yesterday…

  86. Stockbern/ OLN           I SOLD some  25 calls this morning.  The stock trades in a $24-22 channel. Love the stock.

  87. Pharm

    ImmunoGen, Inc. (IMGN)

     Any  interest   ?


  88. Snow/Shadow – Sorry to hear that.  Hopefully the road not to bad for the trip.  

    RGR/Stock – Not cheap, why them?  OLN might be a good seasonal but they are consumer discretionary and slightly high end and Carnival had a poor report and retailers are having trouble so not keen on going long without some particular good reason – do you have one?  

    Twilight Zone/MrM – We've seen this plenty of times before, they use the MoMos to prop up the market just before a catastrophic failure.  

    Gasoline/Savi – Wow, they spiked up to $2.69 but failed there.  Oil failed $103 again but too risky to play either one overnight this early in the cycle.  Good call to get out.  

    PC/Shadow – People can read the magazine on a PC (well, not you, apparently) but it seems hard to edit on a PC.  

    Bigger move/MrM – I agree.  

    CSCO/Scott – That guy is poison for the stock!  

  89. Education Videos/Phil - maybe you can do your next video like this one on String Theory!

  90. Phil—-NKE reports today--any trade ideas?—thx

  91. IMGN – love 'em but in bed with Roche.  Only buyer will be Roche.  And sales are in need of a lift.  So, how about selling the Apr14 15 Ps with the purchase of the Apr14 17/20 BCS for net 0.

  92. Actually net 25c credit!!!!

  93. Phil / Pharm - thoughts on BIOS?  Down hard but I read that some hedgies were buying it on this dip.  Am thinking about it for my Income Portfolio, here at $8.80 you can buy 5000 shares and sell 50 APR 7.50 P and C for a 6.50 breakeven and 10K upside.

  94. Almost seems like AAPL is what we should be selling calls against, three pops since August that all ran out of gas quickly.

  95. High debt ratio, Goodwill is way high…..IDN… looks fishy to me.

  96. Pharm – PLX hasn't been this cheap since 2011, seems like time to shovel a lot more in the truck?

  97. Phil / GDX – need help with rolling a position from last December.  Sold five Jan '14 35 strike puts for $2 and now $10.  i thought with August rally GDX might recover (almost hit 32)  but now with latest decline in gold prob should roll out.  to Jan '15?  add in a bull call spread?   Thanks.  

  98. Phil / redfaced :  I sold TSLA Oct.4 puts at $185 [now bid at $7.30, with TSLA at $188.50.  A little slow on the draw, so "hope" has become my default strategy.  Would you fix it, or pray?

  99. Hi Phil. My friend at Tumi told me how to approach them with an idea.  If you're still interested, let me know.

  100. PLX/mrm – locked and loaded.  If I cram any more in….my pockets will be overflowith.

  101. While I'm at it:  Google [aka, the Evil Empire] is out with it's first phone, Moto-X [after buying Motorola].  Any interest?

  102. RGR & OLN   I'm not suggesting an actual trade.  Just saying somebody wants to be long guns (RGR)   and bullets (OLN) via Winchester   

  103. Pharm, I know, but my truck is empty so that's what I'm thinking of filling, just trying to decide how much to risk, a little shell shocked after AVEO, TTNP, and a few other dumps this year…

  104. TSLA / Phil – That roadster had an MSRP between $108K and 128K depending on options. The one at $70K might be a lower model. There is also one for $89K listed. They have BMW 7-Series from 2010 listed for 35K and they sold for well over $80K and I even saw and MB S63 for $63K listed and that was over $100K. I would say that these TSLA cars retain their value OK compared to BMW and MB. 

  105. AVEO…. :(

    PLX…. :)

  106. Phil,

    when you say oil, which index or symbol do I look at? 

  107. LV Update——Caesars is sold out  but Bally's  still has a few rooms available at our low rates --$125/$55 --deadline Oct 5th —Bally's booking code SBPHI3 phone 800-358-8777

  108. LOL Scott!  This is a better basic explanation

    NKE/Savi – No reason to think up or down and the Dow inclusion is too much of a wild-card.  If I had to play, I'd sell the Oct $70s for $2.25 and buy the Jan $70/75s to cover at $1.90 for a .35 credit plus whatever is left on the long spread (assuming NKE fails to break over $70).  

    BIOS/MrM – Nice dip and probably not done going down.  This should have given people a clue:

    I don't know if they are good or bad, not on my radar but this stock is in technical Hell so it would be a stay-away for me, not knowing the business well. 

    AAPL/MrM – Didn't I just call for selling calls the other day?

    GDX/Terra – Wow, I thought we took the money and ran on the last of those in the last pop.  You sold the Jan $35 puts a year ago, GDX fell to $22, came all the way back to $31.35 and between there and now back to $25 you didn't give up?  Not much you can do about them but hope gold pops again.  I'd wait on the roll as, at $24.88, they bottomed out at $22.21 when gold was ridiculously low so not much more down expected but, between now and Jan, you could still get lucky.  Also, 2016s will come out but it's never good to give Ultra-ETFs more time to decay, is it?  

    TSLA/ZZ – Depends if you have a bunch of short calls or not.  If you sold $185 puts for $7.30 you need them to hold $176.70 for 22 days so, if you're not feeling it, why not just kill them (still $8) or, when in doubt – sell half?  

    TUMI/Taihu – Oh sure, that would be fantastic.  I have lots of respect for that company and they don't have to pay me much – I'd be happy with free luggage from them!  

    MotoX/ZZ – Will be interesting to see how they market it.  I think they are pushing it as a sort of fashion accessory.  

    OLN/Stock – Oh, I get it.  I don't think of OLN as guns, just skis…

    TSLA/StJ – I thought it was way more than the Model S?  Retaining value "OK" doesn't cut it with what TSLA is promising.  They are essentially saying their cars will have the highest resale value of any car ever made.  Doesn't matter to the consumer if they are guaranteeing it (but I'd be careful of the fine print) but, as Russell notes, TSLA ends up eating the difference between what they take the car back for vs what it can actually be flipped again for.  

    Oil/Rookie – /CL Futures are what we usually play with intra-day, USO or SCO longer-term (see STP above).  

    Vegas/Savi – When you say totally sold out – do you mean we can't get more rooms even if we want to?  

  109. rookie


  110. MrM- I feel ya, I had TONS of AVEO. Pharm, how much lower do you think they fall? How long until they can go before the board again? I bought 1000-2000 shares of ARNA at 1.40 and sold 1/2 monthly $1.5 calls for .10 until they gradually started to ascend again? Do you think now might be a decent time to do the same thing with Aveo? Buy the stock here and sell the April 2014 2.5$ calls for .35?

  111. Phil / TSLA
    not to belabor the point, but I'm close to understanding your 'brain movements' ( scary )

    Yes but only if you CHOOSE to pay the $9 in premium to do the early roll.

    I need to know how you calculated a $9 burn on the Jan14 short calls, and what would constitute 'an early roll'
    In my notes I have been following your rule of " if 75% of the premium is burned " time to roll
    and how would you know that the option price would still be $40 come Jan if TSLA hits $200

    Sorry for being a pitbull on this – I just really want to understand your mechanics.

  112. jro – this one will be like ARNA, but longer….unfortunately.  Cancer clinical trials are hard to enroll and tedious.  Just keep selling a little premium.

  113. FYI, looks like AAPL has gone down the last three Fridays.  Am trying to buy tomorrow's 480/475 put spread for .50 on a flier but the ask is at .60.

  114. Rolling/Wombat – The $9 in premium is because the $160 call is $39 and TSLA is actually at $190, which is $30 more than TSLA and yes, you are right to strongly consider rolling as the call is only about 25% premium but that's why I hate "rules" – because they give you an excuse not to think!  Do you think TSLA will be over $200 on Jan whatever?  If not, why would you effectively pay $199 to get out of a short position now?  You have to have some sort of conviction in your trades – it's not just mechanics.  Is TSLA currently worth $200 or not?  If not, why give them another year to maybe become worth it unless you ABSOLUTELY have to?  

    AAPL/MrM – That's an interesting play.  Still, EOQ, what if they use it to goose the market?  Fun risk'/reward but I wouldn't take it too seriously.

  115. OK, mrm ur on.  I bought the 485 calls…. ;)

  116. 5d MA is pointing UP…. 8)

  117. thanks Phil ******

  118. AMZN needs some cold water

  119. Phil—LV Update

    The way I understood it (from Sara) we can get more rooms  at the same disc price based on availability —but the 20/20 we contracted for are sold out—and we need to fill a few more rooms at Bally's

  120. AVEO – Yeah, but they are most likely burning through it…, I would play them very conservatively.

  121. TSLA / Phil – I guess it's all in the fine prints but from what I can tell, these 2010 Tesla retain close to 65% of their original value and that's better than BMW and Mercedes who are between 50 and 55%. For some reason, the top Audi are also over 60% but that means that Tesla is actually better than OK, they are pretty much on the top of the range. The fact is, the cars are well made as they should for that price.

    And who can be unhappy about having a great luxury car brand in the US. Of course, that doesn't justify the stock price!

  122. Best short of all time – VXX at 1912 in 2009, now 14, shorting just a few hundred shares on the right day would have meant a cushy early retirement 8)

  123. wheres jabo
    i need an FU OPEN !!

  124. VXX / MrM – They reset it every 18 months or so… That's the premise behind my buying the 2015 20 puts

  125.  this action is crazy with such a low vix….surge, plunge, surge, plunge, now trying to surge
    NIKKEI its just levered inverse yen etf.

  126. VXX / StJ – what's the decay model like?  I haven't watched VXX like I have the fast faders like TZA because it's not leveraged…

  127. CRIS looks good.  I have my portion, but the Dec 5 straddle with the stock is a nice easy play.

  128. CECO – nice covered call play for IRAs.. buy CECO, sell April $3 call for net 2.30.  if called, 30% gain in 3.5 months. will write puts if drops any more to make a full buy/write.

  129. Pharm/Cris~ did you mean own that stock (at least 100) then short $5 Dec straddle? Thx

  130. VXX / MrM – I bought my Jan 15 20 Puts on 12/3/2013 for $6.55. VXX was trading at about $30 then. It's now at $13.61 and the puts are around $9.20 – up about 40% in 10 months. My goal is $10 as they usually reset when they get below $10. and that usually happens every 18 months or so – sometimes sooner. As I said the other day, once my puts get to about $10, I'll cash in and wait for a reset to buy the 2016 20 puts. Rinse and repeat… It's not exciting but I'll take 40% a year for the rest of my life!

  131. VXX / MrM – Keep in mind that you ca of course get a big spike in the VIX wich will of course be bad for VXX which is why I get puts 2 years ahead. On a big spike I would just add to the position.

  132. Excerpted from Bloomberg:  "

    Right now, the risk of deflation is greater than the risk of explosive inflation. And the probability of continuing to undershoot the inflation target is far greater than the probability of overshooting it. Indeed, the Fed's own estimates suggest that it expects to continue undershooting the inflation target for at least three more years.  The deeper problem is that the Fed's target is widely perceived to be asymmetrical. Imagine the response among policy makers if headline inflation were running at 4 percent, and core inflation were at 3 percent. In the colorful words of Chicago Fed President Charlie Evans, they "would be acting as if their hair was on fire." We're experiencing the mirror image — an equivalent undershooting of the inflation target, but without an equivalent policy response."

    With inflation continuing to undershoot the Fed's inflation target, and millions remaining needlessly unemployed, policy makers need to start acting as if their hair were on fire.

  133. BDC / Free !!!!!!!!!!!!!!!!!!!!!!!!!! I i have a dreamm- thanks.
    would you DD ?- lots of volume, might be an interesting ride, right on the 200 DMA

  134. ."

  135. You're welcome Wombat. 

    Nice little stick at the close – no one seems worried about a shut-down.  

    Las Vegas – You guys heard Savi – bring your kiddies, bring the wife -we have a few more rooms to sell!!!!  

    TSLA/StJ – Well made?  Isn't about $40,000 of the car's cost a lithium-ion battery that is not likely to last (and certainly not at a full charge) for the next 3 years?  That's my main problem with it – it's like buying a 3-year-old laptop.  Even if it was the best of the best at the time – experience has taught us that things do fail eventually.   65% is a bit too much of a stretch for a car that may need a $40,000 replacement part.  I'm sure they'll turn around and guarantee that to the resale buyers (and don't the resale buyers begin to chew into the new car business or are they immune to that too?) – the question is how long can they keep juggling before they have to explain the 40,000 dead batteries ($1.6Bn) in their warehouse that they pretended had kept 65% of their value?  I suppose I could be wrong and 90% of their batteries will be fine after 6 years – then it's only going to cost them $160M.  But, of course, then it costs them that EVERY year rolling forward and it expands with their sales and we're still assuming 90% of their batteries never die to keep it down to that price. 

    Deflation/ZZ – Not if we get wage inflation. 

  136. savi – looks like at high-ticked FREE at 0.93. Not a bad trading day and only made one trade!



  137. Battery life study Phil!

    Still more studies needed and TSLA is really making a bet that battery prices will come down with time. However they seem to hold up well so far.

  138. BDC—they gave you the fill at .93 and left me high and dry  :-)     thx again great call 

  139. Savi – I wouldn't worry too much about it, I think this penny stock has some more legs…

  140. Pharm – no concern over PLX being Israeli?

  141. Wombat – with penny stocks I stick very close to the script: sell half at 100% and let the rest ride for FREE*



  142. I'm going to miss being a PSW with Akiko. We both came the last 2 years. Hopefully next year.

  143. bdc / copy that 

  144. it's actually the selling off of big winners that requires real thought. Imagine having low-ticked PCLN at 1.05 in Oct 2002, sold half (probably the next day) at 2.10, but are you still holding the rest at 1,011.61 ten years later!!!!?????? 

  145. Something bad is going on at NDRO — this position probably needs to be killed off. Damn high yield allure!

  146. CRIS/Invest…buy the stock, sell the puts and calls.

    PLX – not worried at all that they are Israeli.  They have manufacturing plants all over the world.

  147. Got it, thx Pharm!

  148. Continuous QE= Consistent higher high of Spx?

  149. Flips/Phil – Phil, I get the same problem on my Nexus android pad – open the invite, click on the link, and it's "have a look at our common errors FAQ".

  150. Researchers Just Hit A New World Record In Solar Cell Efficiency

  151. Nissan granted license to test self-driving cars on Japan’s public roads

  152. 8.4 Million New Yorkers Suddenly Realize New York City A Horrible Place To Live | The Onion – America’s Finest News Source,18003/

  153. GOLDMAN: The Stock Market Is Presenting An Investment Opportunity We Haven’t Seen In At Least 25 Years

  154. US student debt: $1.2 trillion, and rising

  155. Yes, some people will pay you for your news — a really, really small number of people

  156. Google Glass competitor ships 50K units, gets Intel investment, and hints at Apple connection

  157. UK economic recovery is on steady course, growth figures show

  158. China’s wealthiest families score $720 billion in undeclared “gray income”

  159. The Dow has been so streaky that I would have to guess we go up tomorrow. It must be that up days are followed by another up day 70% of the time. I should get these stats and see how we can play that!

  160. Carl Icahn’s Bet On ‘Grand Theft Auto V’ Paying Off As Sales Top $1 Billion

  161. Check out Business by thenewsdesk

  162. I love this column from The Economist:

    An alternative view is that meaningful threats to block a debt-ceiling hike, as opposed to symbolic ones that aren't carried out, have no political colouration or content at all. The threat to actually block the government's borrowing authority is simply a threat to force the government to default on its debts and to crash global bond markets. Neither political party argues that the government should default on its debts and crash global bond markets. In this view, a meaningful threat to block a debt-ceiling hike is simply an arbitrary act of hostage-taking; the message is not "I am very, very conservative", but rather "I am very, very desperate and possibly crazy, so you'd better accede to my demands." A credible threat to carry out any unacceptable action—to put LSD in the water supply, to bring back "Lost" for an eighth season—would work just as well.

    If either party can take advantage of this sort of doomsday threat, it should be clear that neither can. To underline that fact, Mr Obama ought to counter the Republican threat not to raise the debt ceiling, with a threat of his own to veto a raise in the debt ceiling. Republicans may demand the postponement of Obamacare in exchange for a debt-ceiling hike. Mr Obama can demand passage of an immigration-reform bill including a path to citizenship in exchange for a debt-ceiling hike. Will Democrats risk defaulting on America's debt in order to preserve Obamacare? Will Republicans risk defaulting on America's debt in order to block immigration reform? Heck, why not throw in the rest of both parties' agendas: approving Keystone XL, ending the sequester, banning abortion, fully funding Head Start, slashing food stamps, fully funding food stamps, firing Big Bird, taking away everybody's guns? All of this must happen before October 31st, or the House will refuse to pass a debt-ceiling hike, and the president will also veto it!

    Obviously, this idea is ridiculous. For one thing, there's no concrete difference between Mr Obama threatening to veto a debt-ceiling hike and simply refusing to negotiate over it, which is what he's doing now. For another thing, yield curves are already starting to invert just at the prospect of Republican resistance to a debt-ceiling hike; if Mr Obama signaled his willingness to veto one too, all hell could break loose. I mean, the whole idea that Mr Obama would threaten to tank America's credit rating and the global economy in order to achieve his legislative agenda is just nuts. Whereas Republicans, well, you just have to expect them to pull that sort of stunt, because…because why again?

  163. And in any case, the deficit is falling:

    Weigel notes that this has deprived conservative yakkers of one of their favorite applause lines: "You don't hear Republicans lulz-ing at Obama for failing to 'cut the deficit in half in my first four years,' because he basically did this, albeit in four and a half." That's true. It's also true that contrary to Republican orthodoxy, it turns out that raising taxes on the rich does bring in higher revenues and therefore reduces the deficit.

    And that $1.4T was Bush's last budget as the budget for 2009 was passed in 2008.

  164. PSWers/Account Ratios – I thought it would be good to share the various ratios of my accounts to give people an idea of the relationship between options buying power, net liquidating value and cash. I have indexed mine to a net liquidating value of 100 so as not to embarrass myself (i.e. divide your net liquidating value by whatever number to get 100, and then use that number to divide into the other values).

    Net Liq. Value 100

    Option Buying Power 25

    Cash 90

    and I can also see that my YTD P&L is at 11

    I keep a sharp eye on the cash levels and the Option Buying Power. The longer I manage the account I know that the critical thing is to keep the cash balance ticking up. Net Liquidating Value is at the mercy of the markets; cash at least you have some control of and is the fuel to adjust positions. It also pays the bills. Until positions are cashed out, or premium taken in you have diddly squat.

    I used to run option buying power down to low levels, which reduced my room to manoeuvre. Never again.

    I also use to obsess about the YTD P&L, but it is a bit of a false friend. It does not reflect premium that will burn away during the passage of time.

    I am very happy with these ratios, it lets me trade the way I want to, take advantage of opportunities and up until now allowed me to adjust my way out of trouble.

    It would be a great learning experience to find out the ratios of other members and to see how that influences or affects they way they trade.

  165. Good Morning,

    Phil early bird question on WYNN stock yesterday reached 159.74 I have rolled already to the Oct 150c for 4.77 credit the caller is now 10.45 When rolling the caller I chipped in already a 145 Oct putter for  a credit of 2.48. Still even that I think the stock is overpriced things are going up leaving a premium of only .71 cents. One could roll the 150 to Nov 160c for a debit of 4.80 and cover the cost by selling the Nov 155p for 4.35. But very close to a danger line for the putter.

    Doubling the callers leaving you as well with naked callers

    But  as said above the stock is very pricy and could tumble on the next dip.

    Obviously the above play is covered by the Jan 137.5/147.5 bull call spread. Your thoughts pls.

  166. Good morning!

    Futures are giving back yesterday's gains already.  Asia was flattish, Europe down a little bit – no particular reason for it as far as I can see.  

    Dollar 80.50, oil $102.50, gold $1,323 – doesn't look like anything is happening anywhere, including Washington, where that shut-down thing still looms.  

    No Clear Path to Avoid Shutdown as House GOP Stands FirmCongress's rocky path to avoiding a government shutdown became even rougher Thursday, as Speaker John Boehner said the House wouldn't accept the spending plan likely to emerge from the Senate. The Ohio Republican's announcement foreshadows a set of last-minute legislative volleys between the House and Senate to fund federal agencies ahead of a deadline Monday, the final day of the fiscal year. he Senate is expected to pass a bill Friday that would fund the government for the first 1½ months of the new fiscal year. But Senate Democrats plan to restore money for the Affordable Care Act that House Republicans had stripped out, leaving the two chambers in conflict.

    • In the House, GOP representatives won't accept a six-week government spending bill that looks set to pass in the Senate today and so avert a closure on Tuesday. The legislation would add funding for Obamacare, which Republicans want to strip out.
    • GOP members also want a one-year delay for Obamacare in order to raise the $16.7T debt limit by enough to last through to the end of 2014. By October 17, the government will have just $30B left to pay bills, a sum that's expected to last only one or two weeks.
    • Democrats refuse to accept any measures that have strings attached.
    • Markets are getting increasingly nervous, with the cost to insure $10M of U.S. government debt for one year rising six-fold this week to €31,000 ($41,930).

    As US Default Risk Spikes To 5-Month High, Here Is How To Trade The Debt Ceiling Showdown. (graph)

    Meet the new idiots, same as the… actually these idiots might be worse (FT Alphaville)

    K.C. FED PRESIDENT: Delaying The Taper Threatens The Fed's Credibility.

    Majority of Americans Doubt Benefits of Fed Stimulus (Economix)

    The First Cracks Appear In The Insane LBO Craze.

    Behold the follow of CB Tampering:

    Japan Inflation Accelerates to Fastest Since 2008 on EnergyConsumer prices excluding fresh food increased 0.8 percent from a year earlier, the statistics bureau said today in Tokyo. The median forecast of 30 economists surveyed by Bloomberg News was for a gain of 0.7 percent. Stripping out energy and perishables, prices fell 0.1 percent.

    • For inflation to take hold, wages need to start rising, economists say. PM Shinzo Abe "will have to keep up his campaign on companies for wage growth," says Taro Saito.

    So they've accomplished NOTHING except to pop Energy prices, which drove consumer prices further down (as money is diverted to exports that ad nothing to their own economy).  These Central Banksters are destroying the World!

    Goldman's Analyst Index Plunges Most In A Year. (graph)

    Cyprus-Style Wealth Confiscation Is Starting All Over The World.

    Meanwhile, has anyone noticed iTunes now charges $1.29 per song?  I don't buy songs but I just noticed Jackie's bill – AND TAX!  That really sucks…  Good for AAPL but I'm not sure when they bumped it up from $1.10.




    Unit Price


    True Love (feat. Lily Rose Cooper)
    Write a Review Report a Problem




    You Are My Sunshine (Pt. 1)
    Write a Review Report a Problem

    Elizabeth Mitchell



    Write a Review Report a Problem










    And Pink changed her name to P!nk?  That's kind of cool actually…  Maybe I'll become Ph!l  

    And the normal shenanigans:

     Somebody Stole 7 Milliseconds From the Federal Reserve (MoJo

    Some U.S. brokers not policing 'hold' recommendations: regulator. Some securities brokerages are struggling with an industry rule requiring, among other things, policies to make sure that recommendations to hold securities are appropriate for their investors, according to findings this week by Wall Street's industry-funded watchdog. The Financial Industry Regulatory Authority (FINRA) rule, which took effect in July 2012, required that investments recommended by brokerage firms be suitable for investors at all times, and not just when investors buy them. In the past, brokers mainly had to worry only that their "buy" and "sell" recommendations were suitable at the time of sale.

    Eurozone economic confidence rises, consumer sentiment flat

    • Eurozone Economic Sentiment Indicator 96.9 in September vs 95.2 in August and consensus of 96.
    • Business Climate -0.2 vs -0.2 and -0.1.
    • Consumer confidence -14.9 vs -14.9 and -14.5.
    • Industrial confidence -6.7 vs -7.8 and -7.
    • Services sentiment -3.3 vs -5.2 and -4.8. (PR)
    BOE chief Carney rules out more QE for now
    • Bank of England Governor Mark Carney doesn't believe the BOE needs to restart its bond-buying program, due to the improvement in the U.K. economy.
    • "Given the recovery has strengthened and broadened, I don't see a case for quantitative easing and I have not supported it," Carney told the Yorkshire Post regional newspaper. However, the BOE would consider more QE should the economy falter.
    • The pound is +0.1% at $1.6063, although that's down from earlier highs. The FTSE is -0.3%.

    Italy on Verge of Downgrade to Junk; Silvio Berlusconi's Supporters Threaten Mass Resignation from Parliament.

    Report Warns of Chinese Municipal Debt RisksA report by Nomura said Thursday that Chinese municipal debt, a focal point of major concern about the country’s economy, had grown at an alarming 39 percent clip in recent years. The report by Nomura estimated that the financing vehicles used by local governments to raise cash had created debts totaling at least 19 trillion renminbi, or $3.1 trillion, by the end of last year and posed a “major risk to the economy.”

    Chinese industrial profits climb 24%
    • The combined profits of large Chinese industrial firms jumped 24.2% on year in August to 483.17B yuan ($78.94B) as growth accelerated from 11.6% in July.
    • In January-August, earnings climbed 12.8% to 3.5T yuan.
    • Private companies led the way as income increased 16.2%, while that of state-owned firms rose 8%.
    • The profit growth adds to other data indicating that China's economy is improving, although not everybody's convinced.

    Kerry holds one-on-one talks with Iranian foreign minister

    • U.S. Secretary of State John Kerry and Iranian Foreign Minister Mohammad Javad Zarif had a private discussion over Iran's nuclear program yesterday at the U.N. in New York in what was the highest-level official meeting between the countries since before the Islamic Revolution in 1979.
    • Kerry said the talks, which came after wider negotiations between Iran and major international powers, were "constructive." However, he warned that much work was needed to be done, with the U.S. wanting clear proof that Iran was not developing nuclear weapons before sanctions would be eased.
    • Despite the caution, the improved relations helped send oil 0.5% lower to $102.49.

    Dimon-Holder talks make "good progress"

    • Talks between JPMorgan CEO (JPM) Jamie Dimon and U.S. Attorney-General Eric Holder were reportedly "constructive", with "good progress" made. However, the sides are yet to agree on a final deal that would settle many of the numerous investigations into the bank, although not necessarily all of them.
    • Holder would only confirm that talks with JPMorgan representatives took place.
    • The Department of Justice and other agencies want the bank to pay $7B in fines and $4B in mortgage relief, as well as admit wrongdoing. The bank, though, wants to avoid such an acknowledgement, as it could harm its defense against private lawsuits.

    JCPenney Throws CNBC Under The Bus, Says CEO Was "Misquoted".

    Day traders, angels and venture capital: The internet changes everything, including money (GigaOm)

    The idiocy of crowds (Felix)

    A Move Is Afoot to Keep Climate Science Out of Classrooms (Scientific American)

  167. From Bloomberg, Sep 27, 2013, 12:00:01 AM

    A shutdown of the U.S. government
    would reduce fourth-quarter economic growth by as much as 1.4
    percentage points depending on its length, economists say, as
    government workers from park rangers to telephone receptionists
    are furloughed.

    To read the entire article, go to
    Sent from the Bloomberg iPad application. Download the free application at

  168. From Bloomberg, Sep 27, 2013, 4:52:20 AM

    Global warming has slowed since 1998 even though humans spewing ever more greenhouse gases are almost certainly to blame for damaging the atmosphere.

    To read the entire article, go to
    Sent from the Bloomberg iPad application. Download the free application at

  169. From Bloomberg, Sep 26, 2013, 6:00:01 PM

    Even by the lamentable standards of U.S. banking and securities regulators, the settlements unveiled this week with Toronto-Dominion Bank (TD) for its role in a $1.2 billion Florida Ponzi scheme were incredibly lacking.

    To read the entire article, go to
    Sent from the Bloomberg iPad application. Download the free application at

  170. From Bloomberg, Sep 26, 2013, 11:57:42 AM

    Imagine if Congress mandated that an arbitrary number of jail cells be filled with prisoners — regardless of the crime rate. Authorities would be required to incarcerate people, no matter the circumstances or the affront to human rights. That’s basically the state of immigration detention in the U.S.

    To read the entire article, go to
    Sent from the Bloomberg iPad application. Download the free application at

  171. From Bloomberg, Jul 22, 2013, 4:04:28 PM

    As in earlier economic recoveries, in 1933, U.S. production began increasing more quickly than workers could find jobs. A 50 percent increase in industrial output from March to July generated just 14 percent more factory employment. With orders rising, manufacturers commonly extended current employees’ weekly hours instead of rehiring those who had been laid off.

    To read the entire article, go to
    Sent from the Bloomberg iPad application. Download the free application at

  172. From Bloomberg, Sep 25, 2013, 5:43:15 PM

    Exactly what Ted Cruz accomplished with his 21-hour stemwinder from the Senate floor yesterday and today is unclear. What’s not debatable is his central argument against President Barack Obama’s health-care-reform law — that it is “the single biggest job-killer in America.” It’s flat wrong.

    To read the entire article, go to
    Sent from the Bloomberg iPad application. Download the free application at

  173. From Bloomberg, Sep 25, 2013, 4:00:00 PM

    Shiny new iPhones always get the most attention. But it’s iOS 7, the updated version of Apple (AAPL)’s mobile-device operating system, that will have the biggest impact on users.

    To read the entire article, go to
    Sent from the Bloomberg iPad application. Download the free application at

  174. From Bloomberg, Sep 25, 2013, 7:24:05 PM

    The euphoria Apple investors felt when the company finally unveiled a plastic, lower-priced iPhone on Sept. 10 was short-lived. Before the news conference, analysts expected a cheaper device that would create a new class of Apple smartphone customers in China and other emerging markets. But the 5c, with a contract-free price tag starting at $549, was still too expensive.

    To read the entire article, go to
    Sent from the Bloomberg iPad application. Download the free application at

  175. P!nk – I love it. She was one of the more sensible candidates for mayor of Los Angeles in 2005. Instead, we got Tony. ~sigh~

  176. Margin debt/Pharm – That's very scary, usually comes before major corrections.  

    Great point from Economist, StJ – Takes an outside view to clearly see the insanity.  In fact, as I'm writing this, Joe Kernin is saying "isn't this a valid negotiating tactic" in a way that indicates he's no longer sure.  

    Good strategy Winston.  

    WYNN/Yodi – Those guys are through the roof!  I would not sell such a high put as they have no solid support down to $140, in case of misadventure.  I would consider that you have already paid for 1/2 of that roll with your existing short put but also, I would roll to the Nov $155 call ($8.40 with $3.40 of premium), not the $160 ($5.60 with $5.60 of premium) as I still don't believe they justify $160 on earnings (10/21).  If you want to be braver, then I would endorse rolling to 1.3x the $160s with a stop on .3x if WYNN gets over $160 and holds it for a day.  Also, you may want to cash your deep in the money Jan $10 spread that's $8 and roll up to the Jan $155/170 bull call spread at $6.50 as you put $1.50 in your pocket (so less downside risk) and you're still $5 in the money and you make $8.50 more if WYNN goes higher, rather than $2 more on your current position.  


  178. Apparently, everyone wanted to smack him in college.