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2024
May 20th, 2016 at 3:41 pm
Futures options/Winston – No thanks! That's risk on top of risk squared. I don't mind playing futures when it's slow but I'm not getting into options on futures. And the CFO of silver is DB, silly. You are just moving from one rigged game to the next and concentrating your risk. It's like standing at a carnival and telling the kids "You'll never win at getting the hoop around the bottle – come over hear and knock down the milk bottles with the bean bags – THAT's the game you can win!"
Japan/Scott – They are 250% of their GDP in debt and interest payments are now taking up 40% of their tax receipts in a declining economy. At the moment, like many 3rd World countries, they are printing money and devaluing their currency to make payment, slipping 10% of their GDP further in debt each year, not including the massive debt that the BOJ is amassing on their books (another 10% of GDP). Zimbabwe's market went up 10,000,000,000% while their currency went to zero – that didn't make it a good investment. So no, the only reason to play the Nikkei bullish is off the support line at 15,900 (until it fails) or into weekends when we feel there would be easing (like this one) but NOT if the Nikkei is high in the channel (like this one) – then it's just a no bet, as most things should be most of the time!
LABU/Airvine – It's not higher, it just reverse split 1:4 so our 10 $5/9 spreads are now 2.5 $20/36 spreads that are $5 in the money. As they left the old options open and they are fairly illiquid, we'll just have to wait for Sept to see where they cash out.
CLF/Yodi – No wonder you don't like them! How could you be down that much and not have doubled or tripled or whatever down at $1.50? When I have a stock that goes that low on me (and, for some reason, I never stopped out) then I'm sure going to take advantage of a move like that. Let's say you had 4,000 shares at $25 – at $5 it's only $20,000 to get to $15 avg on 8,000 and at $2 it's $16,000 to get to a $8.50 average on 16,000 shares and then, at $4, you sell half ($32,000) and then you have 8,000 for $104,000 = $13 for the same loss but twice as many shares and you keep working it. If you aren't willing to do that – you should have stopped out ages ago.
CASH/Stock – Our portfolios are parked in neutral(ish) and about 80% of the portfolio value is in CASH!!! I don't know what else I can say to make it more clear. If you are not GREAT at balancing your portfolio then CASH!!! is much smarter than risking getting your account blown up if China or Japan or Europe fall apart in the next month or two. Take a vacation, get a hobby – CASH!!!! I hope that clarifies things….
QCOM/Albo – The 2018 $45 puts are $4.40 so you can sell those for a net $40.60 entry, which is lower than the bottom. That way, even it goes higher and you buy the $50/60 bull call spread (now $4.40 with a net .30 delta) for $1.50 more after QCOM hits $60 – it's still net $1.50 on a $10 spread that's all in the money. If, on the other hand, QCOM goes lower – you can get a better deal on the bull spread while you worry about the short puts you sold!
SQQQ/JMD – I wasn't happy with the prices so I'm not adding any back (and I think BOJ eases and boost the markets next week). I'm not looking at a spread, I'm looking at buying Sept $20s (now $2.25) or maybe Jan $23s ($3) and then we'll make that money back selling more calls after the short June's expire or, if they go in the money, we'll roll them along to make a new bull call spread. At the moment, the June $21s are 0.60 and the Sept $35s are 0.60 so, if we took the Sept $20s for $2.25 ($1.25 less than we cashed out at) and the June $21s were in the money, we could expect to roll them to much higher short Sept calls and we'd have a great spread and even better, cheaper protection than we started with. If, on the other hand, the market goes up and SQQQ goes down, then the short puts go worthless and our net $1,100 spread would have dropped $14,000 in our pocket less the $1,100 and less the Sept $20 calls ($9,000) would be a net $4,000 credit on 40 naked long SDS Sept $20s and the short AAPL puts so better than free insurance after only one roll. THAT is why I cashed out at $3.50 – I'm looking ahead to our next moves and have no fear of the adjustments.
Futures/Selozi – Welcome (I'm guessing). If you mean the S&P (/ES) and Nasdaq (/NQ) Futures, then see above at 10:37, where I said:
Then, at 11:48, I noted:
And, at 1:47, I said:
It's Friday, so it's a silly day to play – especially with options expiring so it's the kind of thing only the real gambling addicts are doing (I'm not). If you don't have a lot of experience playing and don't take quick profits off the table – I would just practice paper trading until you get the hang of it (see our New Member's Guide).
LOL Cordoor – That is both a great explanation and a great example of why I don't play with those options. If we talked about those – we'd need 18-hour sessions to go over all the details!
Good job taking the non-greedy profits Rexx! No to /NG – I'm super-happy with our gains and flat into the weekend.
WMT/Gbase – Why? Because I preferred the risk/reward of the $5.50 spread where our break-even is $59.50 to $73 in September to trying to thread the needle in closer months for less money. WMT is testing $70 now and will likely settle around $67.50 but maybe $72.50 first and why should I put myself in a position where I have to adjust to WMT bouncing around in a new range with only a razor-thin margin of error?