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  1. phil

    Hedging trades for the Nasdaq:

    They wanted 3 ways to hedge so:

    Nasdaq 100 Futures (/NQU7) are at 5,796 and pay $20 per point per contract, shorting 1 Sept contract protects your portfolio through the summer and you can set a stop over 5,800, where you'd have an $80 loss but a 10% drop in the Nasdaq of 578 points would pay $11,560.  Good to use any time you get nervous.

    Using the Nasdaq ETF (QQQ) you can lock in your gains at $141.22 by buying 10 Jan $147 puts for $9.75 ($9,750) and selling 10 Jan $136 puts for $5.05 ($5,050) for net $4,745 on the $11,000 spread.  That's an upside of $6,255 (131%) if the Nasdaq drops 5 points (3.5%).  As a rule of thumb, we put about 1/3 of our unrealized gains into our hedges to lock them in.  

    The Nasdaq Ultra-Short ETF (SQQQ) is a 3x inverse ETF at $30.36 so a 10% drop in the Nasdaq would move the index up about 30% to $40.  In this case, we would want to take a bull call spread, like 20 Jan $35 calls for $3.25 ($6,500) and sell 20 Jan $40 calls for $2.70 ($5,400) for net $1,100 on the $10,000 spread.  The upside potential here is $8,900 (809%) if the Nasdaq falls 10%.

    In both cases, I like to offset the cost of the hedge with a bullish position on a stock I wouldn't mind buying if it got 10% cheaper.  We already have a bullish position on GILD so let's add to it and sell 5 GILD 2019 $55 puts for $4.90 ($2,450) and that nets us into 500 shares of the stock at just $50.10 ($25,050) if assigned, $14.40 – 22% below the current $64.50 price.  





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Zero Hedge

Surgical Robot "Spirals Out Of Control", Kills Man As Docs Sipped Lattes

Courtesy of ZeroHedge. View original post here.

Authored by Ethan Huff via NaturalNews.com,

In the name of scientific “progress,” Newcastle’s Freeman Hospital in the United Kingdom recently tried to pioneer the use of a surgical robot that it tasked with repairing a patient’s damaged heart valve, only to have the machine go completely bonkers and ultim...



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Phil's Favorites

Weekend Reading: Why This Isn't "THE" Bear Market...Yet

Courtesy of Lance Roberts, RealInvestmentAdvice.com

After two significant corrections during 2018, this has to be the beginning of a “bear market,” right?

It certainly is possible given the headwinds that are starting to weigh on corporate outlooks such as ongoing trade wars, weaker revenue growth, a strong dollar, and higher interest rates. However, despite these concerns, there are three things which suggest the necessary psychological change for a more meaningful “mean reverting” event has yet to occur.

Interest Rates

During previous market declines, where “fear” was a prevalent factor among investors, money rotated from “risk” to “safety” which pushed Treasury bond prices higher and rate...



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Kimble Charting Solutions

King Dollar Creating A Topping Pattern This Week?

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

King Dollar has spent the majority of the past 7-years inside of rising channel (1), as it’s created a series of higher lows and higher highs.

The 2018 rally has it kissing the underside of potential resistance this week at (2), where it could be creating a bearish reversal pattern. This one week action has NOT changed the upward trend in King Dollar.

If it breaks rising support at (3), odds favor that some selling pressure takes place in the US$, which metals would lov...



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Insider Scoop

Analysts Cautious On Williams-Sonoma After Q3 Print

Courtesy of Benzinga.

Related WSM 48 Stocks Moving In Friday's Mid-Day Session 28 Stocks Moving In Friday's Pre-Market Session ...

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Members' Corner

NY Times: OPERATION INFEKTION

 

This is a three-part Opinion Video Series from NY Times about Russia’s meddling in the United States’ elections as part of its "decades-long campaign to tear the West apart." This is not fake news. Read more about the series here.

OPERATION INFEKTION

RUSSIAN DISINFORMATION: FROM COLD WAR TO KANYE

By Adam B. Ellick and Adam Westbrook

EPISODE 1

MEE...



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Chart School

Weekly Market Recap Nov 11, 2018

Courtesy of Blain.

This past week was saw another positive move up by bulls – especially in the Dow and S&P 500; the NASDAQ was not quite as enthusiastic.   Wednesday’s rally was on the legs of an election that was seen as market friendly or at least not as bad as it could have been.   Essentially – paying people a lot of money to get nothing done the next 2 years – woo hoo!

The market is interpreting Wedneday’s result as insuring that “no big things will get done,” in Washington between now and 2020, Craig Birk, chief investment officer at Personal Capital told MarketWatch. “The market appreciates the relative certainty of the slow legislative agenda.” he said.

“As President Trump plans his 2020 reelection campaign, a gridlocked Congress is unlik...



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Digital Currencies

Bitcoin's high energy consumption is a concern - but it may be a price worth paying

 

Bitcoin's high energy consumption is a concern – but it may be a price worth paying

Shutterstock

Courtesy of Steven Huckle, University of Sussex

Bitcoin recently turned ten years old. In that time, it has proved revolutionary because it ignores the need for modern money’s institutions to verify payments. Instead, Bitcoin relies on cryptographic techniques to prove identity and authenticity.

However, the price to pay for all of this innovation is a high carbon footprint, created by Bitc...



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ValueWalk

Vilas Fund Up 55% In Q3; 3Q18 Letter: A Bull Market In Bearish Forecasts

By Jacob Wolinsky. Originally published at ValueWalk.

The Vilas Fund, LP letter for the third quarter ended September 30, 2018; titled, “A Bull Market in Bearish Forecasts.”

Ever since the financial crisis, there has been a huge fascination with predictions of the next “big crash” right around the next corner. Whether it is Greece, Italy, Chinese debt, the “overvalued” stock market, the Shiller Ratio, Puerto Rico, underfunded pensions in Illinois and New Jersey, the Fed (both for QE a few years ago and now for removing QE), rising interest rates, Federal budget deficits, peaking profit margins, etc...



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Biotech

Gene-editing technique CRISPR identifies dangerous breast cancer mutations

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

 

Gene-editing technique CRISPR identifies dangerous breast cancer mutations

Breast cancer type 1 (BRCA1) is a human tumor suppressor gene, found in all humans. Its protein, also called by the synonym BRCA1, is responsible for repairing DNA. ibreakstock/Shutterstock.com

By Jay Shendure, University of Washington; Greg Findlay, ...



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Mapping The Market

Mistakes were Made. (And, Yes, by Me.)

Via Jean-Luc:

Famed investor reflecting on his mistakes:

Mistakes were Made. (And, Yes, by Me.)

One that stands out for me:

Instead of focusing on how value factors in general did in identifying attractive stocks, I rushed to proclaim price-to-sales the winner. That was, until it wasn’t. I guess there’s a reason for the proclamation “The king is dead, long live the king” when a monarchy changes hands. As we continued to update the book, price-to-sales was no longer the “best” single value factor, replaced by others, depending upon the time frames examined. I had also become a lot more sophisticated in my analysis—thanks to criticism of my earlier work—and realized that everything, including factors, moves in and out of favor, depending upon the market environment. I also realized...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

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 ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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All About Trends

Mid-Day Update

Reminder: Harlan 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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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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