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  1. phil

    Write up for TV tomorrow:

    So far, in our new educational series, we've put $10,100 to work and we're up $840 (8%) in our first two months.

    Last time I was on (5/30) we talked about hedging the Nasdaq Futures using /NQ as it crossed the 5,800 line with tight stops ($100 loss) and again at the 5,900 line and the first time it didn't work and we lost $100 and the 2nd time it didn't work, and we lost $100 but the 3rd time, at 5,900 – it did work spectacularly well and we got a 200-point drop that paid $4,000 per contract for a net $3,800 per contract gain:

    We also discussed using a bear put spread on the Nasdaq ETF (QQQ), buying 10 Jan $147 puts for $9.50 ($9,500) and selling 10 Jan $136 puts for $5.05 ($5,050) for net $4,450 on the $11,000 spread.  

    QQQ fell about $4 since the 30th and the spread is now net $5.50 ($5,090) for a $640 gain (14%) so far against the 2.5% drop in the Nasdaq.  That's one example of getting good leverage.  

    We wanted to discuss leverage today so let's talk about how we can limit our risk while still having good upside with a speculative play on the Pharmacy play, Zynerba Pharmaceuticals (ZYNE).  

    ZYNE makes transdermal delivery systems (skin patches) for cannaboid therapeutics (pot) to help treat epilepsy and they are conducting a Phase II trial that, if it goes well in August, could lead to explosive growth.  Or it could fail and they die – so it's the kind of play where we want to limit our losses.  

    Rather than buying the stock for $18, we can instead go past our expected August event and buy a bull call spread that limits our downside risk:

    • Buy 4 ZYNE Nov $15 calls for $7.50 ($3,000) 
    • Sell 4 ZYNE Nov $22.50 calls for $5 ($2,000) 

    That puts us in the $3,000 spread for net $1,000 and our loss is limited to the $1,000 we put in yet our upside potential is $2,000 (200%) at $22.50.  In order to make $2,000 at $22.50 you would need approximately 400 shares of stock for $7,200 and limiting your loss to $1,000 would mean you would have to set a stop at $15.50 and phama stocks are very volatile.

    Using the spread does cap your gains but it limits your losses and gives you great leverage (7:1 in this case).  Not only that but, because you are buying 4 $15 calls for $1,000 ($2.50 each), your break-even is $17.50, which is 0.50 below the current price – giving you a discount to buying the stock right from the start.  

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Phil's Favorites

Think Facebook can manipulate you? Look out for virtual reality


Think Facebook can manipulate you? Look out for virtual reality

What these people are seeing isn’t real – but they might think it is. AP Photo/Francisco Seco

Courtesy of Elissa Redmiles, University of Maryland

As Facebook users around the world are coming to understand, some of their favorite technologies can be used against them. It’s not just the scandal over psychological profiling firm Cambridge Analytica g...

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Zero Hedge

What Happens Next In The Global Trade War: A Q&A With Goldman Sachs


Embed from Getty Images

Courtesy of Zero Hedge

Today, according to Politico, the White House will unveil its plan to hit China with tariffs and other trade restrictions, one day ahead of schedule as President Trump is slated to outline the results of U.S. Trade Representative Robert Lighthizer's investigation into allegations that China violates U.S. intellectual property rights by forcing American companies to transfer valuable technology to Beijing. ...

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Insider Scoop

20 Stocks Moving In Wednesday's Pre-Market Session

Courtesy of Benzinga.


  • Proteostasis Therapeutics, Inc. (NASDAQ: PTI) shares rose 12.4 percent to $5.80 in pre-market trading after the company reported withdrawal of equity offering due to market conditions.
  • China Auto Logistics Inc. (NASDAQ: CALI) shares rose 10.8 percent to $4.40 in pre-market trading after surging 15.41 percent on Tuesday.
  • Fennec Pharmaceuticals Inc. (NASDAQ: FENC) rose 8.9 percent to $10.38 in pre-market trading a... more from Insider

Digital Currencies

Why accountants of the future will need to speak blockchain and cryptocurrency if they want your money


Why accountants of the future will need to speak blockchain and cryptocurrency if they want your money


Courtesy of Anwar Halari, The Open University

If you haven’t already heard of Bitcoin, you either haven’t been paying attention or you’re a time traveller who just touched down in 2018. Because by now, most of us will have heard of Bitcoin and some of us have even jumped on the bandwagon, investing in cryptocurrencies.

But despite its popularity, many people still don’t understand the technology that underlines it: blockchain. In...

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Chart School

Stall in Decline

Courtesy of Declan.

The good news for bulls was the lack of follow through on the selling. An argument could be made for bullish harami doji in some key indices with stops on a loss of yesterday's lows.

The Semiconductor Index held on to breakout support in what looked to be a successful defense by traders in what could still be a pullback buying opportunity. There was a MACD trigger 'sell' which was a follow-through from Friday - leaving only stochastics in the green. However, relative performance remains in bulls favor. Long opportunities...

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Peter Thiel: Need To Rethink Tariffs In Light Of Trade Deficit With China; SF Sucks, Bitcoin Rocks

By VW Staff. Originally published at ValueWalk.

PayPal cofounder Peter Thiel in a wide-ranging interview on President Trump’s trade tariffs, China’s economy, technology regulations and his outlook for bitcoin.


Check out our H2 hedge fund letters here.

Peter Thiel: Need To Rethink Tariffs In Light Of Trade Deficit With China

Peter Thiel On Leaving Silicon Valley For Los Angeles

Billionaire investor Peter Thiel argues Silicon Valley is is a ‘totalitarian place’ where people are not allowed to have dissenting views.


more from ValueWalk

Members' Corner

Cambridge Analytica and the 2016 Election: What you need to know (updated)


"If you want to fundamentally reshape society, you first have to break it." ~ Christopher Wylie

[Interview: Cambridge Analytica whistleblower: 'We spent $1m harvesting millions of Facebook profiles' – video]

"You’ve probably heard by now that Cambridge Analytica, which is backed by the borderline-psychotic Mercer family and was formerly chaired by Steve Bannon, had a decisive role in manipulating voters on a one-by-one basis – using their own personal data to push them toward voting ...

more from Our Members


How your brain is wired to just say 'yes' to opioids

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


How your brain is wired to just say ‘yes’ to opioids

A Philadelphia man, who struggles with opioid addiction, in 2017. AP Photo/Matt Rourke

Courtesy of Paul R. Sanberg, University of South Florida and Samantha Portis, University of South Florida


more from Biotech

Mapping The Market

The tricks propagandists use to beat science

Via Jean-Luc

How propagandist beat science – they did it for the tobacco industry and now it's in favor of the energy companies:

The tricks propagandists use to beat science

The original tobacco strategy involved several lines of attack. One of these was to fund research that supported the industry and then publish only the results that fit the required narrative. “For instance, in 1954 the TIRC distributed a pamphlet entitled ‘A Scientific Perspective on the Cigarette Controversy’ to nearly 200,000 doctors, journalists, and policy-makers, in which they emphasized favorable research and questioned results supporting the contrary view,” say Weatherall and co, who call this approach biased production.

A second approach promoted independent research that happened to support ...

more from M.T.M.


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 ...

more from OpTrader


NewsWare: Watch Today's Webinar!


We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...

more from Promotions

Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.


EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...

more from Kimble C.S.

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...

Learn more About Phil >>

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>