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Wednesday, June 7, 2023



Fabulous Friday Finish


That's how much our Long-Term Portfolio has gained since our March 18th review and it's only April 9th!  We only had $634,785 worth of positions on the 18th and now they are $730,400 (the rest is over $1M in CASH!!!) so that is a completely insane gain of 15% in 3 weeks.  That's an annulized return rate of 260% – do you really think this is sustainable?  

I know we keep trying to cash in the LTP but then we keep deciding the positions are perfect and we certainly can't argue with the results but the whole thing simply has to collapse at some point.  It's the market that is causing this idiocy – our strategies just eggagerate the gains as we use options to leverage the upside momentum and, since the broad market never goes down and we tend to make sensible value picks – we make outized gains in our virtual portfolios.   

Gains are, of course, lovely on paper but you have to make sure you keep them and that's the trick as the Fear of Missing Out on a contiued rally tends to keep us from sensibly cashing in our gains.  We're 2/3 CASH!!! in the LTP and most of our portfolios so imagine what we'd be making if we were gung-ho bullish but we learned our lesson in 2000 and 2008 that rallies can end in a snap and you can't simply unwind your positions at the first hint of trouble – that's just not the way it works.  

So we hedge using our Short-Term Portfolio (STP) and, as I mentioned on Wednesday, that $200,000 portfolio was down 3.1% and now, with the extended rally, it's down 15.2%, with the rally knocking us down by about $26,000 so the net gain of our paired portfolios is "only" about $70,000 for the month.  

What that means though, is that the hedges are on sale and, since we just made net $70,000, we should certainly be putting a portion of that money to work buying more hedges.  The STP positions we have at the moment gave us about $500,000 worth of downside protection but now we have $95,615 in additional positions to protect, don't we?  

Still, we don't have to go crazy as the rally shows no signs of slowing and we are adequately covered so we'll just be looking to make small maintennence adjustments to our positions.  For example, we are up 65.3% on the short SQQQ 2023 $30 calls we sold on November 6th:

SQQQ Short Call 2023 20-JAN 30.00 CALL [SQQQ @ $11.27 $-0.37] -100 11/6/2020 (651) $-78,500 $7.85 $-5.13 $-0.54     $2.73 $-0.18 $51,250 65.3% $-27,250
SQQQ Long Call 2022 21-JAN 10.00 CALL [SQQQ @ $11.27 $-0.37] 200 2/8/2021 (287) $104,000 $5.20 $-1.85     $3.35 $-0.20 $-37,000 -35.6% $67,000
SQQQ Short Call 2023 20-JAN 30.00 CALL [SQQQ @ $11.27 $-0.37] -100 2/4/2021 (651) $-45,000 $4.50 $-1.78     $2.73 $-0.18 $17,750 39.4% $-27,250

Our long calls have held up well by comparison (down 35.6%) so the position is profitable – even though SQQQ certainly went the wrong way.  That's because we sold more premium than we bought (being the house, NOT the gambler!).  But making a profit on paper doesn't do you any good unless you cash it in at some point.  Clearly we don't need to cash the short $30 calls as they are almost 200% above the current price so the Nasdaq would have to fall over 60% to put those in the money.  What we can do, is sell 100 of the Jan, 2022 20 calls at $1.70 ($17,000) and those will help pay for us to roll our 2022 $10 calls at $3.35 to the 2023 $10 calls at $4.80 for net $1.45 ($29,000).  

Now we've spent just net $12,000 and bought ourselves another year of protection (and another year to sell short calls) and when 2024 options come out (July), we will roll our 200 short 2023 calls to 100 short 2024 calls for about even and then we will be back in balance.  So we're risking that the market won't fall more than 30% between now and July but, if it does – we can simply buy more longs or buy back more of our short calls to blance things out again.  If the market continues to go up, all the short calls will go worthless and we'll sell some more to pay for the next roll of our long position.  

That's why, in the long-run, our hedges are far more cost-effective than they seem – because we are able to maintain them with relatively cheap adjustments.  This is a $400,000 spread but really we don't see SQQQ likely to go over $20 so we'll call it a $200,000 spread that we netted into for a $19,500 credit and now we're spending $12,000 to adjust it so STILL a free spead – and free protection for our long portfolio!

Going the opposite way, TQQQ is the ultra-long ETF for the Nasdaq and we are experimenting to see if we can make more money shorting that than being long SQQQ (the ultra-short).  

TQQQ Long Put 2022 21-JAN 100.00 PUT [TQQQ @ $105.36 $3.19] 20 12/7/2020 (287) $68,000 $34.00 $-12.78 $34.00     $21.23 $-1.13 $-25,550 -37.6% $42,450
TQQQ Short Put 2022 21-JAN 70.00 PUT [TQQQ @ $105.36 $3.19] -20 12/7/2020 (287) $-34,500 $17.25 $-7.70     $9.55 $-0.45 $15,400 44.6% $-19,100
TQQQ Short Put 2021 16-APR 80.00 PUT [TQQQ @ $105.36 $3.19] -7 3/12/2021 (7) $-3,500 $5.00 $-4.90     $0.11 $-0.10 $3,427 97.9% $-74

Here we spent net $30,000 on the $60,000 spread and the short April $80 puts will expire worthless and we could sell the June $85 puts for $5 but I'd rather do that on a pullback as they were $13 two weeks ago so, instead, let's spend $9.55 ($19,100) to buy back the short Jan $70 puts and, hopefully, we'll get a pullback that will allow us to replace them with better short puts on a pullback as well.

So what if there is no pullback?  Well then we would sell, perhaps, the Jan $90 puts for $16.50 ($37,000) and use that money to roll the Jan 100 puts at $21.25 to the Jan $120 puts at $32.50, for net $11.25 ($22,500).  That would leave us in a much higher put spread that's deeper in the money for net $4,600 out of pocket – an amount we can intantly make back on our next short put sale.  In fact, I like our backup plan almost better than our main plan of catching a well-timed pullback with our naked long puts – we'll see how this plays out!  

Have a great and well-hedged weekend, 

– Phil



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Just to add BYND, they have been trying to bring costs down, but meat is now the most expensive I've ever experienced. Im mostly "carnivore". Not something I would personally ingest, but the stock pops and drops on a regular basis. 

Swamp I have a couple of TDA accounts that I can see together in the app but I had to link them (different from adding to group and I do not recall the process)

Phil! Thank you for the repost, exactly the insight I was looking for. 

Phil-I posted about   BYND  as I thought it was a  winner and  still do. Of course you can make money-it goes up and down, but they are expanding their products to sausage like meats, breakfast meats and it is found in many restaurants. That meat figure is probably not wrong,, however there are many who eat very little meat  or non at all. In this area  60%  of men have Bmi's of 32.7 with almost  60 lbs to lose. Women were  30.5 Bmi. This was in St  Louis county which is Duluth Mn. It is  only one of many reasons to limit meat in the diet. Average weight for men is 241 women 178. This comes from a website called  DietSpotlight which highlights the obesity problems not to even mention health problems.

CHL- Phil, thanks for the tip- I have emailed both Barron's and WSJ. I am not a social media user but is there some platform on which we could post commentary giving TDA a sharp kick? 

By the way, you have in the past left the impression of having some well placed political contacts. I have emailed my Congressman but so far no response. Seems to me that executive orders are both written in and out. 

Take a look at the May VXX. Wow-haven't seen a play like that in awhile. 22K calls and more than dble that 0n 9 and 10  puts!

I have moved my CHL ADR shares to IB, and am now converting them to regular…..at least I think I am…. 🙂

June Vxx has well over 100K Puts bet 8-13! Now I am interested.  Who is expecting what?

CHL – Fidelity is converting ADRs to HK stock. Just contact their international trader service at 800-544-2976

rn273 CHL Fidelity  but I trust one has to have an account with them ? Right?

CHL/Fidelity/TD/IBKR – when one opens an account, one can open by depositing cash or one can transfer the assets. This feature is available so you don't have to produce a taxable event or be out of the market while the transfer is happening. So yeah you have to have an account but you should be able to open it with your CHL shares. Except maybe you want to just move everything while you're at it. 

Pharm-great news. If that works, I will be right behind you 🙂


I am not sure if this has any impact on the matter, but I feel we should try a combined effort here. What do all involved feel????

Emai to TDA

I have noticed that our 2400 shares of China Mobile (CHL) held in account XXXXXX have now mysterious disappeared from our account. Surely they cannot go up in thin air, especially as China Mobil, is not gone bankrupt and is trading very well in other countries of the world. 
We just received a voting notification from your company, obviously as we, the certified owners of the shares, you as our broker holding IN TRUST our shares certificates. 
From our trading club, we have many members, using your company as trading broker, and some have reported quite some unpleasant treatment by your company in respect of CHL. 
It was now from some members suggested to bring your handling of the matter by your company to the attention of the SEC. 
I sincerely trust that these steps are not necessary, and expect you will assist us in this matter. Our 2400 shares, as I understand have presently an approximate value of about 32 x 2400 = 76,800 US $ for us at the Hong Kong stock exchange. This is obviously no chicken fee for us. I see only the Jan 23 5 short puts are held against us, even they are OTM it shows a debit of over 50$ per option. 
As a customer of your company for many years and more than XXXX dollars in our three accounts, we trust you will resolve this matter, like other brokers do, in a speedy and businesslike manner.
Looking forward to hear from you by return of email,

This prompt reply from TDA


I have reviewed your account and would be happy to help.

While I understand it can be frustrating when companies like CHL were delisted from the NYSE, these decisions are in the hands of the exchanges alone and brokerage firms are only allowed to process information that is laid out in the regulatory filing.

On 31 Dec 2020, the NYSE announced it would be delisting the following Chinese telecommunications securities as soon as 7 Jan 2021, retracted this decision on 4 Jan 2021, and then again delisted these securities on 6 Jan 2021:
China Mobile Ltd. (Symbol CHL)
China Telecom (Symbol CHA)
China Unicom (Symbol CHU)?

TDA restricted these securities to closing transactions only on January 4, 2021 in order to comply with our regulators, exchanges and Executive Order 13959 of November 12, 2020 (Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies).

At this time, we will not be able to supercede these regulations and I encourage you to research these issues with the company itself, the NYSE, and the executive order to which firms like ours are held.

We appreciate your business and would like you to stay with TD Ameritrade for years to come. If you have any other questions about your investments, strategies, goals, or the resources available to you, simply let us know. We're here to help.

Have a great day.

Haley Shrabel
Assistant Manager
Client Services

TD Ameritrade

Yodi- you have gotten the same runaround/obfuscation response as I have received from my numerous complaints. Once again, they are skirting the issue. Yes, the order is the order and they are sorry about that but you are on your own. Bottom line is they are hands off and will not work to find a solution. I am starting to think that there is something about this situation that has them spooked as it makes no sense to just leave long time clients in the dust. Just speculating but perhaps there is some China related business transaction(s) that has them intimidated. 

One additional suggestion for you and others is following up on Phil's tip re: contacting news organizations. I wrote to Barron's but no reply as yet. I wrote to the WSJ and received a prompt and polite reply saying they would look in to it. Could have been just a polite brush off but more people shaking the tree may get more action. The reporter who responded is Dawn Lim- email dawn.lim@wsj.com.

Email for Barron's is – editors@barrons.com.

Thanks Fellows for the comments. I am not sure how many other people on this board still hold shares of CHL, but I think we should group together, gives us much more say. Here my initial reply to there email obove.

 Haley Shrabel,
We thank you for your answer. The facts you explained, initiated by a self-centered Tyron are very clear to us. However you failed to explain to us, where are our share certificates? As we know the company China Mobile is in a healthy state and trading, so the documents cannot have gone up in thin air!
 Other brokers are assisting their clients to resolve this matter, but as per your comments, your company does not show any interest to do this.  Regret to say, that this is not only our impression, but also the statement from other clients of yours known to us 
Obviously it shows that your company does not value customers as other brokers do. Possible you do not wish to maintain customers in the first place any more. 
We request you to confirm the whereabouts of our share certificates, so we can make the necessary steps of establishing a better broker. Regretfully to say after all your many changes, the original TOS Company has very much deteriorated in valuing customers. Actually if I was an employee of TDA I would be worried about my future in this company.
Looking forward to hear from you via email,

Pstas, Thank you for your comments. I am not to familiar with some of the US abriviations so what WSJ stands for and what can they do to help?

CHL/Pharm – Please note that when I opened up an IB Account to transfer CHL from TD, they would not accept a transfer of the CHL ADR.  Perhaps because I wasn't an existing customer…I recently opened a new account with them.  IB required me to convert the ADR to the underlying security within my TD account and they would accept that transfer.  TD has since executed the conversion of the ADR to the underlying security and I'm in the process of transferring those now to IB…like you, at least I think I am!

CHL/Yodi – Like you, I have struggled with TD as well.  All they are willing to tell you in their messaging is that they cannot sell the ADR at this time.  TD did convert the ADR to the underlying security, which has allowed me to transfer those shares into an IB account where I will be able to sell them on the HK stock exchange.  You just need to have an account with a broker that will sell securities on foreign exchanges.  IB will sell them (again, the underlying security) and so will Fidelity. 


Thanks for the information. I just have started to open an account with IB. Still have to iron out some details with IB.

here a follow up  on correspondence with TDA. I must say I sent the email Sunday Morning Euro time and did receive this reply by 10 AM NY time. But still no results. What does ADR actually stands for?


Thank you for bringing your concerns to our attention. My name is Sam, and I would be happy to assist you.

To clarify, the certificates are held in book-entry form – this means that there are no physical share certificates. We are unable to hold these shares or allow trading on them, but you are able to transfer the shares to a foreign brokerage firm that is not held to US Executive Orders. The position in your account shows the number of shares you have, and any book-entry certificates would be transferred with the shares. I hope this answers your questions! Please reach back out to us with any other questions or concerns.

We greatly appreciate your business and know you have a choice where you invest. If there is anything else we can do for you, or could have done better, please let us know. 

We look forward to serving your needs for years to come. 


Samantha St. Clair
Client Services

Yodi- WSJ stands for Wall Street Journal which is the major business/investing publication. 

ADR stands for American Depository Receipt. As I understand it, foreign companies wishing to trade on the US exchanges have arrangements with a US financial institution (such as Bank of New York) whereby the foreign company's shares are deposited with the US institution which in turn issues a certificate (ADR) which is proxy for the actual shares. In the case of CHL, I believe each CHL ADR represents 5 CHL actual shares. 

Buckeye- can you tell me who or what department you dealt with to initiate the CHL ADR conversion to the underlying shares? I take it from your comments that TDA has already made the conversion within your TDA account? If so, that is just infuriating and baffling as this action was not suggested by any of the numerous TDA people I talked to. 

CHL/pstas – I found my notes the other day. For TD Ameritrade call 888-723-8504. Option #4 – Transfers Department. You are wanting to "surrender" your ADRs. This will initiate the conversion process to the underlying securities. It takes 10-15 for BNY to convert them since they are the bank that holds the all of the underlying securities for ADR issuance. 

CHL/pstas continued – Then it will take another 30 days for TD Ameritrade to receive and post the actual China Mobile shares.  At that point you can initiate a transfer over to your brokerage of choice where you can sell them on the HK Stock Exchange (Ticker 0941.HK).

Again "brokerage of choice" from what I've come to know is Interactive Brokers and Fidelity (there could be others, but definitely not TD) which allow trading on foreign stock exchanges. 

Buckeye- thx.   

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