Posts Tagged ‘CLF’

Fabulous Friday – Our AliBaba Play Pays off Big!

We're already up over 100% on Alibaba.

How, you may wonder?  Well, two ways:  Back in October of 2007, before Alibaba IPO'd in China, I was touting the company when it had an $8Bn valuation ($1.10 per  share – pre-split).  I was the first and only analyst in the US to point out the benefits of Yahoo's investment back then and our Members who play the Asian markets were able to take advantage of that and today should be the culmination of the white whale of investing – the 20-bagger as Alibaba is expected to IPO in the US at $160Bn just 7 years later

YHOO, on the other hand, took the long and winding road but it should finally be getting to our $50 target and that's another 100% gain on the stock – though a very small consolation to those who didn't pick up AliBaba directly.  Fortunately, at Philstockworld, we know how to BE THE HOUSE – Not the Gambler and, back in June, when the rumors of the AliBaba IPO began we came up with a way for our Members to make 400% playing YHOO into the AliBaba IPO.  

From our Live Member Chat Room:

YHOO/Albo – Why not just buy YHOO?  YHOO is $35Bn and owns 22% of AliB while SFTBY is $91Bn and owns 33% of AliB, so you get a lot more bang for your buck with YHOO, whose forward p/e is only 19, than SFTBY, whose forward p/e is about 17 – so not all that significant.  Of course, more significantly is the potential impact of (guessing) $50Bn worth of AliB on a $35Bn company!  

So we don't even have to go crazy if we want to play the "YHOO is undervalued" game.  The Jan $38/45 bull call spread is $1.60 on the $8 spread with 400% upside if YHOO gains 28%.  I think that's worth $800 for 5 shares in the $25KP

continue reading

Tags: , , , , , , , , , , , ,

$10,000 Tuesday – One Trade To Make Your Month!

RUT WEEKLYHow would you like to make $10,000?

If the Russell can finish this option period (24 days) 2.5% higher, at 1,178 or higher, we can turn net $1,000 or less cash into $10,000 for you.  After all, if the Fed is going to give away money – why shouldn't we get our share?

I'll preface this by saying that our Members are already long on Russell Futures at the 1,150 line, as we made that call in our live Member Chat Room (become a Member here) earlier this morning.   

If the market is going to remain bullet-proof (and missile-proof too, it seems) then the RUT is now the lagging index and we can construct a play to take advantage of it breaking back up by making a play on TNA, the 3x Ultra-Long Russell ETF.  

Very simply, if we buy the August $72.50 calls for $3.45 and we sell the Aug $76.50 calls for $1.70, we have a net cost of $1.75 on the $4 spread that's $4.64 out of the money (at goal) and that's 6.4% out of the money so, to be safe, we'll need a 2.5% gain on the Russell, from 1,150 to 1,178.75 to make the full $4.  25 contracts at $4 = $10,000 so we can work with that.

But what about the cost of the 25 contracts (at $1.70 x 2,500, that's $4,250)?  Well, there's a couple of ways to offset that.  One way is to sell 25 TNA Aug $65 puts for $1.70 to offset the cost.  The danger there is, if the Russell goes down 2.5% (to 1,121) or lower, we'll be assigned 2,500 shares of TNA for $65 ($162,500) – that could be unpleasant. 

Instead, we can commit to being long TNA at $45 in 2016 by selling just 5 2016 $45 puts for $8, and that raises $4,000 and commits us to owning "just" 500 shares of TNA at $45 per share ($22,500).  

Now, if you don't want to be bullish on the Russell when TNA is down 37% (Russell 1,006), then why are you long on it at 1,150?  

continue reading

Tags: , , , , , , , , , , ,

The Buy List – 20 Great Trade Ideas for the Rest of 2014 (Members Only)

INDU WEEKLYWhat a rally!  

While stocks certainly aren't "cheap" by any measure, we've been able to identify 20 that are still good values.  We've been compiling this list and going over trade ideas for playing them in our Tuesday Webinars since May 13th and, of course, we've been posting them in our Live Member Chat rooms, so this is just a review to consolidate our trade ideas.  

We cashed in our Long-Term Portfolio last week at what we thought was a top but so far – so wrong on that call!  Since it's up 19% in just 6 months, we're not going to cry about missing the last 400-point move on the Dow (2.5%) – we'll just have to look ahead to deploying our cash again, following the same strategy that was so successful in the first half of the year, which was, essetially, our "7 Steps to Consistently Making 20-40% Annual Returns" system:

As we did in building our Long-Term Portfolio, we're not going to rush in and buy everything.  We will do exactly what we did in January where, following our Fall Buy List, we simply added stocks from our list whenever they became cheap.  While our Members are able to pick up our trade ideas as they are released, we don't always add them to our virtual portfolios right away.  As with the first half's Long-Term Portfolio, we will track every entry and exit in both our Live Weekly Webcasts, as well as in our Live Member Chat Room and alerts will be sent to our subscribers (you can join here, Basic and Premium Members get full access).  

Our picks were originally grouped by industry sectors but, for reference purposes, I'm going to list them alphabetically below – these are the original trade ideas (the Webinar dates where we discussed our picks are next to the symbol), most are still playable but some have already taken off :

ABX (5/28) we featured in our June 3rd post - obviously one I like.  If you don't want to buy the stock for $15.90 (and we NEVER pay retail at PSW!), then you can sell the 2016 $15 puts for $2.05,
continue reading

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

TGIF – Can We Stop The Week Before Our Indexes Fail?

Look at the Russell!  

Look at the Nasdaq!  Are you seriously still holding onto your Dow, S&P and NYSE stocks?  That's exactly what people did in 2008, when they were so used to the markets being saved whenever they dipped, that they ignored all the warning signs – until it was too late.  

I know that I've been sounding like a broken record and you can call me Chicken Little but cut me a little slack as we are protecting profits here.  

We have 5 virtual porfolios we track for our Members and the $100,000 Butterfly Portfolio is up 19.4% ($19,000), the $500,000 Long-Term Portfolio is up 9.6% ($48,000), the $100,000 Portfolio is down 5.8% ($5,800), the $500,000 Income Portfolio is up 6.4% ($32,000) and our $25,000 Portfolio is up 15.4% ($3,850).  Overall, that's a gain of 8.8% on $1.225M deployed in 4 months.  

SPY 5 MINUTEThe Short-Term Portfolio is a hedge to the Long-Term Portfolio, so we haven't cashed those in but the Income Portfolio doesn't have an external hedge, so we moved to cash on that one last month (BEFORE the Nas and Rut started crashing off decade highs) and the Butterfly Portfolio is self-hedging while the $25KP has just one position left.  

Perhaps I'm wrong and the Nasdaq and the Russell will recover and the other indexes will all move up to new highs.  Even if they do, our worst case is we miss a bit of a rally.  If we're breaking out to new all-time highs from here – there will be plenty of money to be made.  BUT – if I'm right and the market drops 5-10%, then our taking 110% off the table at the top means that when we buy stocks again at 90%, we are buying 120% of what we could have bought had we not wisely cashed out in the rally.  

NDX WEEKLYThe REWARD for being cautious is owning 20% more shares if we're right, owning maybe 2.5% less shares if we're wrong or owning the same amount if the market stays flat.  It doesn't take a degree in statistical analysis to see why I
continue reading

Tags: , , , , , , , , , , , , , , , , , , , , ,

Call Spread Looks For Upside In Cliffs Shares


Today’s tickers: CLF, YPF & ALU

CLF - Cliffs Natural Resources Inc. – A bullish spread initiated on Cliffs Natural Resources this morning looks for shares in the largest North American producer of iron ore pellets to move higher by year end. Shares in Cliffs today increased as much as 6.75% to $34.47 in the first half of the session, rebounding after last week trading down to a 2-year low of $28.05. One options player positioning for the price of the underlying to continue higher appears to have purchased a 500-lot Dec. 28 ’12 $34/$38 call spread for a net premium of $0.78 per contract. The spread makes money as long as CLF shares rally 2.6% over the current price of $33.91 to exceed the effective breakeven point at $34.78, with maximum potential profits of $3.22 per contract available on the position in the event shares gain 12% to hit $38.00 by expiration.

YPF - YPF SA – Shares in Argentina’s largest energy company rose sharply today on reports the oil and gas producer may bid for Petrobras’s Argentine assets. The stock increased as much as 7.6% to $13.95 in the first half of the trading day, sparking heavier than usual trading traffic in YPF options. Upside call buying in the front month options suggests some traders are positioning for shares to extend gains in the near term, with upwards of 700 lots changing hands at the Dec. $15 strike versus open interest of 10 contracts. It looks like most of these call options were purchased for an average premium of $0.10 apiece in the early going, preparing buyers to profit should YPF’s shares rally another 8% to exceed $15.10 at expiration next week. Shares in YPF, down roughly 60% year-to-date, last traded above $15.10 back in April. It looks like traders are also buying the Jan. 2013 $15 strike calls today, with roughly 310 purchased this morning for an average premium of $0.23 per contract. Time and sales data from Thursday’s session reveals around 500 of the Jan. 2013 $15 strike calls were purchased yesterday…
continue reading

Tags: , ,

Which Way Wednesday – Fed Edition

Click to ViewStrap in folks, it's going to be another wild ride!  

As you can see from Doug Short's S&P chart,we are about to slam right into that collapsing 50-day moving average, now at 1,223.40 – right about where the S&P topped out on yesterday's morning spike.  Unfortunately, the Nasdaq topped out and headed down before the other indexes got a chance to complete their up cycle and the Dollar rose back over the 77.50 line and tanked the market – exactly as we predicted it would at the bottom of yesterday morning's post

Of course, I can't MAKE these things happen – I can only tell you what's going to happen and give you trade ideas to help you profit from it.  I mentioned that we had picked up 10 DIA 9/30 $115.75 calls in our virtual $25,000 Portfolio at $1.05 on Monday and they topped out at $1.75 (up 66%) but we took a non-greedy exit at $1.45 in the morning spike (up 33%) and we switched to 20 QQQ 9/30 $57 calls at .45 in the afternoon sell-off.  So, we made $350 off a $1,050 investment and then we spend $900 but now we have 20 contracts instead of 10 but we also have $450 in cash so now risking just $600 of our original investment on the much more volatile Fed day.  

Another trade idea we like ahead of the Fed that's still playable is 20 FAS weekly $13/14 bull call spreads at .38 ($760), selling 10 JPM Oct $28 put for .55 ($550) for net $210 invested on the 20 $1 spreads.  The worst-case on this spread is owning JPM for net $28.10, which is 13% off the current price and the best case is a $1,790 profit (852%) in a week.  That sounds like a lot but options let you do funny things like at 11:30 in Member Chat, we saw PCLN making new highs against news that we thought was not actually that good for them on closer examination.  Our trade idea to take advantage of that was:  

If you want to play PCLN bearish – it’s very risky but the weekly $565/555 bear put spread is $6 and you can sell the $565 calls for

continue reading

Tags: , , , , , , , , , , , , , , , , ,

Oracle Bulls Envision 10% Rally in Shares by June Expiration

Today’s tickers: ORCL, KFT, CLF, JPM, JCP, MCD, ROK, HK, TIE & LXK

ORCL – Oracle Corp. – Options players are initiating bullish stances on software development firm, Oracle Corp., today ahead of the company’s third-quarter earnings report scheduled for Thursday after the closing bell. Oracle’s shares rallied 0.95% during the current session to trade at a new 52-week high of $25.80. Medium-term optimists scooped up 10,600 call options at the June $28 strike for an average premium of $0.37 per contract. Perhaps plain-vanilla call buyers foresee continued bullish movement in the price of Oracle’s shares through expiration in June. Investors long the calls accrue profits if shares of the underlying stock surge 10% from the current price to breach the breakeven point at $28.37 by expiration day.

KFT – Kraft Foods, Inc. – Voracious investor appetite for call options on Kraft Foods this afternoon pushed the KFT ticker symbol onto our ‘most active by options volume market scanner’ as shares of the U.S. food maker jumped 2.25% to a new 52-week high of $30.40. It looks like one particularly bullish individual satisfied his hunger for Kraft-calls by purchasing a large chunk of 16,000 contracts at the September $32 strike for a premium of $0.69 apiece. The investor holding the call options is prepared to reel in profits on the position if Kraft’s shares rally another 7.50% from the current value to surpass the breakeven price of $32.69 by expiration day in September.

CLF – Cliffs Natural Resources, Inc. – Shares of iron ore pellet producer, Cliffs Natural Resources, jumped more than 6.00% during the trading day to arrive at a fresh 52-week high of $69.34. Investors celebrated Cliffs’ new high by enacting a plethora of bullish options strategies on the stock. One such individual established a ratio risk reversal in order to cover the cost of taking a long position in Cliffs-calls. The optimistic trader sold 1,500 deep in-the-money put options at the July $75 strike for a premium of $11.50 per contract, and purchased 3,000 calls at the same strike for an average premium of $4.51 each. The reversal player pockets a net credit of $2.48 per contract on the transaction, which he keeps if shares of the underlying stock rally up to or above $75.00 by expiration. Additional profits also accumulate for the trader should shares breach the effective breakeven price of $75.00. Other bullish investors initiated…
continue reading

Tags: , , , , , , , , ,

Options Player Reveals Long-Term Bullish Sentiment on AIG

Today’s tickers: AIG, MU, F, POT, CLF, PAYX, ERIC, SVU, LFC & CA

AIG – American International Group, Inc. – The insurer’s shares experienced a fantastic 56.7% run up from its low point in the current month of $24.54 on March 3, 2010, up to yesterday’s intraday high of $38.45. During the current session, AIG surrendered a small portion of its recent share price gains, slipping slightly lower by 1.40% to stand at $34.62 in afternoon trading. Extreme-bullish positioning in long-dated options caught our attention today as one investor established a call spread in the January 2011 contract. The optimistic trader purchased 5,500 calls at the January 2011 $50 strike for a premium of $3.65 apiece, and sold the same number of calls at the higher January 2011 $75 strike for $1.30 each. The net cost of the transaction, and maximum loss potential faced by the investor, amounts to $2.35 per contract. American International Group’s shares must surge 51.2% from the current price of $34.62 in order for the trader to break even on the spread at $52.35 per share. Perhaps the individual responsible for the trade expects AIG’s shares to rebound up to the current 52-week high on the stock of $55.90 (attained back on August 28, 2009), or above within the next ten months to expiration. Maximum available profits of $22.65 per contract – total gains of $12.4575 million – accumulate for the bullish player if AIG’s shares jump 116.6% from today’s price to $75.00 by January expiration day. Shares last traded above $75.00 back in October of 2008.

MU – Micron Technology, Inc. – A large-volume long-term bullish transaction on the manufacturer of semiconductor devices indicates one big options player anticipates continued upward movement in the price of Micron’s shares by expiration in January 2011. Shares rallied 2.55% to $10.05 this afternoon, but earlier increased more than 4% to reach an intraday high of $10.25. The optimistic investor purchased a debit call spread in by picking up 20,000 in-the-money call options at the January 2011 $10 strike for a premium of $2.07 apiece, marked against the sale of 20,000 calls at the higher January 2011 $15 strike for $0.58 each. The net cost of the spread amounts to $1.49 per contract, positioning the investor to amass profits if Micron’s shares exceed the breakeven price of $11.49 by expiration next year. Maximum potential profits of $3.51 per contract…
continue reading

Tags: , , , , , , , , ,

Option trader predicts natural gas set to rally into next heating season

Today’s tickers: UNG, HIG, XLF, XRT, CLF, WFMI & VRTX

UNG– Shares of the natural gas fund have rallied by more than 1% to stand at $16.66. We observed some bullish call buying on the ETF by one investor looking for natural gas prices to heat up as we head into the beginning of ‘heating season’ in October. It appears that this individual looked to the October 20 strike price and purchased 26,000 calls for an average premium of 1.45 apiece. The 31,000 call options traded at the October 20 strike today is more than five times the existing open interest at the strike of just 6,834 lots. With a breakeven point of $21.45 on the trade, the investor is hoping to see shares of UNG rally by a minimum of 29% from the current price so he may begin to garner profits to the upside. – United States Natural Gas ETF

HIG– Investors in the insurance and financial services firm have witnessed HIG’s shares surge more than 21% today to the current price of $15.23. While a mass of more than 120,000 option contracts exchanged hands on the stock throughout the trading day, our attention was drawn to a couple of bullish plays. Traders who expect the stock to retain gains into next month looked to the June 16 strike price and purchased some 4,000 calls for an average premium of 1.20 each. Investors will breakeven at a price of $17.20 by expiration. Uber-bullishness was observed at the September 25 strike where about 4,400 calls appear to have been purchased for a premium of 91 cents per contract. These call-buyers have thrown a Hail Mary pass today, but they will have to wait to see whether it will be received in the end zone or whether it will fall short by expiration. To profit from the long-call position, shares will need to rally with a vengeance by about 70% through the breakeven point at $25.91. Option implied volatility has climbed throughout the week from 112% on Monday to the current reading of 144%. – Hartford Financial Services Group, Inc.

XLF– The financials ETF, a daily presence on our ‘most active by options volume’ market scanner, has enjoyed a more than 3.5% rally to $11.80 amid broad gains enjoyed by financial firms today. While more than 250,000 option contracts were traded on the fund, we focused in on one…
continue reading

Tags: , , , , , ,


Phil's Favorites

John Mauldin: Trade Wars Could Trigger "The Next Great Depression"

Courtesy of Zero Hedge

Last week on Erik Townsend's Macrovoices podcast, Jim Grant, storied credit investor and founder of Grant's Interest Rate Observer, explained the reasoning behind his call that the great secular bond bear market actually began in the aftermath of the UK's Brexit vote during the summer of 2016 - when Treasury yields touched their all-time lows.

Surprisingly, Grant's call isn't rooted in the bold-faced absurdity of Italian junk bonds trading with a zero-handle (although that's certainly part of it). Rather, Grant explained, a historical analysis reveals that bond yields fluctuate in broad-based multi-generation cycles of different lengths. And given the carte blanche allotted to econo...

more from Ilene

Zero Hedge

John Mauldin: Trade Wars Could Trigger "The Next Great Depression"

Courtesy of Zero Hedge

Last week on Erik Townsend's Macrovoices podcast, Jim Grant, storied credit investor and founder of Grant's Interest Rate Observer, explained the reasoning behind his call that the great secular bond bear market actually began in the aftermath of the UK's Brexit vote during the summer of 2016 - when Treasury yields touched their all-time lows.

Surprisingly, Grant's call isn't rooted in the bold-faced absurdity of Italian junk bonds trading with a zero-handle (although that's certainly part of it). Rather, Grant explained, a historical analysis reveals that bond yields fluctuate in broad-based multi-generation cycles of different lengths. And given the carte blanche allotted to econo...

more from Tyler

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...

more from Bitcoin

Insider Scoop

Wendy's 'Intriguing' 2020 Outlook Overshadowed By Valuation Concerns, Oppenheimer Says

Courtesy of Benzinga.

Related WEN Benzinga's Top Upgrades, Downgrades For March 20, 2018 Benzinga's Top Upgrades, Downgrades For March 8, 2018 ... more from Insider

Chart School

Bears Take Control

Courtesy of Declan.

More decisive action from bears today as markets lose support.  The S&P undercut the rising trendline and 20-day plus 50-day MAs in a move which looks like it could develop into a test of the February spike low and the 200-day MA again; support at 2,695 is looking critical here. Aggressive traders could look to buy at these levels but confidence in this holding would not be high.

The Dow also saw its 'bear flag' / consolidation triangle resolve to the downside. The two positives were the relatively light volume and the ...

more from Chart School


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...

more from David

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 >>

As Seen On:

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 >>