Posts Tagged ‘CY’

$5,000 Virtual Portfolio Update – Week 3 – $5,598

We're up 12% in 3 weeks – not bad…

The goal of the $5,000 virtual portfolio is to play around the volatility of earnings and make no mistake, it's a high-risk way to trade $5,000 and is meant to be a small portion of a large virtual portfolio – not something you would want to do with your only $5,000.  Of course the usual disclaimer is, this is a virtual portfolio, don't try this at home, trading is dangerous, always consult a professional financial adviser, etc, etc.  The idea is to practice different option strategies and we're having a a very exciting first few weeks! 

Our first play 4 plays that we closed were on AA, DIA, SGR, MCD and DELL, which had a total gain of $629 in our first 6 days.  For details on those trades, go to the Day 6 post.  We have been posting all of the moves for the $5KP in member chat, of course, but also on Seeking Alpha's Stock Talk, where we have discovered the added bonus that, like Twitter, you do not have to refresh the page to see new comments!  If you want to follow these trades, just click on "Follow" under my picture and you will automatically see any comments made there.    

On Wednesday, we also had an open a ratio backspread play on YUM and we sold 6 Aug $37 calls for $1.15 ($690) and bought 4 Aug $35 calls for $2.20 ($880).  The idea of a trade like this into earnings is that a large drop will hurt your callers more than it hurts you and, to the upside, you have net $800 in the net $190 spread before you have to pay your 2 open callers a penny.  That means they would each have to go up $3 before wiping out your profits.  Since YUM was at $36 at the time and we did not feel it would be likely to go to $40, even on great earnings, the play made sense.  YUM had very poor earnings and dropped right down to $34, below our strike.  We decided to buy back the 6 Aug $37 calls for .40 ($240), so a gain of $450 on that leg.  That left us with the 4 naked Aug $35 puts, which we paid $880 for, less the $450 gains so we are in those 4 calls for an average of $1.13 per contract.  We have since doubled down that position at…
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$5,000 Virtual Portfolio Update – Day 9 – $5,424

We had a pretty good week with our new virtual portfolio.

The goal of the $5,000 virtual portfolio is to play around the volatility of earnings and make no mistake, it's a high-risk way to trade $5,000 and is meant to be a small portion of a large virtual portfolio – not something you would want to do with your only $5,000.  Of course the usual disclaimer is, this is a virtual portfolio, don't try this at home, trading is dangerous, always consult a professional financial adviser, etc, etc.  The idea is to practice different option strategies and we had a very exciting first week! 

Our first play 4 plays that we closed were on AA, DIA, SGR, MCD and DELL, which had a total gain of $629 in our first 6 days.  For details on those trades, go to the Day 6 post.  We have been posting all of the moves for the $5KP in member chat, of course, but also on Seeking Alpha's Stock Talk, where we have discovered the added bonus that, like Twitter, you do not have to refresh the page to see new comments!  If you want to follow these trades, just click on "Follow" under my picture and you will automatically see any comments made there.    

On Wednesday, we also had an open a ratio backspread play on YUM and we sold 6 Aug $37 calls for $1.15 ($690) and bought 4 Aug $35 calls for $2.20 ($880).  The idea of a trade like this into earnings is that a large drop will hurt your callers more than it hurts you and, to the upside, you have net $800 in the net $190 spread before you have to pay your 2 open callers a penny.  That means they would each have to go up $3 before wiping out your profits.  Since YUM was at $36 at the time and we did not feel it would be likely to go to $40, even on great earnings, the play made sense.  YUM had very poor earnings and dropped right down to $34, below our strike.  We decided to buy back the 6 Aug $37 calls for .40 ($240), so a gain of $450 on that leg.  That left us with the 4 naked Aug $35 puts, which we paid $880 for, less the $450 gains so we are in those 4 calls for an average of $1.13 per contract.  The calls have fallen…
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Working Class Thursday – Show Us the Jobs!

UnemploymentJobs, jobs, jobs!

That's what it's all about, or not about today.  Last week we got much better than expected numbers as Job losses fell from 640,000 to 565,000 but how much of that was due to the July 4th holiday weekend we will see this morning.  Analysts have quickly lowered their expectations to match last week's figure (as they don't have a clue of their own) and now we are expected to lose "only" 550,000 jobs this morning – still a 6.6M annual pace so keep that in mind should the markets decide to "celebrate" that number.  Looking at the chart, you'll see that July of '08 had a sharp downturn in Job losses as well, down from 400,000 to 350,000 with July 4th celebrated on a Friday last year too.  Those reports arrested a slide in the Dow from 13,000 in May to 11,000 in mid-July and the market ran back to 11,800 on Aug 11th and we held around 11,500 until things fell apart in September and we fell all the way to 8,000.  I know – history is just soooooo boring, what could possibly be learned from it?

Yesterday was an amazing day as we ran right up to the target levels I predicted on Monday, which I reiterated in yesterday's morning post, saying:  "Our upper targets to break the dreaded head and shoulders pattern are:  Dow 8,500, S&P 930, Nasdaq 1,825, NYSE 6,000 and Russell 510."  We had what we call a "Free Money Day" as the markets went up and up and up some more with the Dow topping out way up at 8,620, a 6.4% move off the bottom, which is just about a 20% retrace of the 33% drop so, of course, we shorted it!  The S&P made it right to 932 and finished there, up 7.1% since Friday.  The Nasdaq made it all the way to 1,860 after gapping just over our target at the open, up 6.9% for the week.  The NYSE hit 6,000 on the nose and finished just under it – up 7.1% while the Russell over-achieved to 515, up 8.4% in 3 days. 

As I mentioned yesterday, just because we made our targets, we are not automatically expecting a "breakout."  We are not happy with the WAY in which we got here…
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Brazilian Markets Beckon Option Bulls

Today’s tickers: EWZ, NOK, YUM, EXPE, CY & COF

EWZ – The exchange-traded fund was boosted higher today as Brazilian stocks gained the most in nearly two months. EWZ has experienced a 5.5% rally in shares to $52.80. Option traders populating the fund were seen making bullish plays to take advantage of today’s upward momentum. The near-term July 53 strike price had approximately 9,200 calls purchased for an average premium of 53 cents per contract. Individuals positioned at the July 53 strike are hoping the price of the underlying stock rallies 73 cents higher to breach the breakeven point on the trade at $53.53. One option trader selected the August 52 strike price to initiate a bullish reversal. It appears that this individual shed 6,500 puts at that strike for 2.60 each in order to purchase 6,500 calls for an average premium of 3.10 per contract. The net cost of the reversal amounts to 50 cents and yields a breakeven share price of $52.50. Reducing the price of getting long the calls by selling put options has dramatically reduced the breakeven point to the upside. The investor has already started to profit on the rally as the current market value of the stock is approximately 30 cents higher than the breakeven point. – iShares MSCI Brazil Index Fund

NOK – The world’s biggest maker of mobile phones has rallied higher by more than 6% to stand at $15.63 ahead of earnings scheduled for release tomorrow. The broad-based gains experienced by the market today have bolstered bullish traders who were seen picking up calls and selling puts on Nokia in the October contract. Put options at the out-of-the-money October 14 strike price were sold 2,700 times for 66 cents each while 3,200 puts were surrendered at the October 15 strike for an average premium of 1.05 apiece. Perhaps these investors do not feel the need for downside protection on the stock. The traders may retain the premiums received for writing the puts if shares of NOK remain higher than the strike prices described previously. They may also utilize the option premium to offset the cost of purchasing the shares in the case that shares slip and the puts land in-the-money. Just in-the-money puts were sold 2,400 times at the October 16 strike price for a premium of 1.58 per contract. Again, the full premium is retained if the puts
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Another Weak Weekly Wrap-Up

This is getting tedious!

We were bearish going into the week but not this bearish.  It is unusual though that we have a weekly wrap-up with nothing but negative plays as we did last week but there was nothing very positive in the outlook after the action of the week of the 16th through the 20th, pictured here on this chart.

As I said in the last Weekly Wrap-Up: "Of course nothing beats sector specific covers against your own mix of positions but we like using the DIA puts as general virtual portfolio coverage although, as I mentioned last week, both the DAX and the Qs may now have farther to fall."  The Qs ended up dropping 8.5% for the week while the DAX tumbled 6%, underperforming other global indexes as we had expected it would.  Our hedge play , the DIA June $77 puts, which we went with at $8.22 on Friday and half covered with March $75 puts at $3.85 ended up at $9.85 and $5.40, not much improvement but accomplishing it's goal of converting a net $6.29 entry into puts that are now 100% in the money to our net entry.  At this point, every point down on the Dow is a penny we realize in intrinsic value.  Per our original plan, the $75 puts can still be rolled to 2x the Apr $66 puts, now $2.32, allowing for our long puts to be $11 in the money against the puts we sold.  The reality is more complex than that as we day-traded the covers around and rolled up the longer puts but we went into this weekend with the same bearish half-cover, not wanting to take chances after Friday's poor performance.

On Monday morning, I was not at all enthusiastic about our prospects for the week as we had the Bernanke testimony Tuesday and Wednesday and Trichet started us off with a thud by stating: ""In recent weeks we have seen the first signs of falling credit flows.  An important part of this fall is demand-driven. However…there are indications that falling credit flows reflect also supply-side factors and tight financing conditions associated with a phenomenon of deleveraging.  If such a behavior became widespread across the banking system, it would undermine the raison d’etre of the system as a
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Kimble Charting Solutions

DAX Index Hits Two 18-Year Support Lines, Creates Large Bullish Reversal

Courtesy of Chris Kimble

Has the DAX index from Germany experience a large decline of late? Yes, it has!

Has the decline broken long-term rising support lines? Not so far!

This chart looks at the DAX index on a monthly basis over the past 25-years. Over the past 6-years, it has traded sideways inside of the blue rectangle at (1).

The decline this year saw the DAX hit two 18-year rising support lines at (2) last month, where a large bullish reversal took place.

Until broken, important support remains in play at (2), which is bullish for this key index....



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Zero Hedge

Aaand Its Gone... The Biggest Support For Asset Prices

Courtesy of ZeroHedge View original post here.

Authored by Lance Roberts via RealInvestmentAdvice.com,

Since the passage of “tax cuts,” in late 2017, the surge in corporate share buybacks has become a point of much debate. I previously wrote that stock buybacks were setting records over the past couple of years. Jeffery Marc...



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Phil's Favorites

Here's how scientists are tracking the genetic evolution of COVID-19

 

Here's how scientists are tracking the genetic evolution of COVID-19

Why do scientists care about mutations on the coronavirus? Alexandr Gnezdilov Light Painting

Niema Moshiri, University of California San Diego

When you hear the term “evolutionary tree,” you may think of Charles Darwin and the study of the relationships between different species over the span of millions of years.

While the concept of an “evolutionary tree” originated in Darwin’s “...



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Biotech/COVID-19

Here's how scientists are tracking the genetic evolution of COVID-19

 

Here's how scientists are tracking the genetic evolution of COVID-19

Why do scientists care about mutations on the coronavirus? Alexandr Gnezdilov Light Painting

Niema Moshiri, University of California San Diego

When you hear the term “evolutionary tree,” you may think of Charles Darwin and the study of the relationships between different species over the span of millions of years.

While the concept of an “evolutionary tree” originated in Darwin’s “...



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ValueWalk

Activists demand revamp of anti-redlining law

By Anna Peel. Originally published at ValueWalk.

Over 100 California Community Organizations and Leaders Call for Banking Regulators to Stop Planned Revamp of Anti-Redlining Law during COVID19 Crisis

Q1 2020 hedge fund letters, conferences and more

Worker, Housing, and Small Business advocates call on all resources to be dedicated to saving lives and responding to Coronavirus

San Francisco--Amongst an unprecedented public health crisis that threatens hundreds of thousands of lives, as small businesses are shuttered across California and the nation, and as millions file for...



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Chart School

The Big Short movie guides us to what is next for the stock market

Courtesy of Read the Ticker

There is nothing new in WallStreet, it is only the players that change. Sometimes a market player or an event gets ahead of the crowd and WallStreet has to play catch up.

Previous Post Dow 2020 Crash Watch Dow, Three strikes and your out!

It is important to understand major WallStreet players do not want to miss out on a money making moves.  







...

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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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The Technical Traders

Founder of TradersWorld Magazine Issued Special Report for Free

Courtesy of Technical Traders

Larry Jacobs owner and editor of TradersWorld magazine published a free special report with his top article and market forecast to his readers yesterday.

What is really exciting is that this forecast for all assets has played out exactly as expected from the stock market crash within his time window to the gold rally, and sharp sell-off. These forecasts have just gotten started the recent moves were only the first part of his price forecasts.

There is only one article in this special supplement, click on the image or link below to download and read it today!

...

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Members' Corner

10 ways to spot online misinformation

 

10 ways to spot online misinformation

When you share information online, do it responsibly. Sitthiphong/Getty Images

Courtesy of H. Colleen Sinclair, Mississippi State University

Propagandists are already working to sow disinformation and social discord in the run-up to the November elections.

Many of their efforts have focused on social media, where people’s limited attention spans push them to ...



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Digital Currencies

While coronavirus rages, bitcoin has made a leap towards the mainstream

 

While coronavirus rages, bitcoin has made a leap towards the mainstream

Get used to it. Anastasiia Bakai

Courtesy of Iwa Salami, University of East London

Anyone holding bitcoin would have watched the market with alarm in recent weeks. The virtual currency, whose price other cryptocurrencies like ethereum and litecoin largely follow, plummeted from more than US$10,000 (£8,206) in mid-February to briefly below US$4,000 on March 13. Despite recovering to the mid-US$6,000s at the time of writin...



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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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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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