Hey I just did a nice options trade on LL for $800 (50%) gain thanks to this site, so… not bad for my first day! An hour of reading you guys and I already paid for two months subscription! Thank you!
lchu
Phil, thanks for the webinar and options subject…I wasn't shown as attending but I was there for most of it. Your memory amazes me, your speed on the computer amazes me, your math skills blow me away. coke
Coke
Greetings Phil, I am an Economist at Harvard and some of my colleagues and I would like to let you know that we follow your posts on SA, and find your analysis refreshing, rigorous, and acute. Great work! Though many of us (including myself) have our work covered in the Wall St Journal, in many ways your macro commentary is more fearless and accurate than what is generally found in that venerable publication. Kind regards, Daniel
Daniel
What a quarter! (AAPL, etc.) "People react; PSW'ers anticipate." Thanks everyone for a vibrant board.
Silentstorm
Way back did 20 of your suggested short BP Jan 11 26 P @ 4.3 now .85 — sold half. this am — paid for a years sub AGain!! thank you very much!
Ban2
Took profit on QQQ 57 Puts, bot 40 at $0.07, sold 20 for $0.15 and 20 for $0.32. Thank, Phil
Bobhu
Tesla et. al. – I've spent many months getting hammered shorting overvalued Momos, until, finally, I internalized Phil's message. Play small; give yourself plenty of room to double/move up the [lack of value] chain in terms of price. Play short; take [Musk's, eg.] latest bleep and sell the spike for a short time frame, because his tweets always come to naught. I've been coining money doing it, I just watch that premium melt away with scarcely veiled amusement. Swinging for the fences is for suckers [me, for a long time]. Those little gains really add up — $2k per week of evaporated premium and you could actually buy a Tesla by the end of the year!!
zeroxzero
Phil, I have the SRS 2011 $7.50 short puts you recommended awhile back. I sold them for $2.20 and now $1.51 (up 31%) although SRS has been down since inception. This was a nice mellow way to play it like you said, thanks.
Jomptien
What a great post today, Phil. A veritable feast of ideas! I've been reading your posts for years and have modeled my whole trading style after yours. You should be taking 2 and 20 off of me at this point ????
Jablams
I am about 1000 hours into learning about investing. While, I have tried other websites along the way, they don't teach or focus on selling premiums and certainly don't have your mindset. Anyway, I have a lot to learn and look forward to the new portfolios. So, thank ALL of you for being patient and teaching others how to "Be the House and not the Gambler"!
GrassHopper67
New members – a word of advice: you should check out the track record of Phil's last few trades of the year, and what the return would be if you just rolled all the gains into the next years trade of the year. Remember – trade of the year is one he's virtually sure of, and he rarely misses on those
Deano
I really would like to meet all of the posters here who seem like an intriguing bunch of intelligent, opinionated (without being obnoxious or condescending most of the time), and well spoken people. Not so easy to find in this age of instant gratification and me first attitudes. Usually this results in groups where misinformation is used to gain an advantage, or whatever it takes to beat the other guys. I love the one for all, all for one vibe here, sharing your best ideas and helping each other work together for a common goal, to be successful investors!
craigsa620
Man, what a week: Bought C at 1.40, sold half at 1.59 (relatively big position), another quarter at 3.04 just now. Ran SKF down from 270 with one April put, still holding some 115's expiring in a couple days. I'm going to gamble this position like a champion Friday. Bought FAS at all sorts of levels and started cashing out. Long HOV, stock and some nickel calls for fun - Mocha up your buy-out from 5 to 8 and that's 10,900% return for the May-2.50's . Ha!
Biodieselchris
I cannot believe the success I have had in the last 6 months because of what I have learned here! It has been truly life changing. It's like the old adage about teaching someone how to fish instead of just giving them a fish. Thank you Phil, I am forever grateful and hope I have helped someone else along the way.
Craigsa620
Phil, I just wanted to say thanks for being there. The world needs more of you. Your site continues to positively change my life daily.
Chasw
Hi Phil, Thanks for the free disaster hedge ideas. I implemented variations of two of them on SDS bull call spreads and EEM bear put spreads (haven't done the TZA yet) and they really hedged my short term longs nicely today. Makes it seem a lot less like gambling. You are the man (of the people)!
Howard Roake
Phil - Another excellent teaching article - when you write like that it blows me away. Thank you! I had the ideas from earlier articles but what I didn't have was enough understanding. The familiarity of ideas through repetition, re-working, revision - over time - the variation, the pulling out of implications - it all contributes to understanding and mostly thats on the student - but a good teacher (worth their weight in gold) makes understanding a pleasure. I wanted to learn about trading options because it makes my brain feel better - fitter, healthier. Actually mostly it makes me happy to think about the trade and trading options. You are a good teacher and I know that or I wouldn't value the subscription the way I do. It pays for itself through the pleasure of understanding alone.
Redfern1
I thank you for the years of being my teacher, always took the time to answer my questions. You are the BEST !
QCMike
I have been here for 8 yrs, and find it the best service out there. There are more eyes on the market in this forum than anywhere, and opinions abound. So, relax, and let the group help you out.
Pharmboy
Why were the analysts wrong? If I were a Japanese investor who purchased US stocks prior to November at Y80 yen to the dollar, with the US market up an average of 15% or more and upon selling the asset I covert dollars to Yen, also realizing an additional 25% gain (one dollar now converts to 100+ Yen rather than the 80 I used at time of purchase), I think I would be unloading US assets also. But analysts never do the math in their articles nor very rarely bring up or discuss the ramifications of currency fluctuations. I don't include Phil in this group as this is a valuable lesson I am learning from him.
Denlundy
GIVE THANKS/PHIL Have not done my 10,000 hours, but a couple of years at PSW, and moved from fishing with a single line to owner of a commercial trawler (metaphorically speaking). Now I fish with many lines. It is amazing when you go over the same information time and time again, eventually it clicks. Like planting trees; being the house, 20% sale items, selling into the excitement. and patience. I just sold an AAPL Jan 12 340/390 BCS financed by the sales of Jan 12 275 Put. The trade was put on one year ago for a net credit and exited five minutes ago for a 49 dollar per contract profit. No point in waiting till opex to see what happens, and I will just sell 10 of those VLO puts to make myself net the round 50. I no longer worry about opex coming as I have adjusted well in time for most positions that go against me. I still make some howlers (RIMM, TBT, TRGT) but I play the percentages and my winners outdistance my losers by many miles. I would never be in this position if it were not for Phil. He is a treasure, pure and simple. The goose that lays the golden egg if we care to listen and practice. Phil, a mighty big thank you.
Winston
Have been a member for about 6 months or there abouts. Signed up for a quarter at first and then for a year. To me, and it's only my opinion, it's an investment and I have made the membership fees back many times over on the strategy advice. Since joining and implementing the strategy of buy/writes and hedges I have cut my portfolio losses for the year and have a really good chance of going positive this year. If I would have continued down the road I was on, I would still have been fumbling around without a strategy and completely inept in what I was doing. I feel now the strategy is working and I am far more comfortable with the risks I am taking. I still have a lot to learn but I feel the fees have been one of the best investments I have made. The returns have been fantastic. Still have problems with the politics but hey nobody is perfect
DKGuy
Phil- great call in oil this morning! Now that Im no longer studying and am back in the real world I can only check this in the morning, at lunch, and after work. Anyways, you've been killing it on oil ( even more than you usually do) so I made a point to wake up extra early and made .25 off your ‘buy oil if you're brave'recommendation. It's nice to wake up and scalp 100+ bucks before I even start my real job. You lay those golden eggs everyday Phil! I thank you for that!
Jromeha
Thanks Phil for all you do. I feel like I don't read all the newsprint because when I check in with you I know I get the "real" scoop. Your service is number Uno in my book for all the knowledge and teaching. I ignored the aapl spin and am now enjoying some rewards. Every AM I get my Phil fix and throughout the day any important links. Mucho gracias. It leaves me time for my volunteer work besides the investing.
Pirateinvestor
I have followed along with your commentary and alerts and have been flabbergasted at your quick analytical skills and your journalistic skills to explain it clearly. In a little over three weeks I have cleared almost 1000.00 dollars and got an intensive education at the same time. I would like to immediately upgrade my membership.
TokyoLife
Nice intraday trading calls this week Phil. You have me hooked on trading SPY options analogously to your DIA moves. I paid some tuition the last few weeks but I think I have the hang of it. Don't be greedy and be happy with 0.05 to 0.10 and sometimes you're lucky with much bigger moves. Thanks for the training!
TmDecay
Oxen (directly) and Wilkinson (indirectly) are making me a great day trader! Props to Andrew for another little nugget last night: HIG. $20 Dec calls paid 6% quickly this morning. And helloooo STJ - a few days, but nice pick nonetheless - esp with early cover premium.
Dstillwe
PSW AC Conf: For those who may be on the bubble, I attended my first PSW LV in November. It was a real eye-opener. What I accomplished in a couple of days of exposure to Phil, Pharm, Craig, et al made my previous couple of years of hanging around the web site seem silly. If you are inclined in the slightest, you really should go. Just rubbing shoulders with other PSW members proved to be really valuable. Strictly on the basis of value, it's a great deal. You will have real time conversations with Phil and the gang and they will get to your questions and agenda items.
Mjjwo9b
WISH TO EXTEND A BIG THANK YOU! I netted about $18,000 on the short Jan puts and the annualized ROI/M is mind boggling! Hope to meet you some day and buy you and your significant other a nice dinner. Best Regards Newt
Newthugger
I like the retirement picks too. The futures trading is certainly more sexy, but the boring retirement picks are the ones that consistently make me money.
jjennings
by ilene - May 2nd, 2010 4:24 pm
Courtesy of Edward Harrison at Credit Writedowns
I have written a number of posts which point to a shift in the center of power on Wall Street from the client-facing advisory business to the market-making trading business. I think understanding this shift is vital to understanding what caused the financial crisis and to understanding the defense that Goldman Sachs has proffered for its actions in the Abacus AC1 deal.
What has happened is that major international investment banking groups have taken on a sales & trading ethos of caveat emptor where once the client was king. In my view, this is a direct result of the rise of securitization, structured products and derivatives as a profit center in financial services and is the major contributor to Wall Street’s new unfortunate public image as a casino.
I took on different aspects of this shift in these posts:
I suggest you read them to get more colour on various aspects of Wall Street culture which have eroded the ethics of bankers and led to self-preservation over client-focus.
Here’s the statement in all of those posts I want to dwell on. It came in my post on Goldman’s earnings announcement from July of last year. I wrote:
The Goldman press release is here. What I find notable is the order in which the press release presents the earnings, with a statement on the advisory business first, followed by equities and then fixed income even though fixed income was where the most revenue and profit came. That is revealing – and shows Goldman execs still consider the advisory business of relatively more importance from a reputational perspective. (emphasis added)
Reputation is one thing, reality is another. Former banker turned journalist Bill Cohan gets at the heart of this in his recent blog post "Goldman: Still Greedy, No Longer Patient." He writes:
Once upon a time, Goldman Sachs’ raison d’etre was to serve the ongoing needs of
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by ilene - February 23rd, 2010 2:23 pm
Courtesy of John Carney at Clusterstock/Business Insider
Today’s bleak consumer confidence number is undoubtedly bad news for the economy. The bigger than expected drop suggests that consumers have lost confidence in the recovery, which will drive down home prices and consumer spending.
Consumer confidence is typically our "first look" at the state of the economy. While most government aggregated data come out with a two-month lag, or more, consumer confidence hits with just a one month lag. Studies have shown that consumer confidence is a good predictor of consumer spending numbers. Basically, people surveyed seem to be good at accurately reading their own economic situation, and those surveyed accurately reflect the broader economy. When consumer confidence drops to such deep unexpected levels--today’s were the worst in 27 years--then it is a flashing red-light about the economy.
There wasn’t anything good about today’s numbers. Every part of the survey was awful. On jobs, the optimistic folks who say jobs are plentiful fell to 3.6 percent from 4.4 percent. The pessimistic people who said jobs are hard to get increased to 47.7 percent from 46.5 percent. The gauge of expectations for the next six-months fell to 63.8, from 77.3 the prior month. The share of people who believe their incomes will increase over the next six months fell to 9.5 from 11 percent. The share of those expecting more jobs fell to 12.4 percent from 15.8 percent.
The message: the economy sucks.
The recovery we were supposed to have.
You’ll read a lot about how the consumer confidence numbers are a lagging indicator. Indeed, they are a lagging indicator when measured against the stock market. The real time data conveyed by the stock market is often a better indicator than any survey or government data. But that doesn’t mean you shouldn’t pay attention to the consumer confidence number, especially since stocks have declined for most of this year.
Lets be clear here. The story-book recovery was dependent on a recovery of the consumer and a decline in the saving rate. If consumers lost some of their apprehension about future income prospects and future employment, they might begin to spend more on both retail goods and to purchase homes again. Anticipating this return of the consumer, businesses would increase capital spending and inventory.
We got half of that equation. Business spending…
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by ilene - February 20th, 2010 8:33 pm
Courtesy of Vincent Fernando at Clusterstock/Business Insider
ETFs bill themselves as low-cost alternatives to standard mutual funds or even hedge funds. The idea is that their management fees are lower and trading costs are low since you can simply buy and sell them easily through a discount online broker.
But here’s the problem -- it’s only true if ETFs are actually tracking their benchmarks effectively. Unfortunately they aren’t.
In 2009, ETFs missed their targets by an average of 1.25 percentage points, a gap more than twice as wide as the 0.52-percentage-point average they posted in 2008, according to a study of ETF returns released this week by Morgan Stanley.
Part of this so-called tracking error stems from the recent proliferation of ETFs targeting exotic investments or areas where trading is less frequent, such as emerging-market stocks and junk bonds.
Last year, 54 ETFs showed tracking errors of more than three percentage points, up from just four funds the prior year. And a handful of the 54 missed by more than 10 percentage points.
1.25% is more than the management expense of some actively managed funds, or some hedge funds even (before performance fees).
We think ETFs are great for tracking broad, liquid benchmarks such as the S&P 500 where they are likely to be worthwhile in terms of cost and trading ease. But ETF products for niche investments are highly suspect. The more illiquid investments the worse off ETF investors will be, especially since savvy traders will likely be able to line up and pick-off trades ahead of the ETF.
For anything niche, investors are probably better off with old fashioned mutual funds once all of their real expenses are factored in.
Yet we’re fully aware of the fact that expenses of an ETF such as the above are near-invisible, especially if someone is been trading in and out of an ETF. So we’ll expect investors to keep lapping these products up. In investment management, products with the least visible expenses, and best ability to avoid blame, win.
(Tip via Abnormal Returns)
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by ilene - February 8th, 2010 11:39 am
Courtesy of Joe Weisenthal at Clusterstock/The Business Insider
What are banks doing with the billions upon billions of dollars they’ve taken from the taxpayer?
The St. Louis Fed has just updated its latest data on bank health and activity, and the charts paint a great picture of what’s really going on in our banking system.
The bottom line: lending is still tanking (unless you count lending to the government)
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by ilene - February 2nd, 2010 1:13 pm
Courtesy of Vincent Fernando at Clusterstock/Business Insider
Anyone who thinks that the business of derivatives ended with the financial crisis had better check out the recent trading volumes released by the derivatives exchange company CME Group.
Just this January, total derivatives trading volume shot up 19% year over year, with particularly feverish activity in interest rate derivatives (for fixed income, Up 33%), foreign exchange derivatives (Up 78%), and metals derivatives (Up 65%).
Traders are loving derivatives like never before:
Also, keep in mind that CME Group just began clearing infamous credit default swaps (CDS), which comprise an enormous market for further trading growth. The sky’s the limit, until it comes crashing down again.
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by ilene - January 25th, 2010 8:31 pm
Courtesy of Jesse’s Café Américain
Here is an interesting chart that shows the ascendancy of the financial sector in the US.
Commercial banking is largely an administrative function, with a few highly paid decision makers, and many lower paid functionaries and clerks that make a decent if unspectacular wage commensurate with a utility function.
Starting with the Reagan privatization revolution, the finance sector began to grow in importance, moving from a utility serving the capital distribution and storage needs of the real economy taking a relatively small percentage of real output, to a dominant force in the national decision making process, controlling the allocation of capital through its powerful influence and lobbying in Washington, placement of its supporters in political positions of power, and the consolidation of the mainstream media into an oligopoly of four or five major corporations.
Now we have a financial sector dominated by a relatively few number of multinational corporations that are certainly not utilities serving the productive economy. In reality the big multinational banks have become hedge funds speculating in a broad range of markets, often in competition if not contrary to the interests of their customers, relying on other people’s money for capital to sustain an outsized leverage and a steady stream of rents and speculative winnings, and to cushion any losses in the event of the occasional market downturns.
And if we do not give the banks their demands, if we do not maintain the status quo, then they threaten that they cannot protect the world from financial ruin and a collapse of the money system, which they themselves control. And this is no mere extortion, no corruption of a single party or person, but the foundation of an enduring modern tyranny.
“Single acts of tyranny may be ascribed to the accidental opinion of a day; but a series of oppressions, begun at a distinguished period and pursued unalterably through every change of ministers, too plainly prove a deliberate, systematic plan of reducing a people to slavery." Thomas Jefferson
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by ilene - December 27th, 2009 1:05 am
Courtesy of Henry Blodget at The Business Insider
This includes retirees who did exactly what they were supposed to do--save. Their incomes are now getting clobbered.
Meanwhile, for those who prefer to borrow money, the ongoing bailout has created the world’s easiest way to make $1 billion. Borrow short-term from the taxpayers and lend the same money back to the taxpayers--and get a guaranteed risk-free spread.
Here’s Bill Gross:
“What the average citizen doesn’t explicitly understand is that a significant part of the government’s plan to repair the financial system and the economy is to pay savers nothing and allow damaged financial institutions to earn a nice, guaranteed spread,” said William H. Gross, co-chief investment officer of the Pacific Investment Management Company, or Pimco. “It’s capitalism, I guess, but it’s not to be applauded.”
Mr. Gross said he read his monthly portfolio statement twice because he could not believe that the line “Yield on cash” was 0.01 percent. At that rate, he said, it would take him 6,932 years to double his money.
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by ilene - December 20th, 2009 11:40 am
Arnold Kling explains why our political leaders won’t break up the Too Big To Fail banks:
My answer to both relates to what I call the Harvard-Goldman filter.
The Harvard-Goldman filter works like this.
1. To get into a position of power, you have to pass through a filter. The easiest way to show that you can pass through the filter is to go to Harvard and then work for Goldman.
2. If you do not go to Harvard and work for Goldman, then you have to show that you can get along with people who did.
3. The best way to show that you can get along with people who pass the Harvard-Goldman filter is to show that you believe in applying the Harvard-Goldman filter.
Why was Tim Geithner regarded as such an obvious, in fact necessary, choice to be Treasury Secretary? Because he satisfies the Harvard-Goldman filter, particularly point (3). He is not going to bring people from the wrong social caste into the policymaking arena.
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by ilene - December 7th, 2009 1:40 pm
Two articles on collections of second mortgage debt being attempted, prior to resolution of the first mortgage. 
Normally, first mortgages have priority, but it appears owners of second mortgage obligations – debt collection agencies – are cutting ahead and demanding payback early and then using questionable tactics to accomplish their goals (e.g., filing suit without giving notice). – Ilene
Decency, security, and liberty alike demand that government officials shall be subjected to the same rules of conduct that are commands to the citizen. In a government of laws, existence of the government will be imperiled if it fails to observe the law scrupulously. Our government is the potent, the omnipresent teacher. For good or for ill, it teaches the whole people by its example. Crime is contagious. If the government becomes a lawbreaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy. Justice Louis Brandeis
By Vince Veneziani, courtesy of Clusterstock
Housing Doom: Josh Zinner of the Neighborhood Economic Development Advocacy Project in Manhattan said some lenders or trusts for banks that went out of business are selling off second mortgages today to debt collectors for pennies on the dollars. Those debt collectors are then going after the homeowners’ bank accounts or pay checks to recoup whatever money they can.
And if a bank or debt collection agency goes after you, for god’s sake, respond to the complaint in a timely manner:
Perhaps in part because they are not notified, people sued in New York City often fail to appear in court to protect their interests, according to a study released last year by MFY Legal Services, a nonprofit law firm in New York.
MFY found that just seven law firms filed nearly one-third of all the cases seeking to collect $25,000 or less in
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by ilene - November 27th, 2009 12:05 pm
Good morning! Hope everyone had a great Thanksgiving. – Ilene
Kian Abouhossein at J.P. Morgan delivers some excellent insight into the Dubai crisis. The wealthy UAE will be able to easily bail out Dubai if need be, this time. It just might not be so optimistic to do so in the future.
We are less concerned for global banks about Dubai World’s direct $59bn outstanding debt exposure with $4.3bn due to mature in Dec-09 and a further $4.9bn in 1Q10, considering “only” $13bn of syndicated loans across global banking sector based on Dealogic data. Assuming a 10% “hold” strategy, the most exposed banks would be RBS with $0.23bn, DB and CS with $0.17bn each.
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The view from our MENA team is that this event reflects cash flow challenges rather than refinancing ability. They believe that obligations on Dubai World and its property unit Nakheel PJSC are likely to be fulfilled at the new May 2010 earliest repayment date, and that Dubai should be eventually be able to fulfill its debt obligations maturing in the short-term ($4bn in Dec-09, relating to Dubai World, and $9 to $10 in 2010) with continued Abu Dhabi support. Abu Dhabi is strong financially with fiscal and current account surpluses, ~$150bn in FX reserves and a ~$300bn sovereign wealth fund. However it seems that Abu Dhabi will no longer be happy to underwrite all debt, and rather will differentiate more strongly between supporting Dubai’s strategically important assets (such as DEWA, and Dubai Ports), and the non strategic assets – hence the concurrent timing of the Dubai World debt restructure and the Abu Dhabi underwritten government of Dubai debt raising.
Here’s one rough measure of relative bank exposure to Dubai, based on Dubai World syndicated loans since 2007. Overall, JP Morgan believes the exposures are relatively small compared with the major banks involved.
Here’s probably a better estimate of relative exposure, by loans made to the UAE as a whole. The amount of direct loan exposure to Dubai specifically, within this UAE-wide figure, are apparently very difficult to know.
Conclusions for some of the major banks exposed:
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Overall
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July 18th, 2019 1:49 am
Brexit: wisdom of crowds proves effective predictor of Britain's chaotic EU departure
Courtesy of Aleks Berditchevskaia, Nesta and Kathy Peach, ...
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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