It is amazing how much confidence you engender, Phil………..I knew the 1% a day trades and repeated often were possible as I had done in stretches, and I knew kill zone trades were also possible and 5% to 10% returns per month were very possible with practice, experience and smart risk management all without having to take a lot of risk, but I guess I was talking to the disbelievers and since I have dropped them into my 'why bother to try to explain it' file and come over to the dark side at PSW I feel soooo much more content not only with the returns, but with the company and a comments and the obvious opportunity to learn and learn and learn some more.
It all helps the mental and emotional discipline of the trading too. So thanks again.
Roro
Thanks super helpful re: UGN example…..other inflation/market-correction-defensive-related play you threw out that has jammed UP in less than a month is TITN 6/14 $15 puts, up 40%. Excuse my enthusiasm but haven't had those types of gains in multiple plays in years let alone days doing it on my own…….maybe I should host the PSW infomercial!!!!
stevegeb200
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
Phil/CLK4 – Perfect! Saw the answer 1 min after my post…out with $740 on two contracts. Thanks again for the education.
Jeffdoc2004
All I can say is — I understand that the Universe sent me to PSW for a reason. So, I'm listening!! …and studying. Your commentary is literally outstanding. …and your members are impressive as well.
Seaquill
Thanks to Phil (again) for the lessons on the art of the roll, selling premium and hanging tight under fire (particularly in the first hour of trading-MADNESS). Watching you manage the $25KP has really helped my trading in a big way.
Oknoman
Phil has some great insight into the market. He's given me a different perspective on the market and I know I'm a better trader/investor because of it.
I've been trading options since the late 80's and Phil is right. Unless you know what is going to happen (how can you, unless you have insider information), then do what the smart money does - be the house. Remember guys, we're allowed to sell options. If you're afraid to be short, then do a spread to limit your liability. When I think about the money I've made and lost on options, a good approximation is that I win 30% of the time when I do a straight buy; I win about 70% of the time when I do a spread; I win nearly 90% of the time when I sell naked.
Autolander
Phil, I don't know if I told you lately but you da man! I'm doing so much better following your guidelines. It's like you actually know what you are talking about. 8-) I've tried a lot of services and none of them are as comprehensive or honest AND successful. I appreciate all youz other guys/gals input as well…learning tons as a relative newbie to this game.
Aclend
Sold the BG puts I got yesterday at $1.30 for $2 just now. Might be a little early, but I'm happy with that gain. Thanks Phil.
Smasher
Phil / TNA – On Monday you put out the TNA BCS 41/47. As I mentioned I work during market hours so on Tuesday morning on my way out the door (premarket) I put in an advanced TOS '1st trigger sequence' order to fill the BCS. I can control the entry using this method vs. the vertical entry that TOS allows for the BCS. I filled the June 41 long call but never filled the 47 short call. I let that ride into today. OMG ..TNA popped 7.5%!… the $3.60 entry is almost a double! Tomorrow will be a OCO bracket to get out of TNA before Ben speaks. I should be able to preserve 85% – 100% on the trade. For the income portfolio plays in my IRA's, doing very well… I do like collecting premium! Well done and thanks!
JFawcett
Phil - I caught the interview…. terrific!. Your host recommended that the viewers should " go to your site, as you will be entertained ". That is for sure if you consider entertainment is laughing while you read, learn and make unbelievable leveraged profits that you never thought were possible. That is my kind of entertainment !
Gel1
I remember that call (to sell gold at $1,850) as well... and the many Buy-Writes that were created on your site during that period... thanks to you, I had an average ROI of close to 70% for over 2 years, averaging 4,000 trades per year. Busy trading, but lots of fun and memorable trades.
1234gel
Great call on expe Phil! Went long 50 shares and sold for a nice profit! And Great call on the nkd shorts as well. I didn't use a stop that tight and was able to cover for a $400 gain. Works been keeping me pretty busy and I'm jealous of all the members who are able to check in here more often! It's almost always quite profitable! Looking forward to Vegas!
Jromeha
Phil, you are the man. My positions in ABX and CLF are up massively this year, and doing very nicely with USO and UNG. TSR is another winner. Just waiting for the TSLA short now!
Rookie IRA Investor
Phil - I LOVE these futures trades at random hours! I wasnt able to get in on the 612 part but if I had it wouldve been 130$ (2.6%) on a 5k contract in less than 30 minutes. I know you have to sleep, spend time with fam, ect but Im just letting you know that your posts after hours/late at night has made people who followed them a decent chunk of change. Thank you, we appreciate it!
Jromeha
Hey Phil – I ignored your call to sell those AAPL $580s for $1 so not sure whether to thank you or not (just kidding) for my $5 winner. Actually I want to thank you from the bottom of my heart, that was an uncanny call.
TheChaser
Phil/Everyone here/Thank you - What everyone here with their insightful comments (including yourself) has helped me with is that I'm greatly increasing my ability to trade more psychologically neutral, although I've got a ways to go. Two years ago I'd wake up early and my heart would race if futures weren't pointing exactly how I wanted… I've noticed an exponential leap in my discipline skills especially over this past two weeks. The old me would have ran with that trade for profits without even asking. Now I know that there are ALWAYS more trades and that I have PLENTY of options to turn a bad trade even. Also, it's more logical and less emotionally draining which lets me focus my faculties on my wife, college, my job, and studying for the ol' Series 7. Would it be safe to say that one of the most important skills to develop is the ability to adjust? I'd love to get to the point where I can look at a bracket and know, for example, what I need to sell for cover in what month in order to get my desired results. Both COF and my past DMM venture have been excellent learning experiences. Thanks, everyone. I look forward to further lessons.
Skasiah
Phil – BTW, the new STP/LTP coupled with the income portfolio is Perfect! I do not trade all of them, very few actually since I work during market hours. However, following the trades real-time is very educational.
I did enter the ABX call if you recall, I rolled to July on that nonsense news that sent it tumbling. Out today for 110% gain (2.00 stop) not counting covering the loss from the earlier roll. Nonetheless, a good trade.
Keep it up…. Thanks
JFawcett
Phil/ et al- Thanks for the answers to my spread questions last night, as I really needed that little piece of knowledge to crystallize my understanding of spreads. Your help is much appreciated and I have been doing really well for the last couple of months with fewer and fewer missteps as I embrace the PSW ways and watching my portfolios grow.
Craigsa620
Happy holidays to all members of PSW. Just completed my 6th year and still my favorite site to read. Thank you all for your contributions and support especially you, Phil!
DClark41
Every time I read Mr. Davis' market analyses and reports about his super profitable trades I feel admiration mixed with envy for the overall brilliance of this man, intellectual and verbal, his extraordinary savvy in the exotic art of options and, last not least, his moral passion with which he writes, even if in passing, about the darker aspects of capitalism.
RussianBear
Phil thanks. You never cease to amaze me with your thoughtful perspective on a myriad of different issues and challenges. It's kind of an embarrassment of riches since I joined this board a few years back. The ride from Dow 9,000 or was it 8,000? up to Dow 15,000 seems hard to believe. I wish I could have it all over again, except with the capital I have now.
Winston
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
Phil.... I remember back in March of '09, you stated " Unless you think the country is going to hell in a hand-basket, NOW is the time to do your buying". Do you remember ?
I took your advice, and bought leap $2.00 calls on F, approximately 200,000 shares using the options, for just pennies. Now that was the best Ford I ever owned.... made over $1 mil - thanks go to you Phil. I now drive a Mercedes but still "love" the Ford.
1234Gel
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
This is my first month here. Today was a money train with futures. I gained 7500 USD with KC, RB, CL, NG.
I took RB almost every direction up and down. And I only used 1 contract or maximum 2.
Thank you. I think it was a good investment to subscribe…
Kgabor
WOW, glad I went bearish… Phil, thanks for the help on the QID calls yesterday, I turned it into a partial cover rolling down to the Feb 52s selling the 55s 1/2 covered. Sold 1/2 and now lowered my cost basis to $4.38 on the $52s (fully covered).
Texasmotion
thanks for the DNDN recommendation last week phil. that was moneeeee….
Kwan
I must give kudos to Phil for changing my way of thinking. I'm a gambler by nature and used to just play the indexes with 3x etf's… well I still do, but the options give far better returns than I ever dreamed of. With these wild swings I've been catching 50-100% winners in days.
Mkucstars1
Gel1…..I've been here 6 months, mostly watching and learning. Lots of smart people on the site and I've learned a lot from Phil and many others. //// Inflan - I have to trump your sentiments regarding the wisdom of the board. I have to thank Phil and the many contruibutors for a 80% profit for 2009. I have learned a lot and am still learning ( even occasionally about political issues - ha! )
Positive feedback loops soon reach the runaway/self-destruction stage. Concentrations of wealth and gaming-the-system are reaching just such levels.
Positive feedback loops lead to runaway scenarios. The classic example is global warming and the Arctic ice cap. As temperatures rise, the the ice melts, exposing more land or seawater. Ice reflects solar radiation, and so as it shrinks then more solar radiation is absorbed, raising temperatures more, which melts the ice faster, which then leads to more solar radiation being absorbed, and so on.
The runaway feedback loop leads to the disappearance of the Arctic ice and a much warmer planet.
Nature has multiple feedback loops, and so the solar radiation flux may be acting to reduce temperatures as the positive feedback of melting ice raises temperatures. But the point is that positive feedback is self-reinforcing and it speeds up processes as it gathers momentum.
We can see runaway feedback loops in the economy and society, not just in Nature. One of the key runaway feedbacks in the U.S. is the concentration of wealth and political power.
As wealth has become concentrated in the top 1/10th of 1%, then the political power that can be purchased with that wealth also rises, which then enables the wealthy to increase their wealth via "Federal entrepreneurship" and other means.
The political process--once potentially a force resisting or moderating wealth--has been completely captured by an ever-expanding army of lobbyists, the fast-spinning revolving door between the Central State and corporations and unprecedented levels of corporate/Elites campaign contributions.
The judiciary, theoretically a force which could have resisted this concentration of wealth and political power, has also been co-opted by a marriage of ideology and wealth/power. Thus the courts have gutted every attempt at limiting corporate/insider influence over the processes of governance; the courts have enabled corporations to have the "right to free (paid) speech" unburdened by the obligations that go with such rights.
The wealth/power feedback has reached runaway levels. "Reforms" are gutted in backroom deals, votes to benefit the banking/mortgage/foreclosure industry are done on voice calls to evade public scrutiny, and a thousand other games and tricks are played daily to subvert the common good for the benefit of the few and their armies of technocrat toadies.
The other positive feedback loop approaching runaway levels is the Entitlement/Welfare State, both…
Vanity Fair’s Introduction: As Wall Street hangs on the question “Will Greece default?,” the author heads for riot-stricken Athens, and for the mysterious Vatopaidi monastery, which brought down the last government, laying bare the country’s economic insanity. But beyond a $1.2 trillion debt (roughly a quarter-million dollars for each working adult), there is a more frightening deficit. After systematically looting their own treasury, in a breathtaking binge of tax evasion, bribery, and creative accounting spurred on by Goldman Sachs, Greeks are sure of one thing: they can’t trust their fellow Greeks.
After an hour on a plane, two in a taxi, three on a decrepit ferry, and then four more on buses driven madly along the tops of sheer cliffs by Greeks on cell phones, I rolled up to the front door of the vast and remote monastery. The spit of land poking into the Aegean Sea felt like the end of the earth, and just as silent. It was late afternoon, and the monks were either praying or napping, but one remained on duty at the guard booth, to greet visitors. He guided me along with seven Greek pilgrims to an ancient dormitory, beautifully restored, where two more solicitous monks offered ouzo, pastries, and keys to cells. I sensed something missing, and then realized: no one had asked for a credit card. The monastery was not merely efficient but free. One of the monks then said the next event would be the church service: Vespers. The next event, it will emerge, will almost always be a church service. There were 37 different chapels inside the monastery’s walls; finding the service is going to be like finding Waldo, I thought.
“Which church?” I asked the monk.
“Just follow the monks after they rise,” he said. Then he looked me up and down more closely. He wore an impossibly long and wild black beard, long black robes, a monk’s cap, and prayer beads. I wore white running shoes, light khakis, a mauve Brooks Brothers shirt, and carried a plastic laundry bag that said eagles palace hotel in giant letters on the side. “Why have you come?” he asked.
We are currently in the midst of a Fourth Turning. This twenty year Crisis began during the 2005 – 2008 timeframe with the collapse of the housing bubble and subsequent repercussions on the worldwide financial system. It is progressing as expected, with the financial crisis deepening and leading to tensions across the world. It will eventually morph into military conflict, as all prior Fourth Turnings have. The progression from High to Awakening through the Unraveling took from 1946 until 2006. The most treacherous period of the Saeculm is upon us. The intensity of a Crisis is very much dependent upon how a country and its citizens prepare for the Crisis during the final years of the Unraveling. The last Unraveling period in U.S. history from 1984 through 2005 was symbolized by Boomer greed, materialism, debt and selfishness. When Michael Lewis graduated from Princeton University in 1985 and joined Salomon Brothers, I’m sure he didn’t realize that he would end up book-ending the Unraveling period in his two best-selling books about Wall Street.
In his latest book, The Big Short: Inside the Doomsday Machine, Lewis seems bewildered by the fact that his first book Liar’s Poker, written in 1989, didn’t dissuade college students from pursuing careers on Wall Street. If Lewis had read The Fourth Turning by Strauss & Howe when it was published in 1997, he would have understood why the people on Wall Street couldn’t change. The generations were just acting out their part in a grand never ending cycle. Lewis explains what he thought would happen:
“I stumbled into a job at Salomon Brothers in 1985 and stumbled out much richer three years later, and even though I wrote a book about the experience, the whole thing still strikes me as preposterous—which is one of the reasons the money was so easy to walk away from. I figured the situation was unsustainable. Sooner rather than later, someone was going to identify me, along with a lot of people more or less like me, as a fraud. Sooner rather than later, there would come a Great Reckoning when Wall Street would wake up and hundreds if not thousands of young people like me, who had no business making huge bets with other people’s money, would be expelled from finance.”
Apparently if it weren’t for the book The Big Short, the Senate wouldn’t ever have held a hearing on Goldman Sachs with anything.
POLITICO has reports of Michael Lewis’ book, which was about those like Paulson and one desk at Goldman and basically every bank who made billions off the financial crisis, being mentioned 15 separate times in public settings by politicians.
Before they read it, they had no idea what any of this "CDO" business was. The book breaks it down so simply, say the Senators, that they recommended it to everyone, even their spouses, and everyone was shocked about what happened.
So in a weird way, this girl, Anna Katherine Barnett Hart, who inspired Lewis’ book with her senior Harvard thesis and is now at Morgan Stanley, is a big part of why got Goldman charged.
Way to write a thesis that really shakes things up!
But Lewis nails it when he says that anyway, their obsession with his book is a little disturbing.
“When senators are reading your book, it reaffirms your faith in society, on the one hand… and, on the other hand, it makes you nervous, because I don’t think of myself as advising people who are actually going to change things.”
So if you or your firm is mentioned in Lewis’ book, watch out. Senator Kaufman said reading The Big Short was like watching a horror movie so, if you’re on this list … you’re next-->
Regular readers know that I’m both a fan and a practitioner of the ‘Satirical Arts’. Michael Lewis has a devastating op-ed up at the New York Times entitled Shorting Reform that just manages to skirt the line between outright fantasy and the actual current psyche of Wall Street’s lobbyist corps…
To: Wall Street chief executives
From: Your man in Washington
Re: Embracing the status quo
Our earnings are robust, our compensation has returned to its naturally high levels and, as a result, we have very nearly regained our grip on the imaginations of the most ambitious students at the finest universities — and from that single fact many desirable outcomes follow.
Thus, we have almost fully recovered from what we have agreed to call The Great Misfortune. In the next few weeks, however, ill-informed senators will meet with ill-paid representatives to reconcile their ill-conceived financial reform bills. This process cannot and should not be stopped. The American people require at least the illusion of change. But it can be rendered harmless to our interests.
To this point, we have succeeded in keeping the public focused on the single issue that will have very little effect on how we do business: the quest to prevent taxpayer money from ever again being used to (as they put it) “bail out Wall Street.”
As we know, we never needed their money in the first place, and by the time we need it again, we’ll be long gone. If we can keep the public, and its putative representatives, fixated on the question of whether their bill does, or does not, ensure there will be no more bailouts, we may entirely avoid a discussion of our relationship to the broader society.
Like him or hate him, Lewis nails this one. Get over to NYT for the rest.
Michael Burry always saw the world differently—due, he believed, to the childhood loss of one eye. So when the 32-year-old investor spotted the huge bubble in the subprime-mortgage bond market, in 2004, then created a way to bet against it, he wasn’t surprised that no one understood what he was doing. In an excerpt from his new book, The Big Short, the author charts Burry’s oddball maneuvers, his almost comical dealings with Goldman Sachs and other banks as the market collapsed, and the true reason for his visionary obsession.
In early 2004 a 32-year-old stock-market investor and hedge-fund manager, Michael Burry, immersed himself for the first time in the bond market. He learned all he could about how money got borrowed and lent in America. He didn’t talk to anyone about what became his new obsession; he just sat alone in his office, in San Jose, California, and read books and articles and financial filings. He wanted to know, especially, how subprime-mortgage bonds worked. A giant number of individual loans got piled up into a tower. The top floors got their money back first and so got the highest ratings from Moody’s and S&P, and the lowest interest rate. The low floors got their money back last, suffered the first losses, and got the lowest ratings from Moody’s and S&P. Because they were taking on more risk, the investors in the bottom floors received a higher rate of interest than investors in the top floors. Investors who bought mortgage bonds had to decide in which floor of the tower they wanted to invest, but Michael Burry wasn’t thinking about buying mortgage bonds. He was wondering how he might short, or bet against, subprime-mortgage bonds.
July 28 (Bloomberg) — From the moment I left Yale and started working for Goldman Sachs, I’ve felt uneasy interacting with those who don’t….
Thus, like many of my colleagues, I have adopted a strategy of never leaving Goldman Sachs, apart from a few brief, spasmodic attempts to make what you outsiders call “love” or “the beast with two backs.” Goldman recognizes how important it is for its people to replicate themselves. We bill no performance fees for the service…
America stands at a crossroads, and Goldman Sachs now owns both of them. In choosing which road to take, ordinary Americans must not be distracted by unproductive resentment toward the toll-takers. To that end we at Goldman Sachs would like to dispel several false and insidious rumors.
Rumor No. 1: “Goldman Sachs controls the U.S. government.”
Every time we hear the phrase “the United States of Goldman Sachs” we shake our heads in wonder. Every ninth-grader knows that the U.S. government consists of three branches. Goldman owns just one of these outright; the second we simply rent, and the third we have no interest in at all. (Note there isn’t a single former Goldman employee on the Supreme Court.)…
Rumor No. 2: “When the U.S. government bailed out AIG, and paid off its gambling debts, it saved not AIG but Goldman Sachs.”
The charge isn’t merely insulting but ignorant. Less responsible journalists continue to bring up the $12.9 billion we received from AIG, as if that was some kind of big deal to us. But as our CFO David Viniar explained back in March, we were hedged. Our profits from AIG “rounded to zero.”…
Rumor No. 3: “As the U.S. government will eat the losses if Goldman Sachs goes bust, Goldman Sachs shouldn’t be allowed to keep making these massive financial bets. At the very least the $11.4 billion Goldman Sachs already has set aside for employees in 2009 — $386,429 a head, just for the first six months — is unfair, as the U.S. taxpayer has borne so much of the risk…
Here’s an excellent read in Vanity Fair from noted author Michael Lewis regarding the madness that is AIG. His piece is entitled ‘The Man Who Crashed the World.’ There has been a slew of intriguing journalistic pieces hitting the tabloids lately and its refreshing to see. Just last week, we brought you Matt Taibbi’s piece on Goldman Sachs as well.
Below is the embedded AIG article. RSS & Email readers will need to come to the blog to view it. Again, our apologies for using Scribd as we know many of you dislike it. However, the other alternatives we have tried out have not been any better. As such, we are stuck using the lesser of many evils. If you need the actual .pdf of this article please let us know and we’ll do our best to meet all the requests (we were inundated with requests for the GS article last week and are still sifting through all those!) Don’t try to print the article directly from Scribd as it will mess up the margins and come out illegible. We recommend clicking on the Scribd logo, going to their page and selecting the ‘download’ option which will let you save the .pdf to your desktop. Do note that you’ll need a free account there to do this.
What is real can seem pretty arbitrary. It’s easy to be fooled by misinformation disguised as news and deepfake videos showing people doing things they never did or said. Inaccurate information – even deliberately wrong informatio...
What is real can seem pretty arbitrary. It’s easy to be fooled by misinformation disguised as news and deepfake videos showing people doing things they never did or said. Inaccurate information – even deliberately wrong informatio...
Gold has rallied extensively from the lows near $1560 over the past 2 weeks. At first, this rally didn’t catch too much attention with traders, but now the rally has reached new highs above $1613 and may attempt a move above $1750 as metals continue to reflect the fear in the global markets.
We’ve been warning our friends and followers of the real potential in precious metals for many months – actually since early 2018. Our predictive modeling system suggests Gold will rally above $1650 very quickly, then possibly stall a bit before continuing higher to target the $1750 range.
The one thing all skilled traders must consider is the longer-term fear that is build...
Gold and silver prices have been on the rise in early 2020 as investors turn to precious metals as geopolitical concerns and news of coronavirus hit the airwaves.
The rally in gold has been impressive, with prices surging past $1600 this week (note silver is nearing $18.50).
What’s been particularly impressive about the Gold rally is that it has unfolded despite strength in the US Dollar.
In today’s chart, we look at the ratio of Gold to the US Dollar Index. As you can see, this ratio has traded in a rising channel over the past 4 years.
The Gold/US Dollar ratio is currently attempting a breakout of this rising channel at (1).
Trans World Entertainment Corporation (NASDAQ: TWMC) shares climbed 120.5% to $7.72 after the company disclosed that its subsidiary etailz entered into a deal with Encina for $25 million 3-year secured revolving credit facility.
Celldex Therapeutics, Inc. (NASDAQ: CLDX) fell 39.8% to $3.1744. Cantor Fitzgerald initiated coverage on Celldex Therapeutics with an Overweight rating and a $8 price target.
Imagine you’re a fossil hunter. You spend months in the heat of Arizona digging up bones only to find that what you’ve uncovered is from a previously discovered dinosaur.
That’s how the search for antibiotics has panned out recently. The relatively few antibiotic hunters out there ...
With the coronavirus outbreak coinciding with the U.S. earnings seasons, it is only normal to expect companies to talk about this deadly virus in their earnings conference calls. In fact, many major U.S. companies not only talked about coronavirus, but also warned about its potential impact on their financial numbers.
Phil has a chapter in a newly-released eBook that we think you’ll enjoy.
In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.
This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.
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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Regular readers know that I’m both a fan and a practitioner of the ‘Satirical Arts’. Michael Lewis has a devastating op-ed up at the New York Times entitled 
Commentary by Michael Lewis
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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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