Phil: UNH, hedged stock position, doing great, up over 50 %,
RMM
It is hard to learn the process that Phil teaches, but it is worth the effort. I think it is finally sinking in & so I say Thanks teacher for your patience & expertise! I've had a very good week so far & I know it is because of persisting in this learning process that you teach.
Pirateinvestor
Thanks Phil another great week of guiding us!
Steven Parker
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
Fed days are fun! Just for grins I decided to see how much money I could make in two clicks. I bought DIA calls right when the surge started and then sold them the minute they hit my account. Net gain of 20% in 20 seconds. Can't do that very often…
MrMocha
I discovered PSW while reading up on the US economy and how it applies to all the poor folk of the world and to myself as a humble UK desk slave.
This year I put time into learning options trading. I upgraded (with great administrative difficulty!) my stock dealing account to deal options. Now I am an avid reader of PSW and subscribed for voyeur membership. Initially feeling out of my depth struggling to keep up with the peculiar language of options traders, I unsubscribed feeling a little under confident and uncertain if the small stake I have to invest in options could generate enough to justify my PSW subscription. Nevertheless, I've benefited considerably from the member's material. From a small number of initial trades, I've exceeded profit targets enough to consider re-subscribing in some capacity. Thanks for the knowledge and more than anything I appreciate the human angle, the humour and the ecologically sympathetic approach rarely seen in other financial media. Best wishes all - Jon
Jon
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
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
Thanks for the oil tip Phil: Bot & sold the USO May 29 calls for net $125. Not bad for few minutes work.
JWick1981
Phil - Moved today to send kudos. You're in my top 5 to see/read daily. I do not trade...
but as former econ-finance adjunct faculty near Stanford U. I give you lots of attaboys....
and provide your links to many to spread some understanding of the mess we are in. Best to you and yours,
HJ Kobbeman
CZR – well that was fun! Opened the play yesterday. As the arb premium was now almost all gone from the box spread today, I just decided to close it. The rundown, after all commissions: my net was $183.51 profit for an overnight trade tying up $2000 margin in an IRA account. That's a 9% overnight return (3200% annualized!) …And all that learning, too! Thanks PSW!
Scottmi
Thank you Phil we appreciate all the work you put in to teach us valuable lessons about investing.
Pat Swap
Aapl/Phil
Thanks for your advice, always appreciated.
So, not so much a tax issue, but more to protect against a 5% or greater drop.
Here is what I did before their earnings…sold 25% of my stock at 147.50
Against the rest, I sold the June $140 calls for $8.25, protecting down to $140 if needed.
And just for fun, I bought the weekly $145 puts for $1.50( small price to pay if they bombed on earnings)
So, overall, I am happy with the insurance I was able to 'generate' for 1% of the price of stock.
Now, depending on what happens, I have the luxury of deciding and being in the driver's seat with respect to whether to sell and buy your spreads or not.
Having done all that meandering, I must say it was fun!
More important, I could not have done something like that 2 or 3 years ago and reading and thinking about your teachings has been a tremendous asset.
Thanks!
Maya1
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! )
Iflantheman & Gel1
I have to thank you for excelling yourself during this past week. I have spent a good few hours going over your notes and comments and there are so many gems on repairing and rolling trades that I have been beavering away on paying special attention to my major positions and analysing them using your approach on Tuesday. Being able to look at a group of trades on the same underlying (in this case AAPL) and taking a detached view by assessing the impact of the underlying reaching different price points was extremely reassuring.
Winston
Nice call on the QQQ puts this morning Phil. I bought 10 at .13 this morning for fun day trade. Just closed at .95. Sweet hedge for the day!
RevTodd64
Against all prognostics (bears) Phil pointed in the morning the correct direction, and in middle of day he pointed the possible move to 2.5% Incredible… I'm starting to serious believe on the program trading and the human nature behind the programing those "trade-bots".
Spider
WOW!!!!!!!!!!!! How will I ever do anything else in my life that will compare to the wild ride you get trading an ultra etf in the most volatile sector in the stock market the day before option expiration?
Matt1966
As a retired stockbroker from a major Canadian brokerage firm, I can tell you I would never had access to these type of trade ideas, especially the hedges.
Just closed out a July TZA 40/45 call spread today for a 271% gain in less than a month. I would have normally let that run but yesterday Phil commented to another member something to the effect that "you put down a $1 for a $5 upside, now that you are up 250% you have $2.5 in and you are hoping for a double."
Just closed out a USO July $38 put that Phil suggested yesterday for a 49% one day gain.
Thanks,
Bob
RJK
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
Thanks for the USO mention, Phil, 140% on my USO lottery ticket in 12 hours, and no hesitation in taking the money and running — you have trained us well. Sometimes it's teaching, but with this kind of stuff, where you get whipped like a dog if you let 250% profit melt away, it's definitely training. Happy Fourth!!!
Zeroxzero
I subscribed to Phils Stock World full service for a year or so and found that it was extremely helpful. Now I just get the Stock World Weekly summary, which I find invaluable.
Phil does not baby people and certainly can't make someone into a successful stock operator who does not make the effort on their own behalf, but he is extremely generous with his time in answering newbie questions.
Although I found it difficult to follow and implement all his trades in real time, what I did find was that once you got the hang of his methodology and way of thinking, you could work out your own trades and be quite successful. Even just using his patent Rule Number One* alone is worth its weight in gold. Rule Number Two is even better.
Rookie IRA Investor
Thanks, Phil!!! I just crushed today with it with silver (SLV) calls today, thanks to your persistent reminders of how ridiculously cheap it has become, and watching my TSLA this week $240 puts dissolve into chump change added an extra note of amusement.
Zeroxzero
Phil - Thanks for the welcoming gift of the POT at a buck
Just paid for this month and my membership is not even 24 hours old!
looking forward to many more - bk
Bjkeck
Phil, I meant to post over the weekend, but I was busy having fun . Last week was a very nice week for me, and I wanted to thank you for all that you do. I am pretty much back to cash and really feel like I am learning. I have out performed the $5kp by a very large margin. Thanks again for the service you provide.
Scotbraze
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
Phil/BCS - Didn't realise they traded here. Should've known really. Thanks for the tip. managed to pick some up just before the close at a 15% discount to the UK closing price.
DB
Hey Phil -- I want to thank you every chance I get for helping me to grow my previous portfolio to being profitable enough to pay off some debts my family had and left me with $1,000 left to use in the markets. You should know that your premium membership is amazing on many levels, You and your readers offer a ton of economic and statistical analysis that I was able to use in my clerical level job in finance. It's a shame that someone as talented and honest as you is not on television each night providing a true service to the investing public and not the clowns and hucksters that are talking up their books to dump on retail investors. Sorry for the long post. I had to say something to you that I never thought I would have the opportunity to. You helped put my family in an almost debt-free life through the stock and option plays that I made during my time as a customer of your service and that has made us very happy. You are a good man and I wish you and your family many years of joy and happiness. I wish I could do ads for you!
DaveJ
BTW Phil, I wanted to relate a conversation I had with my business partner yesterday. I told him that I have been much more relaxed about my investments ever since I joined your site. It's funny how a 15-20% cushion does to your nerves. My returns have increased dramatically and my risk diminished. Many thanks for the guidance and patience. Good thing I am doing better financially as you might have increased my life expectancy as well!
StJeanluc
By the way thank you Phil for the DNDN idea. 3x till this morning and will 4x my small investment by next OE THANKS !!!!
Sheila Bair has turned a corner in her support of the bankers. On the critical issue of accounting clarity she made these remarks today to a bunch of CPA’s. I hear she got a standing ovation from that audience. Her words:
Fair Value Accounting
Another ongoing regulatory process is FASB’s proposal to substantially revise the accounting standards for financial instruments. Under the proposed rule, banks would be required to measure substantially all of their financial instruments at fair value on the balance sheet.
While we understand that the objective of the rule is to make financial statements more transparent, we believe that its effect could be to undermine financial stability by making bank performance more procyclical. In short, we do not believe that a bank – whose business strategy is to hold loans and deposit liabilities for the long term – should be required to measure them at fair value on the balance sheet.
70% of all Americans own some stocks. It is hard to avoid the financials if you’re in a fund, so the consumer’s new champion, Elizabeth Warren, should take up the issue of clarity on bank financial statements. That would be a cat-fight I would like to see.
On the key facts behind the bailouts of 2008, regulators have stonewalled the public, the press and even the inspector general of the Troubled Asset Relief Program. On Wednesday, we’ll find out if they can also stonewall the Financial Crisis Inquiry Commission.
Chairman Phil Angelides and his panel will begin two days of hearings on the subject of "Too Big to Fail," featuring testimony from Federal Reserve Chairman Ben Bernanke and Federal Deposit Insurance Corporation Chairman Sheila Bair. Across bailouts from Bear Stearns to AIG, the government has refused to release its analysis of the "systemic risks" that compelled it to mount unprecedented interventions into the financial system with taxpayer money. Two years after the crisis, Mr. Angelides and his colleagues should finally let the sun shine on this critical period of our economic history.
A year ago we told you about former FDIC official Vern McKinley, who has made a series of Freedom of Information Act requests. He wanted to know what Fed governors meant when they said a Bear Stearns failure would cause a "contagion." This term was used in the minutes of the Fed meeting at which the central bank discussed plans by the Federal Reserve Bank of New York to finance Bear’s sale to J.P. Morgan Chase. The minutes contained no detail on how exactly the fall of Bear would destroy America.
He also requested minutes of the FDIC board meeting at which regulators approved financing for a Citigroup takeover of Wachovia. To provide this assistance, the board had to invoke the "systemic risk" exception in the Federal Deposit Insurance Act, and it therefore had to assert that such assistance was necessary for the health of the financial system. Yet days later, Wachovia cut a better deal to sell itself to Wells Fargo, instead of Citi. So how necessary was the assistance?
The regulators have been giving Mr. McKinley the Heisman, but two weeks ago federal Judge Ellen Segal Huvelle made the FDIC show her the Wachovia documents. She is still…
One of the many massive distortions caused by the Fed’s miserable policies is hitting hard on senior citizens who cannot afford stock market losses but need fixed income to live on.
"California Banker" writes
Hey Mish
During the past several weeks we’ve had a lot of seniors coming to the bank as their certificate of deposits of mature. They are very disgruntled about the rate environment in general as bank rates are much lower than a year ago.
Many of these seniors are 70 and up and are using the interest to live on in retirement, so their interest income has taken a hit. I imagine most of those living off their interest will likely need to burn net worth to maintain living expense.
Some are moving their deposits to banking institution that a paying a slightly higher rate, which is typically an institution that is struggling and needs the deposit.
"California Banker"
To make a few extra pennies, senior citizens pull money out of rock solid institutions in favor of pathetically undercapitalized, troubled banks. But hey, it’s FDIC insured. Why not?
Hello Sheila Bair, can’t you see what’s happening?
Sheila Bair, one of the chief regulators overseeing Bank of America’s federal rescue, took out two mortgages worth more than $1 million from the banking giant last summer during ongoing negotiations about the bank’s bailout and its repayment.
It gets better…
Mortgage documents for that 14-room home include a provision, known as a second-home rider, stating that Bair and her husband must keep the house for their “exclusive use and enjoyment” and may not use it as a rental or timeshare.
Yet the couple has been renting out part of the house since they left for Washington, with Bair listing income from the “rental property” in Amherst as between $15,000 and $50,000 a year on her most recent financial disclosure form as head of the FDIC.
Oh yeah, there’s no conflict of interest here cough-friends-of-angelo-cough!
Of course the FDIC retroactively gave her a waiver from its conflict of interest rules – AFTER The Huffington Post started snooping around.
And of course the FDIC’s ethics officer says there was nothing wrong with what went on – even though it appears that Bair’s use for the property did not qualify for the loan she got, and that the programs that would qualify would and did carry a higher rate.
If, as the FDIC claims, this was an "innocent mistake" then Bair should immediately demand (and accept) a re-price on that paper to conform with her intended and actual use, retroactive to the issue of the loan, and immediately pay all accrued arrears.
Seven U.S. banks were seized by regulators today, bringing this year’s total of failed lenders to 140 as financial companies are tested by the recession and the Federal Deposit Insurance Corp. anticipates more shutdowns.
Banks with $14.4 billion in total assets were closed in six U.S. states, the FDIC said in statements on its Web site. The agency is overseeing the dissolution of banks at the fastest pace in 17 years.
Earlier this week, the FDIC boosted its 2010 budget by 56 percent to $4 billion to manage further shutdowns. The total budget will increase from $2.6 billion and the set-aside for bank failures doubles to $2.5 billion over this year, according to a proposal approved by the FDIC board. The agency staff will increase to 8,653 next year from 7,010 this year.
The budget “will ensure that we are prepared to handle an ever-larger number of bank failures next year, if that becomes necessary,” FDIC Chairman Sheila Bair said in a statement. Today’s bank closings will cost the agency about $1.8 billion, according to the FDIC statements.
U.S. lenders are buckling under the weight of loans tied to commercial real estate, which is plummeting in value. Prices have dropped 43 percent from their peak in October 2007, Moody’s Investors Service said last month.
Because allowances for loan losses are a direct hit to earnings, and because allowances are at ridiculously low levels, bank earnings (and capitalization ratios) are wildly over-stated.
Here is an interesting note from the Fed. "For each size category, the sum of all assets held by banks where this ratio is greater than one is divided by the sum all assets held by banks in the class."
The head of the Federal Deposit Insurance Corp. delivered some bad news personally to uninsured depositors who lost money last year when IndyMac Bank crashed and burned, saying an act of Congress is their only hope for recovering their funds.
“When a bank fails, we have to do what’s least-cost to our deposit insurance fund,” FDIC Chairman Sheila Bair said during a public appearance Wednesday in Los Angeles.
Sheila is correct as far as she goes, but like most government employees, it is what she didn’t say that is the problem, not what she did.
The problem lies with the willful and intentional refusal to enforce black-letter law, in this case Title 12, Chapter 16, Section 1831o which says in part:
Each appropriate Federal banking agency and the Corporation (acting in the Corporation’s capacity as the insurer of depository institutions under this chapter) shall carry out the purpose of this section by taking prompt corrective action to resolve the problems of insured depository institutions.
"Shall" is a specific term of art in legislation. It allows no discretion and mandates action. "May" and "Can" are two other words of course, and mean what they say – as does "shall."
This section of the law goes on to define capitalization "buckets," each of which represents a level above water, or above zero, of the excess of assets .vs. liabilities for depository institutions.
It also contains plenty of other "shall" directives such as:
Each appropriate Federal banking agency shall—
(A)closely monitor the condition of any undercapitalized insured depository institution;
(B)closely monitor compliance with capital restoration plans, restrictions, and requirements imposed under this section; and
(C)periodically review the plan, restrictions, and requirements applicable to any undercapitalized insured depository institution to determine whether the plan, restrictions, and requirements are achieving the purpose of this section.
"Flagrant evils cure themselves by being flagrant; and we are sanguine that the time is come when so great an evil…cannot stand its ground against good feeling and common sense…" John Henry Newman
The reporter on Bloomberg television just mentioned as a snide, smirking editorial aside, that Sheila Bair feels that a million dollars is a lot of pay for one year, and that ten million is excessive for a deposit taking institution. He noted that she is obviously a Washingtonian, and not a New Yorker.
That’s right. A million dollars annual pay is ‘nothing.’ Even ten million is not much pay for an average Wall Street banker that is taking billions in public funds and gaming the financial system.
The obvious implication is that Ms. Bair is some hick regulator who is not as sophisticated as, let’s say, Larry Summers, Tim Geithner, or Ben Bernanake when it comes to rewarding their Wall Street cronies for allowing the economy to continue unimpaired.
Perhaps he was attempting to sneak a bit of irony into the propaganda that passes for news in the States these days, but it was not obvious.
But he might be right. When the monetary inflation from all this financial corruption hits, a million dollars per year might yet be a ‘livable wage.’
And so goes the "downward spiral of dumbness." Keep these metrics in mind when you look at your next credit card bill, mortgage payment, and paycheck, rubes, and send your tribute to Caesar.
Aug. 5 (Bloomberg) — Federal Deposit Insurance Corp. Chairman Sheila Bair said regulators should set pay standards for U.S. banks to ensure incentives encourage long-term performance without setting specific dollar limits.
Banking agencies should “become more active” in using existing authority to set compensation standards that are “principles-based,” Bair said today in an interview with Bloomberg Television in Washington.
“We do need to revamp the system to make sure that the incentives are long-term,” Bair said. “I do wish some of these firms would exercise better restraint and common sense on what they’re paying their folks.”
Bair echoed concerns of House Financial Services Committee Chairman Barney Frank and other lawmakers…
Sheila Bair on Cramer today. Instead of pandering her flawed policies in front of a small (if any) cable audience, with such pearls as "insured depositors have nothing to worry about", maybe Ms. Bair can finally get back to Zero Hedge in its FOIA request attempting to obtain some/any information on just what is the compensation/fee structure for FDIC’s advisor, and the real man behind the curtain, Perella Weinberg. How is this private investment bank/hedge fund, whose succumbing to Ratner’s bullying attempts recently was the main reason for the non-Tarp lenders to abandon their fight to block the Chrysler 363 asset sale, incentivized to advise Sheila and her henchmen when it comes to deciding which bank(s) to close. And not just that, but one would be interested in finding out just what role did Perella Weinberg play in the negotiations between Carlyle, Blackstone and Ross when they acquired BankUnited, and, more relevantly, what fee did P-W get out of that deal.
Please Ms. Bair – at least a flat out refusal to our FOIA request would be sufficient. In the meantime, if readers would like to join this effort, the FDIC’s FOIA submission page is here.
Listen to the interview below and focus on the language about economists and examiners (~2 minutes into the interview): these are the people on whom the fate of the financial system lies.
Let's review the Dow Jones Industrial Gann Angles and its secret sauce dominate cycle.
Dow Jones hit upper resistance Gann angle early 2019, a sell of followed, now the bounce works its way through the down ward Gann Angle, a fail at either make or break point will see the bounce sell off, and that may get very interesting!
Click for popup. Clear your browser cache if image is not showing.
This cycle has worked for over 100 years, now we much watch the rest of 2019 to see if we get any more downward pressure. This cycle was found using readtheticker.com ...
The International Monetary Fund is reportedly making plans for the "day after" embattled President Nicolas Maduro's fall, according to Bloomberg. Though there's been little momentum in military defections following US-backed opposition leader Juan Guaido's offer of amnesty to any army officer that switches loyalties, Washington sanctions have effectively strangled state-owned PDVSA's access to global markets. News of IMF maneuvering also comes amidst fresh reports the US is amassing aircraft, troops and armored vehicles on the Venezuelan border under the pretext ...
By CapitalTrading. Originally published at ValueWalk.
What is becoming obvious now is the fact that the global central banks can no longer hide the fact that without their QE and balance sheet expansion, asset prices would fall and economies would reverse. The last month or so has seen a huge reversal in the markets expectations for future rate hikes and one by which certainly shouldn’t have surprised any of our readers. We have used and will continue to use the #QE4EVR theme as basically we are and will all continue to be bound to the low interest rate to negative rate environment. We aren’t stupid…
Anyway, let’s look at the latest headlines and make some comments (headlines and charts are from D.Wienke of Cabrera Capital)
U.S. DEC. RETAIL SALES FALL 1.2% M/M, BIGGEST DROP SINCE 2009
Are we about to pay much higher prices at the gas pump? Possible!
This chart looks at Gasoline futures over the past 4-years. Gasoline has become much cheaper at the pump, as it fell nearly 50% from the May 2018 highs. The decline took it down to test 2016 & 2017 lows at (1). While testing these lows, Gasoline could be forming a bullish inverse head & shoulders pattern over the past few months.
Joe Friday Just The Facts- If Gasoline breaks out at (2), we could all see higher prices at the gas pump. If a breakout does...
Some of the stocks that may grab investor focus today are:
Wall Street expects PepsiCo, Inc. (NASDAQ: PEP) to report quarterly earnings at $1.49 per share on revenue of $19.52 billion before the opening bell. PepsiCo shares rose 0.2 percent to $112.82 in after-hours trading.
Bill Eddy (lawyer, therapist, author) predicted Trump's chaotic presidency based on his high-conflict personality, which was evident years ago. This post, written in 2017, references a prescient article Bill wrote before Trump even became president, 5 Reasons Trump Can’t Learn. ~ Ilene
The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...
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
...
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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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...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site
