Top Trades for Wed, 20 Mar 2019 15:50 – BNS

FDX bouncing back a bit but I decided I don't like them enough to play the short puts again.  

In the Webinar, someone pointed out BNS and they are a lovely bank!  

Year End 31st Oct 2013 2014 2015 2016 2017 2018 TTM 2019E 2020E CAGR / Avg

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Top Trades for Fri, 08 Mar 2019 12:12 – THO

THO/Idi – Yes, we played them a few years ago down around $50 but they popped to $100 so we lost interest and cashed out.  Getting back to $50 again was missed and $63.40 is $3.5Bn against a bit less than $300M in sales but business has steady slow growth so not a bad one to play here.  Also, they paid $202M in taxes on $633 in income – unlike most companies – they are paying too much in taxes!  

Year End 31st Jul 2013 2014 2015 2016 2017 2018 TTM 2019E 2020E

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Top Trades for Fri, 01 Mar 2019 12:35 – EBAY


Phil / EBAY – Elliott Management has one of the best records / reputations in the Bay Area relative to activist investing ( they were drivers behind MSFT )-  I think this may be a good opportunity.   They are close to getting a board seat.


Elliott Management Corporation (“Elliott”), which manages funds that beneficially own more than 4% of eBay Inc. (“eBay” or the “Company”), today released a letter outlining a significant value-creation opportunity at eBay. The letter, addressed to the Company’s Board, noted that the opportunity could lead to eBay being valued at $55-$63 per share, representing upside of more than 75% to 100% from today’s price.

EBAY/Batman – Well a chimpanzee could have turned MSFT around once they got Ballmer out but EBAY is a good company and doesn't need to steal your identity to make money but where was your enthusiasm back in Dec, when they were at $26?  Now up almost 50% you want to get in?

$37.42 is $32.4Bn and they are dropping $3Bn to the bottom line but that's without paying taxes so I'd say $600M in taxes so we'll call earnings $2.4Bn so p/e is still nice at 13.5.  

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Top Trades for Mon, 25 Feb 2019 09:47 – In Case You are in GE

GE/Doro – Thanks for reminding me.  I don't see the point in sticking with the GE trade as they are doing a major split-off and the options will be a complete mess.  Let's cash in the OOP and LTP now and re-evaluate once they have new options.

Short Call 2021 15-JAN 15.00 CALL [GE @ $10.17 $0.00] -40 10/1/2018 (690) $-6,000 $1.50 $-0.58 $7.21     $0.93 $0.00 $2,300 38.3% $-3,700
Long Call 2021 15-JAN 8.00 CALL [GE @ $10.17 $0.00] 100 11/20/2018 (690) $25,000 $2.50 $1.05     $3.55 $0.00 $10,500 42.0% $35,500
Short Put 2021 15-JAN 10.00 PUT [GE @ $10.17 $0.00] -40 12/4/2018 (690) $-14,000 $3.50 $-1.62     $1.89 $0.00 $6,460 46.1% $-7,540


Short Put 2021 15-JAN 10.00 PUT [GE @ $10.17 $0.00] -30 11/30/2018 (690) $-10,860 $3.62 $-1.74 $6.80     $1.89 $0.00 $5,205 47.9% $-5,655
Long Call 2021 15-JAN 8.00 CALL [GE @ $10.17 $0.00] 75 11/30/2018 (690) $17,625 $2.35 $1.20     $3.55 $0.00 $9,000 51.1% $26,625
Short Call 2021 15-JAN 12.00 CALL [GE @ $10.17 $0.00] -75 11/30/2018 (690) $-9,750 $1.30 $0.38     $1.68 $0.00 $-2,850 -29.2% $-12,600

Unfortunately, we can't take it out of Money Talk, so we'll have to deal with the mess over there later:

Short Put 2021 15-JAN 12.00 PUT [GE @ $10.17 $0.00] -20 1/30/2019 (690) $-7,300 $3.65 $-0.63 $0.95     $3.03 $0.00 $1,250 17.1% $-6,050
Long Call 2021 15-JAN 8.00 CALL [GE @ $10.17 $0.00] 30 2/8/2019 (690) $9,900 $3.30 $0.25     $3.55 $0.00 $750 7.6% $10,650
Short Call 2021 15-JAN 12.00 CALL [GE @ $10.17 $0.00] -30 1/31/2019 (690) $-5,400 $1.80 $-0.12     $1.68 $0.00 $360 6.7% $-5,040

Top Trades for Thu, 21 Feb 2019 16:43 – T and BX

BX/QC – Well, they pay more dividends ($2.32 – 6.93%) than T ($2.04 – 6.62%) but "better has to include the risk factor and  I think T at $30.83 is less risky than BX at $34 as their earnings very much go up and down with the market.  T is underperforming now, which I call "cheaper" and note how T does not give you the highs or lows that BX gives you over time. 

On the bright side though, BX is so volatile that you can sell 2021 $33 calls for $4.50 and 2021 $30 puts for $3.50, which knocks $8 (23.5%) off the entry price so net $26 and called away at $33 is $7 + $4.64 so $11.64 at $33 is 34.2% over two years.  

Of course, you could blow off the dividend and just buy the $28 calls for $4.20, selling the same $8 put and call set for a net $3.80 credit on 2x (the same as you'd be assigned with 1x the stock and 1x the short puts) and then at $33 you make $13.80 without all that silly stock.  That's how I'd go.

As we know from experience, it's a lot easier to roll and re-position a spread if the stock goes bad than a more standard covered share.  

With T, the combination of their stability, the $30.83 stock and the 2021 $28 calls at $4.20 and the $30 puts at $4.15 knocks $8.15 off so net $22.68 makes $5.32 at $28 and $4.08 in dividends is $9.40, which is 41.44% at $30 and I sure don't mind owning T under $30 (see above chart) and we're talking an average of $26.32 if assigned.  

Top Trades for Thu, 21 Feb 2019 11:25 – HOV

Speaking of things to do with CASH!!!  HOV is 0.67 and you can sell the Aug $1 calls for 0.15 so net 0.52 means future sales pay 20% every 6 months (if you don't get called away with a 100% gain).  They are likely to do a reverse split but let's buy 10,000 shares for $6,700 in the OOP and sell 100 of the Aug $1 calls for 0.15 ($1,500) and that's net $5,200 for our entry.  

Earnings were pretty good on 12/6.  I like betting HOV when they are down as it's a 100-year family business that seems to navigate the market's ups and downs fairly well – you just have to be patient. 

Hovnanian Enterprises (NYSE:HOVjumps 9.1% after fiscal Q4 EPS beat consensus as average price of homes delivered rose at a faster pace than the number of homes delivered.

Q4 EPS of 30 cents beat consensus by 10 cents and compares with 8 cents a year ago.

Q4 deliveries, including unconsolidated joint ventures, increased 2.4% to 1,829 homes from 1,787 a year ago; average price of homes delivered rose 8.1% to $462,254 vs. $427,741 a year ago.

Q4 homebuilding gross margin of 16.5% increased from 13.7% a year ago.

Q4 contracts, including unconsolidated joint ventures, declined 12% to 1,179 homes from 1,344 a year ago.

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Top Trades for Fri, 15 Feb 2019 11:32 – AXL, T and F

T/Rookie – The 5G rollout will be very destabilizing for Telcos so I wouldn't have high expectations but I do like T whenever they are around $30 as that's $220Bn and they pretty reliably make $20Bn so a nice, comfortable p/e.  At $2.04, the dividend is 6% so you might want to own the stock.  I'd sell the 2021 $30 puts for $4.25 and consider that free money (as I don't mind owning T at $30) and if you buy the stock and sell the $28 calls for $2.75 you net in for $23/26.50 (if assigned), called away at $28 with a $5 profit (21.7%) and a $4.08 dividend (17.7%) for 39.4% profit over two years so there's a great case for owning T with the short puts and calls.  As an option alternative, you can:

  • Sell 10 T 2021 $30 puts for $4.20 ($4,200) 
  • Buy 20 T 2021 $25 for $5.80 ($11,600) 
  • Sell 20 T 2021 $32 calls for $1.90 ($3,800)

Here we're netting in for $3,600 and the same $5,700 in margin in hopes of getting $14,000 back for a profit of $10,400 (288%) or, at $30, $10,000 for a $6,400 profit (177%) and the worst case here is owning 1,000 shares at net $31.80 (assuming the entire bull call spread is wiped out).   

So 1,000 shares of T with the short puts and calls would cost you $23,000 + $5,700 in margin and pay back $29,080 for a $6,060 gain (26.3% on cash) or the bull call spread uses $3,600 cash, $5,700 in margin and makes $6,400 at $30 up to a potential $10,400 at $32.  I'd rather have the option spread…

DAN/Dawg – Nice call.  AXL looks very good as they are a totally boring company that makes $300M but you can buy them for $1.8Bn at $16.50 – very nice.  I love it when a company doesn't even need to grow to gain in price once the value is realized.

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Top Trades for Wed, 13 Feb 2019 15:23 – GOLD and WHR

GOLD is down for silly reasons, they merged ABX and GOLD and ABX's extraction cost was $750 (about) and GOLD's was $850 (about) and now the average cost of extraction is $800 but people are acting like ABX's cost of extraction went up and something is wrong.  A sad commentary on our education system.

As a new trade, I'd go with:

  • Sell 20 GOLD 2021 $15 puts for $3.40 ($6,800)
  • Buy 50 GOLD 2021 $10 calls for $4 ($20,000)
  • Sell 50 GOLD 2021 $15 calls for $1.80 ($8,000) 

That's net $5,200 on the $20,000 spread so $14,800 (284%) upside potential and we'll move to something like that in our own portfolios. 

For the Butterfly Portfolio, we're going to add:

  • Sell 5 WHR 2021 $100 puts for $8.40 ($4,200) 
  • Buy 10 WHR 2021 $120 calls at $29.75 ($29,750)
  • Sell 10 WHR 2021 $150 calls at $16.00 ($16,000) 
  • Sell 5 WHR June $145 calls for $5.75 ($2,875) 
  • Sell 5 WHR June $125 puts for $4.70 ($2,350) 

The initial cash outlay is just $4,325 and the puts require about $5,000 in margin but we have 700 days and we've only used 128 so figure 4 more $5,000 sales is $20,000 and our $30,000 spread is $18,000 in the money to start so lots of upside potential from this one!  

Top Trades for Tue, 12 Feb 2019 12:22 – Simply SPY Strategy

Fund managers/Crs – Don't use them at all if you can avoid them.  They don't outperform SPY and SPY has a 0.09% expense ratio AND collects dividends for you (1.89%).  

SPY is the blue line so that's where you would be over the past 5 years – no better, no worse than the S&P but you have 2% annual dividends in your pocket.  As a long-term strategy, for a $100,000 portfolio I would:

  • Buy 200 SPY at $274 ($54,800)
  • Sell 2 SPY Jan $275 calls for $16.50 ($3,300) 
  • Sell 2 SPY Jan $260 puts for $11 ($2,200) 

So you net into 200 SPY for $49,300 and, if called away at $275 you get $55,000 + about $6 in dividends is $1,200 so $56,000 for a gain of $6,700 (13.6%) or 6.7% of the whole $100K.  If you get assigned 200 more at $260 ($52,000), you'd have 400 shares at an average of right about $250 (including the $1,200).

So the worst case is getting into SPY at $250, which is 10% lower than we are now or making 6.7% in year one.  It's a good, conservative strategy that will vastly improve over time as you re-invest the profits.  At $6,700 a year, in 7.5 years your have another $50,000 at work so your yield pops to 13.4% and then another $50,000 in 4 years and you're at 21.1% so 3 years later it's 27.5% and 3 years after that 34%.

So, using $100,000 now, in 7.5 years you'll have $150,000 and $200,000 in 11.5 years and $250,000 in 15.5 years and $300,000 in 19 years and $350,000 in 20 years at which point you'll be collecting $7,000 in dividends alone and your 6.5% would be dropping another $22,750 into the fund so – by year 20, you will be returning about $30,000 a year off your $100,000 now.  

And the nice thing is that stock prices and dividends tend to rise with inflation so 3 year's salary now and anyone can retire in 20 years – if they are patient!  It's a really great thing to do if you are still working as it requires very little effort to manage and, don't forget, we're keeping 1/2 of the $100,000 on the sidelines so we can ride out at least one crash relatively unscathed.  

Top Trades for Mon, 11 Feb 2019 11:12 – TWTR

TWTR/Tstep – See Friday's comments.   My new theory is that TWTR, for whatever reason, has been pushed into culling all the bots and fake subscribers and THAT is why their growth seems anemic and that's why they are no longer going to report subscriber growth – just income, which is up nicely from last year (and revenues are up 24% too).  

So I think this is just TWTR's pain of cleaning house but that will make them more marketable in the future so we can now bet on the future (and get our money back) with the following for the OOP:

  • Sell 10 TWTR 2021 $25 puts for $4.20 ($4,200) – TOS ordinary margin is $2,514
  • Buy 15 TWTR 2021 $25 calls for $10.50 ($15,750) 
  • Sell 15 TWTR 2021 $37 calls for $6.00 ($9,000)  

That's net $2,550 on the $17,000 spread that's $7,500 in the money to start so all TWTR has to do is hold $30 and we are profitable.  The potential profit is $14,450 profit (566%) at $37.  

And, of course, I'm doing 15 with the intention of selling 5 short calls down the road.  The April $33s are 10% out of the money and pay $1.20 so 5 short would be $600 using 66 of our 704 days.  10 sales like that would at $6,600 to our bottom line – but not yet.

S&P/Soma – As I said, my kids' college funds are in CASH!!! as the S&P has not proven itself about the 200dma so – bonds for now.  As I've mentioned before, you can only buy ETFs with the tax-free college funds and the choices are super-limited and no inverse funds so you can't protect them so, since they were adequate to pay for my girls' colleges, I didn't see the sense of risking a year's education on a 20% drop – especially since any extra money left in the fund is taxed 50% so, outside of expensive grad schools, there's little benefit to letting it ride.  Still, if I think the market is strong enough, no sense not putting $500,000+ back to work but the risks still outweigh the rewards at the moment with China and another shutdown possible and, of course, a President that's likely…
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Phil's Favorites

March Madness: With gambling legal in eight states, who really wins?


March Madness: With gambling legal in eight states, who really wins?

The odds of more legal betting are good. AP Photo/John Locher

Courtesy of John Affleck, Pennsylvania State University

March means springtime, but also breathless headlines of Cinderellas, busted brackets and buzzer beaters.

This year, it’ll also include talk of “sharps,” “handles” and “point spreads,” as millions more Americans are able to openly wager for the first time on March Madness – the NCAA men’s...

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Zero Hedge

Enron 2.0? Jeff Skilling And Lou Pai Are Back With A "New Energy Venture"

Courtesy of Zero Hedge

Former Enron Chief Executive Jeff Skilling is out of prison after 12 years. And he’s getting the old gang back together again.

Just when you thought the world of business couldn’t get more ethically sound, and just when you thought you weren't going to get any more surefire signs of a market top, Jeff Skilling is recruiting his old friends and colleagues and "looking to get back in the energy business", according to a WSJ report.

But that isn’t even the best part - according to the report, Skilling has already landed an investment from former Enron executive and...

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Tax Receipts Decline As Budget Deficit Reaches Record

By Gary St. Fleur. Originally published at ValueWalk.

The U.S budget deficit has widened as the corporate and individual tax receipts and other revenue declines in the face of federal spending reaching new heights.

geralt / Pixabay

Last year’s fiscal gap for February was $215.2 billion. It has now grown to $234 billion. This is larger than the last budget deficit record set in 2012. This increase is due to declines in tax receipts for October-February. The period saw a decline of 1 percent (1.3 trillion ) from the prior year while growth in federal spending rose upwards of 9 percent to 1.8 t...

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Chart School

Palladium Action Review

Courtesy of Read the Ticker.

Palladium is near its peak, or at least a consolidation. Russia and South Africa are the producers of palladium, and it looks like Putin has been able to play US Futures market for a lot of Russia gain! Which metal is next?

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The chart within the video

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Fundamentals are important, and so is market timing, here at we believe a combination of ...

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Kimble Charting Solutions

NYSE Index Suggesting The Top Is In, Says Joe Friday

Courtesy of Chris Kimble.

Is a very broad stock index suggesting that a top is in play? What this index does to close this week should go a long way to answering that question!

This chart looks at the NYSE Index on a weekly basis over the past 4-years. Over the past 15-months, it has created a series of lower highs and lower lows inside of the shaded falling channel. It hit strong support around Christmas at (1) and a counter-trend rally started. The rally now has it testing the top of the falling channel at (2).

Joe Friday Just The Facts Ma’am- The NYSE index could be cre...

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Insider Scoop

10 Biggest Price Target Changes For Friday

Courtesy of Benzinga.

  • Buckingham cut the price target for Trinity Industries Inc (NYSE: TRN) from $32 to $26. Trinity Industries shares closed at $22.96 on Thursday.
  • Canaccord Genuity lowered the price target for Biogen Inc (NASDAQ: BIIB) from $396 to $275. Biogen shares closed at $226.88 on Thursday.
  • H.C. Wainwright cut the price target on Conatus Pharmaceuticals Inc (NASDAQ: CNAT) from $8 to $1.50. Conatus Pharmaceuticals shares closed at $2.91 on Thursday.
  • Wedb... more from Insider


Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

Reminder: We are available to chat with Members, comments are found below each post.


Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

Assorted cannabis bud strains. Roxana Gonzalez/

Courtesy of James David Adams, University of Southern California

Medical marijuana is legal in 33 states as of November 2018. Yet the federal government still insists marijuana has no legal u...

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Digital Currencies

Facebook's cryptocurrency: a financial expert breaks it down


Facebook's cryptocurrency: a financial expert breaks it down


Courtesy of Alistair Milne, Loughborough University

Facebook is reportedly preparing to launch its own version of Bitcoin, for use in its messaging applications, WhatsApp, Messenger and Instagram. Could this “Facecoin” be the long-awaited breakthrough by a global technology giant into the lucrative market for retail financial services? Or will...

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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...

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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism


The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...

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Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.


This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...

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Free eBook - "My Top Strategies for 2017"



Here's a free ebook for you to check out! 

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.

Some other great content in this free eBook includes:


·       How 2017 Will Affect Oil, the US Dollar and the European Union


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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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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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