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Hi there!
Is this board still active? I've been getting back into ETF and index options after several months of concentrating on small cap stocks. Wondering if there is an ongoing discussion anywhere on iHub...
UBS Update
Really late on this one but the 04 $50 Calls closed +20 and the 05 $60 Calls tapped that also. A look back where picking up some longer term Leaps would have been profitable over the course of the year even if hedged with a Put trade. It might be interesting to look at another long term trade for 05 here? :^)
UBS Jan 04 Leaps update:
Currently the UBS Jan 04 $50 Puts are trading at 0.85 x 1.00 and the Calls at 7.70 x 8.00 for a combined total near 9.00. The gains on the Calls have made up for the erosion on the Puts but time decay has meant there is not a profit on the spread.
Jan 05 $40 Puts at 1.85 x 2.20 Jan 05 $60 Calls at 3.80 x 4.30 Total cost $4 in last post, now $6.50. The wider straddle has made some ground since the last post and would have offered a profit on the spread. Having good timing on when to enter the Straddle or Strangle seems to be the key. It seems to me that timing might be when the price is consolidating, maybe.
RGC Update
The regular news on the stock did not mention the adjustment of the strike price but checking the news at http://www.cboe.com/Home/Default.asp did show where the contract strike prices would be adjusted. Something to check in the future for me is the cboe website. Just enter the stock symbol into the search and it will bring up the news releases on it. Here you can see the difference between the standard PR and the one shown at cboe.com
http://bigcharts.marketwatch.com/news/articles.asp?guid={80D4ACFC-CA11-4762-BFAC-9EA0568FCC37}&n...
http://www.cboe.com/common/pageviewer.asp?file=03-249.doc&dir=ttstocksm&head=stock%20splits%...
RGC update
Looks like my mistake on that one. I talked to my broker and he says that the strike price for the options can be adjusted for the dividend payout if it exceeds a certain percentage of the stock price. In effect the strike price of the 22.50 contracts has been changed to the 17.50 strike price. I guess that the old saying "If it is too good to be true it probably is" holds here? I hope that no one had any sizable positions. I talked to someone at my brokerage about buying the stock and hedging with the Puts before but did not hear about the strike price on the contracts being adjusted before. I hope that everyone else reviewed the trade with their broker, UGH :^(
RGC update
The X-date was moved to July 1st or 2nd, still not sure. RGC has failed to move higher than $24 and with a $5 dividend payout I would Anticipate that the price will drop a bit from here. Supposedly still time to buy to pick up the dividend, better check with your Broker, and the Puts to hedge the trade are considerably lower due to time erosion and low volatility. The July $22.50 Puts are trading .50 x .70. I do not own any of the stock but will see if the 22.50 Puts will be profitable on a drop in the stock price after the dividend goes X. Any kind of a market dip going into the 4th might accelerate that selloff, maybe. Was looking at it more as a 'buy the stock and hedge with Puts' play but will see how the Puts play out here. I have seen stocks like DOM have retraces after the Xdate and still recover quickly. DOM has an ongoing dividend though where the RGC dividend will be a one time deal.
Enjoy the Day Everyone! :^)
UBS Jan 04 Leaps update:
Seems as though I am always a week late in updating this <GG>. Currently the UBS Jan 04 $50 Puts are trading at 1.75 x 1.95 and the Calls at 7.60 x 7.90 for a combined total near 9.50. Using last weeks Short Puts signal from the MKTSS board on the DJX to exit the Calls would have locked in a sizeable profit. Whenever establishing a Straddle type trade it still seems appropriate to exit one side of the trade whenever the markets reach an extreme. This can be seen in the swing in prices from the Puts to the Calls since the last post. Not sure if we are back to that extreme to the upside yet, maybe.
Jan 05 $40 Puts at 1.85 x 2.20 Jan 05 $60 Calls at 1.90 x 2.05 Total cost 7.45 in last post, now $4. The wider straddle has lost a lot of premium on the Puts but has only gained slightly on the Calls. Too far OTM?
UBS Jan 04 Leaps update:
Seems as though I am always a week late in updating this <GG>. Currently the UBS Jan 04 $50 Puts are trading at 9.30 x 9.70 and the Calls at 2.00 x 2.30 for a combined total near 11.50. Using last weeks Long Calls signal from the MKTSS board on the DJX to exit the Puts would have locked in a sizeable profit. Whenever establishing a Straddle type trade it still seems appropriate to exit one side of the trade whenever the markets reach an extreme. Not sure if we are back to that extreme to the upside yet, maybe.
Jan 05 $40 Puts at 5.90 x 6.40 Jan 05 $60 Calls at 1.55 x 1.85 Total cost 7.45
Only a slight decay in the overall contract values due to time decay, so far.
UBS Jan 04 Leaps update:
I should have checked this last week but have been lazy lately. Currently the UBS Jan 04 $50 Puts are trading at 11.60 x 12.00 and the Calls at 1.35 x 1.60. The Calls really had a large depreciation but still have our total account near $13. Using the movement of the DJX as our leading indicator might have had us closing out the Call side of the trade when the markets moved below SMA Support and left us profiting on the Puts, maybe. That is the hard part of trading a Straddle, deciding if you should exit one side of the trade to capitalize on the other side. It would be hard to exit one side of the trade here as we could still have further downside but a reversal is quite possible to bring the Calls positive. Just putting up some speculation and we will have to continue to watch the charts to see if we can determine good triggers for exiting one side of the trade to capture the most profits. IMO a Straddle is a trade to be made when the Market or Stock direction is uncertain and it is sitting at a turning point, as UBS was near $50. Having the Straddle allows you to be positioned for a move in either direction but I am still not sure which trigger would be best for exiting one side of the trade. Hopefully the charts will reveal a good pattern to follow :^)
So far it looks as though exiting any Calls on any move back to SMA resistance and adding them back as a hedge to the Puts near the lows would have made for the best trades.
Jan 05 $40 Puts at 6.60 x 7.30 Jan 05 $60 Calls at 1.10 x 1.50
Is anyone approved to Sell Naked Options? Looks like maybe time to either sell or hedge the Puts again.
Still no News on the dividend though
From the price action we might just be getting a walkdown before the Good News though, maybe. At least that is typical with otcbb stocks. Lately a Lot of stocks have been trading like otcbb stocks <GG> :^)
NorthWestern Closes $390 Million Senior Secured Credit Facility
MONDAY, FEBRUARY 10, 2003 3:27 PM
- PR Newswire
SIOUX FALLS, S.D., Feb 10, 2003 /PRNewswire-FirstCall via COMTEX/ -- NorthWestern Corporation (NOR) today announced that it has closed and received funds from a $390 million senior secured credit facility with Credit Suisse First Boston.
The new facility matures in December 2006 and will be used to repay NorthWestern's existing $280 million working capital facility and for other corporate purposes.
NorthWestern Corporation is a leading provider of services and solutions to more than 2 million customers across America. NorthWestern's partner businesses include NorthWestern Energy, a provider of electricity, natural gas and related services to customers in Montana, Nebraska and South Dakota; Expanets, the largest mid-market provider of networked communications solutions and services in the United States; and Blue Dot, a leading provider of air conditioning, heating, plumbing and related services.
SOURCE NorthWestern Corporation
Investors-Media, Roger Schrum of NorthWestern Corporation,
+1-605-978-2848, roger.schrum@northwestern.com
http://www.northwestern.com
After EP cut it's dividend I kind of expected it
I never did pick up any Puts though. Following the Plan I should have been holding Puts once NOR started trading below it's SMAs yesterday. Not going to look at any Calls on this one anymore, maybe. Better to look for safer trades IMO :^)
NorthWestern's Board of Directors Defers Dividend Decision
THURSDAY, FEBRUARY 06, 2003 12:48 PM
- PR Newswire
SIOUX FALLS, S.D., Feb 6, 2003 /PRNewswire-FirstCall via COMTEX/ -- NorthWestern Corporation (NOR) today announced that its board of directors has deferred a decision on the company's common stock dividend as it continues the process of completing the company's fourth quarter and full-year 2002 results.
"NorthWestern is clearly focused on reducing debt and improving the company's balance sheet. As such, the board will carefully review the company's financial position in determining future dividend policy," said NorthWestern Chief Executive Officer Gary G. Drook.
NorthWestern Corporation is based in Sioux Falls, S.D. NorthWestern's primary businesses include NorthWestern Energy, a provider of electricity, natural gas and related services to customers in Montana, South Dakota and Nebraska; Expanets, the largest mid-market provider of networked communications solutions and services in the United States; and Blue Dot, a leading provider of air conditioning, heating, plumbing and related services.
Morning Bernard,
I have never held any Leaps long term. The Jan 03 and 04 2.50 Leaps I had on Q last year would have worked out well had I held them longer, sold when Q was near $3. OU and I were talking about last year and how it would have been possible to buy some Index or Stock Put Leaps and have just taken the year off. I am just playing around a little with that idea this year and seeing how some Leaps perform during the year as a Straddle play. Still Best to have just one trade that is in line with the market direction though. Will need to work on how long to carry the Straddle before exiting one side of the trade to maximize the profits. Most of the time using the Plan Long Calls signal or Short Puts signals will work. Except for lately when the markets cannot make up their mind as to a direction <GG> :^)
Keep it going, Bob, I'm observing your trade... I have never played Leaps before.
Asleep at the wheel today, as usual
Big swings on NDN today and it looks as though the Feb 22.50 and 25 Calls had some nice swings. As usual I forgot to keep an eye on them, Ugh
Time to catch some dips?
If Powell's speech tomorrow has any hints of war though the declines could continue. I am watching a lot of Call prices have severe declines for Feb as a Lot of stocks are not being Happy today. I am not one to preach bottom fishing but some Call trades might offer some limited risk. I really like the Calls when they get around 5 cents and are not too far OTM. Not many out there that cheap yet but there might be if we keep dropping tomorrow :^)
Loooking at Dividend plays
I am hoping that a lot of the price spikes from the No Tax on Dividends will wear off on a few stocks. Most of the stocks that have high dividends and are declining are declining due to fundamental reasons though. I might start to run some scans for some of the higher dividend stocks that still have some good basis for their stock price. Most of the higher dividend stocks have significant risk attached to them though, IMO anyway. One of interest today is NOR which might start an up cycle into it's next ex-date, maybe. The stock has been fairly unstable though and I would consider it a high risk trade. If any of the $5 Calls for Feb or March get much cheaper it might be worth taking some risk though, maybe. I am sure that there are a Lot of Better trades out there :^)
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=nor&sid=0&o_symb=nor&fre....
Good Luck to All! :^)
PLAN the TRADE and TRADE the PLAN!
UBS Jan 04 Leaps update:
I should have checked this last week but have been lazy lately. Currently the UBS Jan 04 $50 Puts are trading at 9.20 x 9.50 and the Calls at 2.80 x 3.20. The Calls really had a large depreciation but still have our total account near $12. Using the movement of the DJX as our leading indicator might have had us closing out the Call side of the trade when the markets moved below SMA Support and left us profiting on the Puts, maybe. That is the hard part of trading a Straddle, deciding if you should exit one side of the trade to capitalize on the other side. It would be hard to exit one side of the trade here as we could still have further downside but a reversal is quite possible to bring the Calls positive. Just putting up some speculation and we will have to continue to watch the charts to see if we can determine good triggers for exiting one side of the trade to capture the most profits. IMO a Straddle is a trade to be made when the Market or Stock direction is uncertain and it is sitting at a turning point, as UBS was near $50. Having the Straddle allows you to be positioned for a move in either direction but I am still not sure which trigger would be best for exiting one side of the trade. Hopefully the charts will reveal a good pattern to follow :^)
Jan 05 $40 Puts at 5.90 x 6.50 Jan 05 $60 Calls at 2.20 x 2.65
Is anyone approved to Sell Naked Options?
Good Luck to All! :^)
PLAN the TRADE and TRADE the PLAN!
January 2004 Leap Straddle
Here is a good paper trade to test out some Leaps along with a Straddle strategy. The Jan 2004 UBS $50 Leaps are both trading close to $6.20 so let's try a paper trade for some Puts and Calls at $6.20 and see how the trade would work out over the year. Just a paper trade and might be able to fill both of the orders near the bid for $5.80, maybe. Let's see what happens with our first foray into Jan 2004 Leaps. Really want to get Futuristic? Jan 2005 UBS $40 Put Leaps are trading around $4.20 and the Jan 2005 UBS $60 Call Leaps at $4.20 each. I think that they call that one a Strangle? I don't know <GG> :^)
Good Luck to All! :^)
PLAN the TRADE and TRADE the PLAN!
Does anyone trade Leaps?
Probably the wrong board to be asking as it seems to be dormant. I had some success this year trading Q 2003 and 2004 Call leaps. I was joking with my friend originunknown that we should have taken our lead from how the markets traded in January and just picked up some 2003 Index Put leaps and taken the year off. That would have worked for a Lot of stocks also in 2001 or this year. I am not really sure Where the markets are going long term but if we get a Down January then I might just be inclined to pick up some 2004 Put Leaps and take the year off, maybe. A Positive January and perhaps some Call leaps, maybe? :^)
Good Luck to All! :^)
PLAN the TRADE and TRADE the PLAN!
Sounds Interesting!
I agree with his support levels at 8200-300 as that is where the 320SMA and 100SMA are sitting right now. It will be interesting to see if those numbers move up or down the next couple of days. They should move Up if we do not get a severe retracement. I think that there is still a possibility that we retest the Low near 7500 again in September. Just personal opinion though.
Good Trading Steve! :^)
Good Luck to All! :^)
PLAN the TRADE and TRADE the PLAN!
Good evening Bob, I think Puts may be a nice play here but I would keep in mind we are now on the other side of the 320sma by a good margin. I would think the 320 will act as support if we approach it in a day or two at higher levels.
I thought I would pass along Zeev's thoughts tonight on how the markets may have put in a bottom that gives us a secular bull market lasting maybe 6 to 9 months with a target of 1834 for the NAZ. Check them out for yourself.
#msg-437730
#msg-437881
#msg-437901
#msg-437912
Good trading to all...............steve
Potential Put targets
I am looking at the market hitting resistance here at the EOD and considering some Puts. Just watching for now but here they are if anyone has any Opinions.
DJX Aug 80 Put at .70
GE Aug 27.50 Put at .45
DELL Aug 20 Put at .45
Still too early to be looking at Negative positions? :^)
Good Luck to All! :^)
PLAN the TRADE and TRADE the PLAN!
Time to look at Buying Puts?
So far it looks as though the resistance at 8300 on the Dow is holding the market down. We do not have a failure of the rally yet but it will be interesting to see if that level will hold the market down. We have had an 800 point rally from 7500 so a retest of support is likely here. Perhaps back down to 8000, maybe. It will be interesting to see if this Rally can continue from here or not.
Good Luck Poet! :^)
Good Luck to All! :^)
PLAN the TRADE and TRADE the PLAN!
Thanks.
I only wish I'd done it myself.
Right on the Money!
Selling any Puts would have made for some Great Profits today. Especially if selling Aug Puts that were close to ATM this morning. Now if only I can get approved :^)
Good Luck to All! :^)
PLAN the TRADE and TRADE the PLAN!
Thanks Fred,
You know how to reach me. I am most always here :^)
Good Luck to All! :^)
PLAN the TRADE and TRADE the PLAN!
I probably will PM them ... not for secrecy sake, but to avoid giving the whole world a horse-laugh. My big problem right now is time, but I'm anxious to get this stuff to you to see if we can figure a rationale for it. I'll try to extract the data, too. I'll send it as soon as I can. Thanks for your interest.
Fred
Looking at Buying a Straddle
Yes, if the market is anticipated to move sideways then Selling a straddle would make money on both the Puts and the Calls that are Sold. Since I am only approved to Buy contracts then I was considering buying some OTM Puts and some OTM Calls. IF the market moves then one contract might make up for the other. The market trading sideways would equate to both positions losing though, the reason I have not traded it. If the contract prices can become more reasonable and reflect a limited trading range on the market then the straddle would work if the market makes a signicant movement in either direction. Trading sideways though and your money is straddling the toilet and ready to be flushed :^)
I need to look into an Options broker with lower margin requirements for naked options. If there is such a thing.
Thanks again for the help! :^)
Good Luck to All! :^)
PLAN the TRADE and TRADE the PLAN!
Hmmm, if I remember correctly, a straddle is advisable when you don't expect much movement in the stock, so if you think the movement will be sideways, then it's the way to go. The nice thing about straddles, strangles, etc. is that volatility doesn't matter since the cost of the option you buy is offset for the most part by the premium you take in on the sold option.
That's a shame about the margin requirements on naked puts. I made a bundle with that strategy a few years ago, but they've really tightened the rules.
Selling naked calls is the ultimate in risk. I had my a$$ handed to me just once when a trade went against me in a matter of hours. I never sold calls naked again.
Ugh, not approved
Yes, I tried to get approved to sell naked index options but was told that I do not qualify as I would need 50k in my trading account. I would have Loved to have been able to sell some Calls when we were at the Tops. One of the benefits of selling the contracts would also be that if the market continues to trade sideways then money could be made just from the time premium eroding. Yes, the volatility has really made for some High premiums. That is another reason that I am waiting a while to trade any of the Aug contracts. Might get caught Watching and miss some trades but it is definitely the Safest place to be. Thanks for the strategy! Would you consider a straddle to be benificial here or wait for lower time premiums? TIA, Bob :^)
Good Luck to All! :^)
PLAN the TRADE and TRADE the PLAN!
Hi,
The VIX spiked today and there's talk of capitulation, so I'm expecting a few-day bear rally. The options strategy for those expecting a bounce with a high VIX/VXN is selling puts rather than buying calls. They're both bullish strategies but selling puts takes advantage of the high volatility which inflates options premiums right now.
That said, I see this as a position trade only for a couple of days. I'd sell front-month puts.
Just Watched today
No clear direction in the market and not much of a trading range. There were some good short and bounce plays but the markets have been turning so quickly I did not want to get on the wrong side of a trade. Sitting at 95% cash here and in no hurry to jump into anything. Contemplating some different options strategies, like a straddle, but premiums are pretty high right now. What would you say would be some good strategies for the way the markets have been trading? I have been looking at DJX Options but any index or stock strategies that might be good here would be appreciated.
TIA, Bob :^)
Good Luck to All! :^)
PLAN the TRADE and TRADE the PLAN!
Cool.
How'd you do today? I was gone all afternoon, just got home to see real bloodshed in the market. I hope you and everyone who reads this is OK. If anyone wants to bitch and moan, feel free.
Hmmm, Ramblin Bob
Some one once gave me that nickname but I think it was more because I did not Talk much. When Typing however I can really get going. If I ever get a relaxing evening and not too many errands I will put up a few ramblings :^)
Good Luck to All! :^)
PLAN the TRADE and TRADE the PLAN!
Sure, sounds Interesting
If the formulas are not too hard to calculate then I would like to try them out. My girlfriends daughter is pretty smart about computer programming stuff so she may be able to help me with them (she changed from computer degree to business). You can PM me if you want to keep them a Secret :^)
Good Luck to All! :^)
PLAN the TRADE and TRADE the PLAN!
I'd welcome your ramblings, colorful and otherwise, Dave.
Here's a few g's for Koi:
GGG
I can't post the chart, Bob. It's in Quattro. I may try to extract the data, though, or give you the formulae I've been using. I've kept this chart since 1989. Probably the best idea would be to write down the formulae I use. They're simple enough.
Fred
Cash on the Sidelines IMO
I think that most of the Cash is on the sidelines right now. If we ever do get a Bottom that should help to accelerate a recovery IMO. At least that is what I am Hoping. Right now I cannot see too clearly where the markets are going long term.
Microsoft has really been getting into the communications area. I saw an ad the other day for MSN TV. I have also heard that the Xbox is supposed to be internet capable with a built in modem. I am not much on keeping up with Microsoft or any of the Games that are out there. My only Fun is watching the markets, not much Fun lately.
Can you post the chart that you are looking at? I would be interested to see what it is following. Have you been over to Tom Veale's board to see some of his charts? They are pretty interesting.
Sorry for the late, reply. Having a mini crisis with my Sister's truck breaking down and me trying to fix it over the phone. Will need to go out there to work on it now, Ugh.
Take Care Fred and Linda! :^)
Good Luck to All! :^)
PLAN the TRADE and TRADE the PLAN!
Bob, re: "It is not necessary to See in order to have Vision" and "Perhaps because investors are taking such a dim view of the markets?"
I suspect that dim view is because of the tears being shed over the lack of cash to take advantage of this situation.
Speaking of which ... I've been wondering if Microsoft isn't going to reach into this WorldCom disaster and pull out a plum. Originally, I thought IDT was going to pull it off, but now I'm more inclined to think MSFT will. Whaddadeal! Control the computers, control the communications. Mama Mia! Pretty soon I'll be begging Bill to let me call my wife.
And, finally, on a business-like, stock prognostication note, check this out (Linda found it a little while ago. I'd forgotten all about it.)
#msg-321176
The really sad part of this tale is that, as of last Saturday, it wasn't showing much improvement.
Fred
Do I want to see Proof? <GG>
I guess that might be related in some way to "If the shoe fits"? Some interesting quotes there Fred. Here is a bit of a goofy one "It is not necessary to See in order to have Vision" Not sure where I got that one from. Perhaps because investors are taking such a dim view of the markets? :^)
Good Luck to All! :^)
PLAN the TRADE and TRADE the PLAN!
Ohhhhh, Robert ... I thought you'd never ask. Here's the other one ...
As Sir Isaac never said,
"The depth of the hole is directly proportional to the length of the pole."
Proof available, on request.
Fred
LOL! I like it
I do not see anything wrong with that phrase Fred. I will use the G thing so that you know the affect your saying is having on me <GG>. I was a little bit worried though that I had to explain it to my girlfriend. Please feel free to post any other sayings or phrases that might invoke the G thing. Not to be confused with the Spot thing. I have seen a few similarities between some situations in the outside world and the way that the markets are trading. If I get into a more relaxed mood I might just put up a few of my ramblings. I will try to make sure that they to are not too Colorful :^)
Good Luck to All! :^)
PLAN the TRADE and TRADE the PLAN!
lol. That is very very clever.
I'm giggling.
Not exactly trading, Poet. The spirit is willing but the prices are weak.
Fred
Hey, I'm a good writer and I use <g>'s and emoticons.
I don't think they're necessarily the mark of deficient writing.
You trading today, Fred? I see we're up a wee bit.
Rationalization 213, Tuesdays, 8:00 to 10:00
Today's lesson, Rationalizing For Others, Examples
Yesterday, the meanderings on this board touched briefly on Newtonian Physics. I considered offering an example, but a delicate concern for propriety caused me to desist. After thinking about it, I've come to the conclusion that my view of decorum might be deemed archaic.
Furthermore, I haven't heard such theorems in many years and fear they may be lost in the dim mists of time. It's true they may still be learned (notice, I didn't say "taught") in math class, a milieu I no longer inhabit, but, in the absence of proof, I dare not risk their loss. I only know two of these theorems (although I suspect there are more), and I've successfully proven both.
Here's one:
"The angle of dangle is inversely proportional to the heat of the meat."
If that's a violation of the terms of use, Matt, I won't resist arrest. It was written with humor aforethought.
Fred
Postscript: If my writing is so poor that I need to add those silly little smiley faces or the g-things ... not g-strings, g-things ... like (g) or (G) or (ggg) ... I'd better stop posting messages immediately. FLG
Options Contest
Anyone interested in trying an Options picking contest here is a link :^)
http://www.schaeffersresearch.com/invchallenge/
Good Luck to All! :^)
PLAN the TRADE and TRADE the PLAN!
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