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up back a bit after hours.
I was going to buy the Dec 6's, but ended up going Jan 9's. @ .25.
Chart looks very strong on AUY, dollar going down, gold up, helps it.
Holding Jan $9 @ $.25
Still holding my Dec $17.50 calls. =P
When you sell covered calls, you are taking advantage that vast majority of calls expire worthless.
Also, keep in mind, if you are selling a call, someone is buying that very same call. Same vice versa, so lets use your example...
You wrote a call, say for Dec, and think it may be expiring in the money, so you buy it back to cover, and immediately write another for Jan. So when you buy your Dec call, someone is selling their call to you.
That article basicly talks about regular Calls... and due to the fact that they are mostly time premium, expire worthless.
Inflation of ?
We will have inflation, in a few years, but right now that is the least of concerns for us.
Otherwise, holding stocks is the best way to fight inflation.
In MS we prey. =P
So how is your portfolio? havent seen on tradeking... but repositioning it for upswing?
wasnt here for it then, but how did you turn the $200 into 48k? what type of trade? or have a trade history that you can send?
I avoid absolute terms like every, but both historically and recently, option expirations were fairly bullish. We shall see Friday at 4pm... but my bet is we will be higher than we are here.
Dollar in the crapper is great news for exporters.
It is the reason we were not in a recession earlier.
Crappy for us buying european stuff, but great for Ford, GM selling cars in Europe
I was going to post earlier today... but remember.. Oct 10. just this year, Dow up 970 points. =) TRUST ME, IT CAN HAPPEN.
Last year, I would of laugh in anyone's face for saying that, but today... why not. Esp with 3.3 Trillion dollars sitting in cash on sidelines in money markets, with cash yielding 1%, Tbills even less....
and GE JUST REAFFIRMED THEIR 6.8% DIVIDEND!
This will set in, and guess what, that dividend will beat 3% once the money starts rushing in.
Add in everything else that happened. We erased 10 years of history... but guess what, life goes on.
Issue with Japan is that they had to import alot, US is fairly sufficient.
Japan did not need infrastructure spending, and they are savers.
USA needs infrastructure and we spend spend spend.
When morgage rates drop to 3.5% or 4%, guess what, my ass is going out to buy a new car and house.
Have to look at Fair value, since we rallied hard, the futures are down, its wierd, i should know but dont.
Aside from that... lots of calls right? I wrote quite a few calls this week.
I really hope you are wrong. =) And typically if more calls out there, means bullish. Got to look at individual stocks, and where most of the options interest is at.
I work with a former options market maker at the philex for over 20 years... it is not as "rigged" as you think it is.
Just seeing if sig works.
Awesome article. I wondering if there was a follow up study done.
Now the easy thing to say is.. well, you buy options, then sell before expiration... yet... someone does buy the options. End of the day, most expire worthless.
To such extent, this is why over time, writing calls, and doing covered calls, calendar spreads gives you a higher return over S&P, with a lower standard deviation, or Risk.
For buying calls, close them out. =) Follow a system, and dont dump all your money into plain ol Calls. Or if you will, make sure they are at least IN THE MONEY, or LEAPS.
They are lottery tickets... and last I checked, the states doing the lotteries are not going out of business.
Heck... Just ask anyone who is hanging on to SKF out of the money calls.
this is not to say dont speculate, but it is to say, dont have speculation BE your investment plan.
Depending on age, risk tolerance, goals, speculative stuff can be up to 25% of portfolio.
oh snap, forgot about that part, humn, may go watch it... tonight, if only avail in high def. =P
Though I doubt my mazda will fit in the house... though if I support Ford, buy a fiesta... and will have a siesta with the gold. !
Make sure you give us all your home address and code to the safe before you do that. =P
plat is only $855 right now? sheesh. dirt cheap.
Our technical analyst believes we can be in an uptrend until Feb. then once people realize that even though the messiah is president, unemployment is still going up, economy still in recession, we can possibly test that low.
that is his worst case scenario.
Otherwise, we can be in this euphoria for a bit and people start dumping the 3.3 Trillion in cash sitting on sidelines into the market.
Hell, when you money market will get you 1% at best, and GE, GE crying out lound, G fuggin E... pays a healthy 6.8% dividend yield which is safe......
WAKE UP PEOPLE. =P hehe. that would reallllllly propel the market.
FED Goes NUCLEAR - Economic commentary from First Trust
The Fed Goes Nuclear To view this article, Click Here
Brian S. Wesbury - Chief Economist
Robert Stein, CFA - Senior Economist
Date: 12/16/2008
Today the Federal Reserve declared all out war on the recent, but severe, drop in the velocity of money that has driven the US into recession and, at the same time, generated the fastest declines in monthly consumer prices since the 1930s. The declaration of war includes three major lines of attack.
First, the Fed reduced the target federal funds rate (previously 1%) to a range between 0% and 0.25%, essentially adopting a Japanese-style zero interest rate policy.
Second, it committed to maintaining this unprecedented low interest-rate range, saying that weak economic conditions “warrant exceptionally low levels of the federal funds rate for some time.”
Third, it said it will continue to use its already expanded balance sheet to support credit markets, what some call “quantitative easing.” In addition to signaling that it will hold interest rates down, the Fed said it will buy agency debt and mortgage-backed securities, along with longer-term Treasury securities. All of this is reminiscent of the early 2000s when the Fed said it would hold short-term rates down for a “considerable period,” which was a strategy to pull long-term rates down.
The Fed’s statement was very bearish on the economy and signaled that the Fed expects inflation to go below a level consistent with price stability.
While all of this may appear appropriate in the heat of battle, this idea that the Fed should attempt to drive down long-term interest rates to stimulate the economy is flawed. The last time the Fed did this was in the early 2000s when it drove short-term interest rates down to 1%, and convinced markets that these rates would stay low for a long time. This in turn brought down long-term interest rates, which is what the Fed wanted.
Those low interest rates, as everyone knows, were a key catalyst beneath an over-bought and over-leveraged housing market. They also drove the value of the dollar down, while igniting inflationary pressures and pushing oil prices near $150/barrel, which virtually killed the auto industry. Apparently, this is all behind us now and the Fed is using the same strategy all over again.
This strategy of driving interest rates down below 25 basis points is likely to push money market fund yields to very near zero. As a result, we expect to see a huge shift toward holding cash in certificates of deposit. If banks pay depositors 25 or 50 basis points for money, they can earn a large spread on any borrowing. As a result, financial stocks soared today, giving a boost to the entire market.
The market obviously liked the Fed’s move, but it needs to realize that the Fed is throwing high-octane fuel on the fire. There will be a price to pay in the long run. For some reason, people only think about the cost of borrowing when the Fed cuts rates. But there is also a cost to lending, and the lower the Fed drives interest rates, the less incentive there is to lend.
This is especially true when mark-to-market accounting can undermine the value of assets. When risks rise, lenders want to earn higher rates not lower rates. Money does not grow on trees. It is printed by the Fed, added to the banking system and then used to make investments.
If rates are held artificially low while risks remain high, the financial system will not utilize money efficiently. Will anyone, other than the government, lend money to General Motors today at 75 basis points less than yesterday? The answer is no.
So, while we expect the Fed’s actions to help offset the decline in velocity in the near-term, it is the longer-term that is becoming more of a risk. Once the economy shows clear signs of reviving, the Fed must act quickly to remove this monetary stimulus.
Text of the Federal Reserve's Statement:
The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to 1/4 percent.
Since the Committee's last meeting, labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined. Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further.
Meanwhile, inflationary pressures have diminished appreciably. In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate further in coming quarters.
The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability. In particular, the Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time.
The focus of the Committee's policy going forward will be to support the functioning of financial markets and stimulate the economy through open market operations and other measures that sustain the size of the Federal Reserve's balance sheet at a high level. As previously announced, over the next few quarters the Federal Reserve will purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand its purchases of agency debt and mortgmortgagebacked
securities as conditions warrant. The Committee
is also evaluating the potential benefits of purchasing
longer-term Treasury securities. Early next year, the
Federal Reserve will also implement the Term Asset-
Backed Securities Loan Facility to facilitate the extension
of credit to households and small businesses. The
Federal Reserve will continue to consider ways of using
its balance sheet to further support credit markets and
economic activity.
Voting for the FOMC monetary policy action were: Ben
S. Bernanke, Chairman; Christine M. Cumming;
Elizabeth A. Duke; Richard W. Fisher; Donald L. Kohn;
Randall S. Kroszner; Sandra Pianalto; Charles I.
Plosser; Gary H. Stern; and Kevin M. Warsh.
In a related action, the Board of Governors unanimously
approved a 75-basis-point decrease in the discount rate
to 1/2 percent. In taking this action, the Board approved
the requests submitted by the Boards of Directors of the
Federal Reserve Banks of New York, Cleveland,
Richmond, Atlanta, Minneapolis, and San Francisco.
The Board also established interest rates on required and
excess reserve balances of 1/4 percent.
Brian S. Wesbury, Chief Economist
Robert Stein, Senior Economist
FED Goes NUCLEAR - Economic commentary from First Trust
The Fed Goes Nuclear To view this article, Click Here
Brian S. Wesbury - Chief Economist
Robert Stein, CFA - Senior Economist
Date: 12/16/2008
Today the Federal Reserve declared all out war on the recent, but severe, drop in the velocity of money that has driven the US into recession and, at the same time, generated the fastest declines in monthly consumer prices since the 1930s. The declaration of war includes three major lines of attack.
First, the Fed reduced the target federal funds rate (previously 1%) to a range between 0% and 0.25%, essentially adopting a Japanese-style zero interest rate policy.
Second, it committed to maintaining this unprecedented low interest-rate range, saying that weak economic conditions “warrant exceptionally low levels of the federal funds rate for some time.”
Third, it said it will continue to use its already expanded balance sheet to support credit markets, what some call “quantitative easing.” In addition to signaling that it will hold interest rates down, the Fed said it will buy agency debt and mortgage-backed securities, along with longer-term Treasury securities. All of this is reminiscent of the early 2000s when the Fed said it would hold short-term rates down for a “considerable period,” which was a strategy to pull long-term rates down.
The Fed’s statement was very bearish on the economy and signaled that the Fed expects inflation to go below a level consistent with price stability.
While all of this may appear appropriate in the heat of battle, this idea that the Fed should attempt to drive down long-term interest rates to stimulate the economy is flawed. The last time the Fed did this was in the early 2000s when it drove short-term interest rates down to 1%, and convinced markets that these rates would stay low for a long time. This in turn brought down long-term interest rates, which is what the Fed wanted.
Those low interest rates, as everyone knows, were a key catalyst beneath an over-bought and over-leveraged housing market. They also drove the value of the dollar down, while igniting inflationary pressures and pushing oil prices near $150/barrel, which virtually killed the auto industry. Apparently, this is all behind us now and the Fed is using the same strategy all over again.
This strategy of driving interest rates down below 25 basis points is likely to push money market fund yields to very near zero. As a result, we expect to see a huge shift toward holding cash in certificates of deposit. If banks pay depositors 25 or 50 basis points for money, they can earn a large spread on any borrowing. As a result, financial stocks soared today, giving a boost to the entire market.
The market obviously liked the Fed’s move, but it needs to realize that the Fed is throwing high-octane fuel on the fire. There will be a price to pay in the long run. For some reason, people only think about the cost of borrowing when the Fed cuts rates. But there is also a cost to lending, and the lower the Fed drives interest rates, the less incentive there is to lend.
This is especially true when mark-to-market accounting can undermine the value of assets. When risks rise, lenders want to earn higher rates not lower rates. Money does not grow on trees. It is printed by the Fed, added to the banking system and then used to make investments.
If rates are held artificially low while risks remain high, the financial system will not utilize money efficiently. Will anyone, other than the government, lend money to General Motors today at 75 basis points less than yesterday? The answer is no.
So, while we expect the Fed’s actions to help offset the decline in velocity in the near-term, it is the longer-term that is becoming more of a risk. Once the economy shows clear signs of reviving, the Fed must act quickly to remove this monetary stimulus.
Text of the Federal Reserve's Statement:
The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to 1/4 percent.
Since the Committee's last meeting, labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined. Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further.
Meanwhile, inflationary pressures have diminished appreciably. In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate further in coming quarters.
The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability. In particular, the Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time.
The focus of the Committee's policy going forward will be to support the functioning of financial markets and stimulate the economy through open market operations and other measures that sustain the size of the Federal Reserve's balance sheet at a high level. As previously announced, over the next few quarters the Federal Reserve will purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand its purchases of agency debt and mortgmortgagebacked
securities as conditions warrant. The Committee
is also evaluating the potential benefits of purchasing
longer-term Treasury securities. Early next year, the
Federal Reserve will also implement the Term Asset-
Backed Securities Loan Facility to facilitate the extension
of credit to households and small businesses. The
Federal Reserve will continue to consider ways of using
its balance sheet to further support credit markets and
economic activity.
Voting for the FOMC monetary policy action were: Ben
S. Bernanke, Chairman; Christine M. Cumming;
Elizabeth A. Duke; Richard W. Fisher; Donald L. Kohn;
Randall S. Kroszner; Sandra Pianalto; Charles I.
Plosser; Gary H. Stern; and Kevin M. Warsh.
In a related action, the Board of Governors unanimously
approved a 75-basis-point decrease in the discount rate
to 1/2 percent. In taking this action, the Board approved
the requests submitted by the Boards of Directors of the
Federal Reserve Banks of New York, Cleveland,
Richmond, Atlanta, Minneapolis, and San Francisco.
The Board also established interest rates on required and
excess reserve balances of 1/4 percent.
Brian S. Wesbury, Chief Economist
Robert Stein, Senior Economist
FED Goes NUCLEAR - Economic commentary from First Trust
The Fed Goes Nuclear To view this article, Click Here
Brian S. Wesbury - Chief Economist
Robert Stein, CFA - Senior Economist
Date: 12/16/2008
Today the Federal Reserve declared all out war on the recent, but severe, drop in the velocity of money that has driven the US into recession and, at the same time, generated the fastest declines in monthly consumer prices since the 1930s. The declaration of war includes three major lines of attack.
First, the Fed reduced the target federal funds rate (previously 1%) to a range between 0% and 0.25%, essentially adopting a Japanese-style zero interest rate policy.
Second, it committed to maintaining this unprecedented low interest-rate range, saying that weak economic conditions “warrant exceptionally low levels of the federal funds rate for some time.”
Third, it said it will continue to use its already expanded balance sheet to support credit markets, what some call “quantitative easing.” In addition to signaling that it will hold interest rates down, the Fed said it will buy agency debt and mortgage-backed securities, along with longer-term Treasury securities. All of this is reminiscent of the early 2000s when the Fed said it would hold short-term rates down for a “considerable period,” which was a strategy to pull long-term rates down.
The Fed’s statement was very bearish on the economy and signaled that the Fed expects inflation to go below a level consistent with price stability.
While all of this may appear appropriate in the heat of battle, this idea that the Fed should attempt to drive down long-term interest rates to stimulate the economy is flawed. The last time the Fed did this was in the early 2000s when it drove short-term interest rates down to 1%, and convinced markets that these rates would stay low for a long time. This in turn brought down long-term interest rates, which is what the Fed wanted.
Those low interest rates, as everyone knows, were a key catalyst beneath an over-bought and over-leveraged housing market. They also drove the value of the dollar down, while igniting inflationary pressures and pushing oil prices near $150/barrel, which virtually killed the auto industry. Apparently, this is all behind us now and the Fed is using the same strategy all over again.
This strategy of driving interest rates down below 25 basis points is likely to push money market fund yields to very near zero. As a result, we expect to see a huge shift toward holding cash in certificates of deposit. If banks pay depositors 25 or 50 basis points for money, they can earn a large spread on any borrowing. As a result, financial stocks soared today, giving a boost to the entire market.
The market obviously liked the Fed’s move, but it needs to realize that the Fed is throwing high-octane fuel on the fire. There will be a price to pay in the long run. For some reason, people only think about the cost of borrowing when the Fed cuts rates. But there is also a cost to lending, and the lower the Fed drives interest rates, the less incentive there is to lend.
This is especially true when mark-to-market accounting can undermine the value of assets. When risks rise, lenders want to earn higher rates not lower rates. Money does not grow on trees. It is printed by the Fed, added to the banking system and then used to make investments.
If rates are held artificially low while risks remain high, the financial system will not utilize money efficiently. Will anyone, other than the government, lend money to General Motors today at 75 basis points less than yesterday? The answer is no.
So, while we expect the Fed’s actions to help offset the decline in velocity in the near-term, it is the longer-term that is becoming more of a risk. Once the economy shows clear signs of reviving, the Fed must act quickly to remove this monetary stimulus.
Text of the Federal Reserve's Statement:
The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to 1/4 percent.
Since the Committee's last meeting, labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined. Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further.
Meanwhile, inflationary pressures have diminished appreciably. In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate further in coming quarters.
The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability. In particular, the Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time.
The focus of the Committee's policy going forward will be to support the functioning of financial markets and stimulate the economy through open market operations and other measures that sustain the size of the Federal Reserve's balance sheet at a high level. As previously announced, over the next few quarters the Federal Reserve will purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand its purchases of agency debt and mortgmortgagebacked
securities as conditions warrant. The Committee
is also evaluating the potential benefits of purchasing
longer-term Treasury securities. Early next year, the
Federal Reserve will also implement the Term Asset-
Backed Securities Loan Facility to facilitate the extension
of credit to households and small businesses. The
Federal Reserve will continue to consider ways of using
its balance sheet to further support credit markets and
economic activity.
Voting for the FOMC monetary policy action were: Ben
S. Bernanke, Chairman; Christine M. Cumming;
Elizabeth A. Duke; Richard W. Fisher; Donald L. Kohn;
Randall S. Kroszner; Sandra Pianalto; Charles I.
Plosser; Gary H. Stern; and Kevin M. Warsh.
In a related action, the Board of Governors unanimously
approved a 75-basis-point decrease in the discount rate
to 1/2 percent. In taking this action, the Board approved
the requests submitted by the Boards of Directors of the
Federal Reserve Banks of New York, Cleveland,
Richmond, Atlanta, Minneapolis, and San Francisco.
The Board also established interest rates on required and
excess reserve balances of 1/4 percent.
Brian S. Wesbury, Chief Economist
Robert Stein, Senior Economist
FED Goes NUCLEAR - Economic commentary from First Trust
The Fed Goes Nuclear To view this article, Click Here
Brian S. Wesbury - Chief Economist
Robert Stein, CFA - Senior Economist
Date: 12/16/2008
Today the Federal Reserve declared all out war on the recent, but severe, drop in the velocity of money that has driven the US into recession and, at the same time, generated the fastest declines in monthly consumer prices since the 1930s. The declaration of war includes three major lines of attack.
First, the Fed reduced the target federal funds rate (previously 1%) to a range between 0% and 0.25%, essentially adopting a Japanese-style zero interest rate policy.
Second, it committed to maintaining this unprecedented low interest-rate range, saying that weak economic conditions “warrant exceptionally low levels of the federal funds rate for some time.”
Third, it said it will continue to use its already expanded balance sheet to support credit markets, what some call “quantitative easing.” In addition to signaling that it will hold interest rates down, the Fed said it will buy agency debt and mortgage-backed securities, along with longer-term Treasury securities. All of this is reminiscent of the early 2000s when the Fed said it would hold short-term rates down for a “considerable period,” which was a strategy to pull long-term rates down.
The Fed’s statement was very bearish on the economy and signaled that the Fed expects inflation to go below a level consistent with price stability.
While all of this may appear appropriate in the heat of battle, this idea that the Fed should attempt to drive down long-term interest rates to stimulate the economy is flawed. The last time the Fed did this was in the early 2000s when it drove short-term interest rates down to 1%, and convinced markets that these rates would stay low for a long time. This in turn brought down long-term interest rates, which is what the Fed wanted.
Those low interest rates, as everyone knows, were a key catalyst beneath an over-bought and over-leveraged housing market. They also drove the value of the dollar down, while igniting inflationary pressures and pushing oil prices near $150/barrel, which virtually killed the auto industry. Apparently, this is all behind us now and the Fed is using the same strategy all over again.
This strategy of driving interest rates down below 25 basis points is likely to push money market fund yields to very near zero. As a result, we expect to see a huge shift toward holding cash in certificates of deposit. If banks pay depositors 25 or 50 basis points for money, they can earn a large spread on any borrowing. As a result, financial stocks soared today, giving a boost to the entire market.
The market obviously liked the Fed’s move, but it needs to realize that the Fed is throwing high-octane fuel on the fire. There will be a price to pay in the long run. For some reason, people only think about the cost of borrowing when the Fed cuts rates. But there is also a cost to lending, and the lower the Fed drives interest rates, the less incentive there is to lend.
This is especially true when mark-to-market accounting can undermine the value of assets. When risks rise, lenders want to earn higher rates not lower rates. Money does not grow on trees. It is printed by the Fed, added to the banking system and then used to make investments.
If rates are held artificially low while risks remain high, the financial system will not utilize money efficiently. Will anyone, other than the government, lend money to General Motors today at 75 basis points less than yesterday? The answer is no.
So, while we expect the Fed’s actions to help offset the decline in velocity in the near-term, it is the longer-term that is becoming more of a risk. Once the economy shows clear signs of reviving, the Fed must act quickly to remove this monetary stimulus.
Text of the Federal Reserve's Statement:
The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to 1/4 percent.
Since the Committee's last meeting, labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined. Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further.
Meanwhile, inflationary pressures have diminished appreciably. In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate further in coming quarters.
The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability. In particular, the Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time.
The focus of the Committee's policy going forward will be to support the functioning of financial markets and stimulate the economy through open market operations and other measures that sustain the size of the Federal Reserve's balance sheet at a high level. As previously announced, over the next few quarters the Federal Reserve will purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand its purchases of agency debt and mortgmortgagebacked
securities as conditions warrant. The Committee
is also evaluating the potential benefits of purchasing
longer-term Treasury securities. Early next year, the
Federal Reserve will also implement the Term Asset-
Backed Securities Loan Facility to facilitate the extension
of credit to households and small businesses. The
Federal Reserve will continue to consider ways of using
its balance sheet to further support credit markets and
economic activity.
Voting for the FOMC monetary policy action were: Ben
S. Bernanke, Chairman; Christine M. Cumming;
Elizabeth A. Duke; Richard W. Fisher; Donald L. Kohn;
Randall S. Kroszner; Sandra Pianalto; Charles I.
Plosser; Gary H. Stern; and Kevin M. Warsh.
In a related action, the Board of Governors unanimously
approved a 75-basis-point decrease in the discount rate
to 1/2 percent. In taking this action, the Board approved
the requests submitted by the Boards of Directors of the
Federal Reserve Banks of New York, Cleveland,
Richmond, Atlanta, Minneapolis, and San Francisco.
The Board also established interest rates on required and
excess reserve balances of 1/4 percent.
Brian S. Wesbury, Chief Economist
Robert Stein, Senior Economist
Yak,
From your keyboard to god's ears. =P and to our wallets.
any reason why?
FAS Covered Call
Inspired by another poster on a different forum.
FAS @ 26.09
Jan 09 $30 @ $4.80
BE = $21.29 or 18% Downside Protection
22% return if static, 265% annualized.
40.9% return if called, 481% annualized.
This is how sick a covered call on FAS is.
FAS @ 26.09
Jan 09 $30 @ $4.80
BE = $21.29 or 18% Downside Protection
22% return if static, 265% annualized.
40.9% return if called, 481% annualized.
If some poor sucker wants to buy those calls. would love to sell them.... humn,
Maybe when options expire, I may start doing calendar spreads on fas isntead, or writing puts.
$1.10 after hours... whats up with this stock? any story?
True, but if you figure you are giving up a few percent on the up, and the down, pay comissions, pretty much erases it.
Volume wise, FAS 11 mil shares traded, UYG 169 mil.
BGU 10 mil, SSO 96 mil or so.
Add the fact that pro shares is now even coming to brokerage houses to introduce these etf's to brokers... much more complete market.
Add the fact that you have Options on these etf's, the spreads between the bid/ask on FAS are nuts. =P
It could very well... What you have to do is adjust the bollinger bands to 3 standard deviation units, and voila... it works.
Problem with FAS/FAZ is that due to lack of liquidity, they usually do not stay close to their NAV's.
For instance
UYG $6.15 Market, $6.20 NAV
SKF $104.75, NAV $103.59
FAS $26.06, NAV $26.57
FAZ $36.90, NAV $35.32
So you pay a bit more or less depending on sentiment.
You can get the true underlying NAV by adding IV to the end of symbol, though different quote systems everywhere. Could be uygiv, or uyg-iv, or uyg.iv
More Green, More green. =)
But we still have MS tommorrow, and announcement of Automotive bailout.
I like OptionsHouse. send me a message with your username, can hook you up with a discount code, and or $50 or free trades for both of us.
If they are Jan's, not that likely that they will get called until last week of Jan expiration.
One follow up may be that when it gets closer to $5, to buy back the $2.50's and roll up if you want more room on the upside, will evaluate it later if you would like.
Yes, that is true, most dont get exercised.
Are those Dec calls or Jan you wrote? If Jan, dont have to worry much.
If Dec. perhaps.
You would get a notice and cash in your account if called away.
Getting called away is actually not the worst thing that can happen! It means you made money!
But I was thinking of you when GNW popped today.
You know, just listening and watching this GE call, you really have to say, they run a very good, tight ship. The legacy lives on of Jack.
so did you jump on the boat? =)
Both S&P and Dow blew through the MA50, GE giving a good outlook so far... dunno.
Didnt expect UYG to go to 6 today, but there is alot of strength or lack of sellers in this rally.
GE is doing a great job of painting a great picture. Run baby. =)
Just bought Dec 08 GE $17.50 for $.53
I prey for this ticket. =)
GE annual outlook meeting at 3PM today.
May drive the market.
http://www.ge.com/investors/events/event_id12162008.html