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Hi... I'm back in case anyone even remembers me from a year ago, or more. =)
Glad to see some friendly usernames here.
In any case, looking forward to chatting with everyone again.
Look at it this way... is BN 10x the value of BGP?
Will see the earnings numbers Thursday.
BKS Barnes & Noble Call Spread
Buy 10 April 11 $14 for $1.45
Sell 10 April 11 $16 for $.50
Net outlay is $.95
Max profit $1.05 ($1050)
Max loss $.95 ($950)
Break Even... $14.95
Barnes and Noble was just approached by Borders to be purchased for $16 per share. Giving until April for it to go through.
Disclaimer: I do not shares of BKS, however will likely be purchasing this call spread.
BGP Covered Call May 2011
Buy 1000 BGP $1.39
Sell 10 May 11 $2 Calls $.25
Total cost of stock $1,390
- Premium Received - $250
Investment Required $1,155
Results at Expiration
Stock Unchanged - 20.35%, 45.28% Annualized.
Profit/Loss - $235
Stock above exercise - 73.16%, 162.83% Annualized.
Profit/Loss - $845
Downside Protection : 16.91%
Break Even - $1.16
Total cost of stock $1,390
- Premium Received - $250
Investment Required $1,155
Discussion:
I really like Borders. It is a beat down stock, for reason. However I do believe they will survive. The management is serious behind it, and Pershing Square (Bill Ackman) ramped up his ownership stake to 37% of the company, and has agreed to finance the purchase of Barnes and Noble for $16 a share.
Disclosure: I am a long shareholder of BGP. Will be adding some more shares shortly, and some call spreads.
Ok.... Now I am back. =)
Just purchased my premium membership and will be back to run the show.
The goals are as they were... great growth and income with covered call and calendar spreads.
Will update later today some ideas I have for my favorite book seller... Borders.
Some broker is full of squat.
The only thing settlement is for....
Often times, you can call your broker and ask him to buy x shares for you. You then have T (trade) + 3 days to settle (settlement) come up with the money to pay for the trade. If you do not have the money, the trade is busted. Also, this is the amount of time it takes to get the shares into your account.
So you own the shares from the date of trade, however they are not typically in your account, physically, for 3 days after the trade date.
btw... I was a broker at a major wirehouse, and now am in Independent advisor.
and just looking again at the volume charts.... that is exactly what it seems like. Very heavy volume on the way down, 40 to 50 mil triggered it. If you are a fund like fidelity contrafund or whatnot... that is a tiny position.
It could of easily been a mutual fund, or a hedge fund closing up their positions.
An easier answer.... just as logical.... a private equity fund that bought up a ton of shares at $.06, taking gains on their 10 bagger.
quants and technical traders dont give a rats behind about settlement, they just care that they made 10x on their investment in a fairly short period of time.
To keep it brief... I am back.
Was quite hectic actually, but I am back.
Some familly issues, was part of the advisors who was laid off at UBS.
Still transitioning, but I am glad the covered calls we setup in Feb... all worked out pretty well.
Hey all, just an update.
Been extremely busy here in the office past few weeks. =)
MTL is back in action.
Overall grand scheme of things... market can rally 25% from here according to most managers I talk to.... but... and big but... the us economy still has serious issues, in terms of fiscal and monetary policy and would not be surprised to see dow hit 6k, s&p at 600.... but year end should bounce back and close above open.
NYB Covered Call.
Great shape vs all others. Took too steep of a drop.
Could be good, good luck. But be careful, lots of institutions may now be starting to roll out of treasuries as they have to rebalance portfolios. Since last year... treasuries became wayyyyy to strong.
Yes, odds are it will not be exercised until options expiration week, and most likely last day or two.
knock on wood, going quite well, quadrupled my account so far.
What I am finding is that technical analysis is working very well in fx as expected considering it is a far more liquid market where 90% of the volume is institutions, as opposed to the stock market where six pack joe is freaking out.
Trading off of Bollinger bands (both 1 and 2 standard deviations), as well as macd and cci.
As far as stocks. Still holding my UYG calls. Ford is a good buy write.
Looks like market is going to calm down and perhaps put up some good numbers.
Did you see the article on BoA execs loading up on shares past few days? at $5 a share for BOA, $3 a share for Citi.... scary, but can be scary good upside long term as long as things get back t o at least normal in grand scheme.
Nice.... great pick. One of the commentaries I read today was on the reversal pattern in the treasuries. It is a bubble that will blow up... just a question of when.
Oil blew up, real estate, tech, over leveraged hedge funds....
2009 bubble will be treasuries.
When did you go short that you are down 250 bps? I went short Eur/usd at 1.3222 and it is back to 1.325 or so..
there is always tomorrow.... but perhaps the obama bounce will happen once he is office. Who knows. it is all bucket 3. From our traders at the floor, just a lack of buyers out there right now.
Some of the best deals to be had though are corporate bonds paying nice yields, and munis yielding long term returns of the market.
Will post more on forex a bit later on.
Just an update.
wow, what a week. Just been busy at the office and didnt really have time to post.
Talk about call options being taken out. =P Looks like I am done on the AUY and GE calls, good thing it wasnt a large percentage of portfolio.
CY saved me and basicly broke me even, slightly up for the month by playing the Calls on the way up, and the puts on the way down. Will see tomorrow if to close them out or to move it out to Feb or March Puts.
Ford covered write is doing well. BGP as a stock is holding up pretty well, still not able to be filled on the Jan 10 $2.50 calls for covered write at $.30.
Lately been playing with the forex micro account, up nicely on the account, not going to post here exactly but easily doubled.
Initial impressions.... much better and more fairly priced so makes technical analysis more sound.
As far as speculating stocks... will just keep doing the covered calls, and covered call UIT's. If there is one guarantee.... time value on options goes to $0 at expiration.
SAY Covered Call
Current Price $1.19, sell July $2.50 for $.65
87.4% if unchanged, or 171% annualized
293.70% if called, 576% annualized.
$.64 Break Even, 46% downside protection
It is a gamble... depending on how bad the books are cooked.. but gives some fat premiums. Proceed with caution
Check the date on that file... Oct 6.
Just started playing with it yesterday... put in my $50, and got the $25 dollars from CNBC and started playing with it...
not bad. got up to $100. May throw in 1k or so and open up a full fx account that has slightly lower spreads.
Since the fx market is the most liquid market... should be better for trend. With the leverage involved, a small move in a matter of a few mins can yield some good results.
Will have to do more digging.
Thanks. Yeah, I think the Citi/Morgan deal will be good news for market. plus options expiration, can be pretty good.
Had a guy on bloomberg today be pretty bullish.
Also, fyi, CNBC is offering free $25 to try FXCM Micro forex, just sign up for the million dollar challenge on cnbc, and it will be there a link.
http://www.forexmicrolot.com/cnbc.jsp
Yeah, for $.05..... lol, will just keep them. Both AUY and GE are losers for me for this month. CY were 5x multiple winners, as well as BGP.
AUY, less gold skyrockets, is probly lost, if i can get out for like $.10 next week, i would. GE will be close I feel.
hit enter to submit message before completing it. =)
Your welcome. To get back on goal....
Looking at a few Buy Write candidates.
SWHC - Smith & Wesson $2.79, a little overbought now, but in uptrend, wait till pulls back to $2.50 or if gets oversold around $2.
CGW - Claymore global Water $14.06, NAV $14.22
TAN - Claymore Solar ETF $8.91, Sell Feb $10 calls for $.70 or so.
I paid $1.10 for the put, so if it goes up... most i can lose is my $1.10. I would have a stop loss on it, or if trend goes up.
Also, what I can do, is buy some out of the money calls to cap my downside.
I am risking things if it goes above $4.90. There is one week to go before expiration, CY was $4.90, and I bought the $6 put for $1.10... meaning, I bought the put without paying for any time premium.
VS... in a covered call, we write calls to callect the time premium. So in the put situation, I bought it as if it ended today.
As far as why I went opposide side of the trade in CY... It went up a little too much too fast, the occilators are overbought, RSI is turning down from overbought, and MACD is starting to reverse.
Since I purchased an in the money put... I have more downside protection vs buying at the money, or out of the money.
Nice job on that one. Whats scary is that the trend is to normalize after going up so much... but the bollinger bands tightening up on almost everything I am following, expiration next week, and inaguration... something will happen. =)
So I am long some calls, and long some puts.
Bought 10 CY $6 Jan Puts for $1.10, with it trading at $4.90, my only cost is the commission with no time premium that i paid for, with 1 week to go.
Look at the chart, looks like a bit of a top has formed.
Also, BGP is looking like a good buy write, speculative, but a good one.
humn, maybe wait until it settles somewhere? around 10? Lets see tomorrow. if you think vol will go down, write longer term, if up, shorter term.
Perhaps both.
The stimulus package is supposed to allow banks to carry over net operating losses for 5 years... 5 years of losses of WAMU might be pretty valuable to another company.
Also, there are assets, and as far as debt holders go... they can perhaps negotiate those in bk... and come out alive.
What can happen is another company can be reverse merged into the holding company, or buy out other banks, all while having 5 years of losses to carry over and use up.
Got out of CY calls today at $.25, for a 54% gain.
The other one I am looking at as a potential Buy write is cgw, a global water etf, and TAN, a solar etf. Both are great long term holds, and decent premiums.
just ran the numbers on it.
38% return if unchanged, 540% return if called.
Break Even $.40 Could be not bad, esp if you dont believe Borders will stay around. =)
As a longer term... BGP... risky, but fairly low cost with lots of upside.
Stock $.55, write Jan 10 $2.50 for $.20 or so.
Good stuff on those, take your profits as you can. Sometimes good to be lucky. =) But seriously, the volume is very very light today and it will swing up and down.
Also, keep this in mind, over the course of next few weeks, big pensions, hedge funds, etc will be doing reallocations... and rebalancing...
Treasuries went up too much, stocks down, if yields start going up, guess where money will go.... stocks.
but seriously? =P I think its a valid question.
pretty expensive gamble for a "i think".... any reason why you think it will go up one more day than tank?
Saw that, speculation about how the stimulus would apply and if anyone would revere merge into wamu bank holding company