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Back into AAL again today.
Had to pay a little over $17 to get in, so I stand to possibly lose a little on the shares because I sold this Friday's $17 Calls and got a little over a dollar each on those.
So if shares get assigned on Friday I'll get a gain of a about 5.7%.
The reason the Calls are expensive is because the volatility of the stock is so high. But the reality is that the Calls should cost even more because the price of the Calls is implying a volatility which is lower that the stock's volatility.
As of yesterday, the stock's vol was 172% while the implied volatility (by the options) was 138%.
Alternative way of looking at it.
The fun and games can continue if $SPX doesn't break below that bottom tine. There was a similar scare two weeks into May. There were two red candles heading into the bottom tine then also, but there was a green candle that tagged the bottom tine, so the fun and games continued.
But there's a difference this time. There was no gap down into those red candles in May, but there was a gap down into yesterday's red candle.
Closed this trade for a loss.
Both accounts, IND and SEP. Debated with myself about that as TEVA started trading below the daily S1 Pivot, and below SMA(50).
The last time I did this was when I got out of the market back in late February. There's been a string of Fridays wherein they've all closed green (indicating no fear of the weekend) -- but that could easily be history as of today.
SnP is red today (a Friday), for the first time in several weeks.
Also, Thursday's trade for all the major indices (and TEVA) were not just red candles but also a full gap down from Wednesday's trade.
Therefore, it's a good time to get out. And I'm not letting the door hit me in the ass on the way out, so I'm running out. Hate to do it but gotta do it.
Surprised this board has no monitor.
I’ve seen boards where nobody has posted for a couple years and yet there is one or more monitors listed.
I’ve been trading this stock recently because, during a health crises it seems logical that healthcare stocks ought to hold up better than stocks in other sectors. Apparently the illogical are in charge of the market this week.
Probably an error in the writing.
Confused with the average vehicle freeway speed of 65 mph.
An author sitting at home and drinking whisky while writing his article.
Million-mile battery is ready to go ...
The "million-mile battery" is one of three grails thought necessary to power widespread adoption of electric vehicles, along with getting more range from a single charge and building out charging infrastructure. Tesla CEO Elon Musk has been making noises about a million-mile battery for a few months now, and GM EVP Doug Parks said GM teams are working on the matter and they're "almost there." Now, in an interview with Bloomberg, CATL CEO Zeng Yuqun made clear the hunt for that first grail is over, telling the outlet, "If someone places an order, we are ready to produce" a battery that lasts for 16 years and can power a vehicle for 2 million kilometers, or 1.24 million miles. The additional cost is 10% over the batteries CATL already makes.
Nine-year-old battery maker Comtemporary Amperex Technology Ltd (CATL) is the world's largest EV battery maker and already supplies a cartel of OEMs including Daimler, Honda, Toyota, and Volkswagen. In May last year, Volvo signed a multi-billion-dollar deal with CATL, and the Chinese firm is building a factory in Erfurt, Germany, to provide BMW with 70% of the automaker's battery needs.
Yuqun didn't reveal any orders for the new cells. His company has a two-year contract to supply Tesla starting this month, those packs expected to be headed for the Chinese-built Model 3. Based on a Reuters report from May of this year, the CATL units are thought to be the same ones Tesla has been working on and will show at the automaker's Battery Day. Reuters characterized the collaboration as a joint development between Tesla and CATL that "deploys technology developed by Tesla in collaboration with a team of academic battery experts recruited by Elon Musk." The academic team is suspected to be the one led by Jeff Dahn at Dalhousie University, in Nova Scotia, Canada.
The million-mile battery technology is separate from another CATL initiative that Tesla is reported to also take advantage of, being cobalt-free lithium iron phosphate batteries that cut pack cost to $80/kWh.
As research firm Canalys put it, Yuqun's metrics are "significant but difficult to verify." But if the battery works as advertised, and barring major hurdles to adoption, efficiency, and usable longevity, it could rewrite how we engage with electric vehicles long-term. The mileage claim is more than eight times longer than the lengthiest battery warranty we know of, more than six times longer than the service mileage estimate for today's packs, and a 16-year lifespan means the pack will greatly outlive almost all the cars it first gets installed in. The longevity would blow open the used EV market for the original vehicles, and expand possibilities by being able to install packs in another vehicle after the first is unfit.
And then there are opportunities beyond cars, which Tesla is said to be working on.
https://tinyurl.com/ybydxtaw
What I paid for today.
The top green arrow points at a support level. After buying the stock this morning (in two different accounts) I waited for a long time before selling this Friday's $12.50 Calls against the stock. Hoping the stock would rise. Finally, after an hour or more, gave in and sold the Calls. Then the dang thing rose. Sort of irritates me but I only missed out on three additional cents. I only got a little over 11 cents. That puts my total cost of entry (two accounts) at about $12.07.
My purpose for selling Friday's Calls was to reduce my cost of entry. It's next week's trade that is expected to produce most of the income, and I'll likely use the same $12.50 strike. I wouldn't complain if I had to move to a higher one.
Very rarely would I go long Calls.
I prefer to sell them, and in that way they pay weekly dividends. Those dividends can be used to buy more stock, roughly 52 times per year. Over a year, that's a hell of a lot of compounding.
My preferred style is to study stocks, buy one then sometime soon afterward sell its weekly Calls to lock in some profit. Repeat every week (or adjust within the same week if the opportunity arises), then eventually move on to another stock when the one I have is looking weak. Usually, shares are assigned every week. And, as there would be profit at the end of each week, more shares can be purchased in following weeks which means that earnings are rapidly compounded.
However, in reality stocks don't go up every week. I expect that sometimes, but there's nothing stopping me from selling Calls again during the following week and that will help to lessen the decline in the stock.
With that technique it is not difficult to make over 100% per year without taking on a lot of risk.
Why would I trade TEVA? It's a healthcare stock. The whole world has a health problem that is not going away very soon. The last time I checked, people will pay dearly to maintain their health.
You are so wrong.
ROTFLMAO:
BREATH INDICATORS:
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=156055078
Eventually sold TEVA CCs.
A little over $0.11 for this Friday's $12.50 Calls.
Stock was slowly creeping higher but not fast enough to overcome loss of time value as this is late Wednesday.
Back into TEVA as of today.
Bought the stock, two accounts, at an average of about $12.19.
Waiting to sell $12.50 CCs a little later since stock is slowly rising.
I love all the stocks I buy.
Then they are merely friends after I sell them. Had a good time with AAL; closed the trade yesterday. Must move on now.
I was attracted to AAL because its options were excessively expensive, so I bought the shares then immediately sold Calls against those shares. It's a Buy-Write or Covered-Call (CC) trade. That's pretty much all I do -- all in, two accounts (Ind and Sep). Going all-in on trades forces one to study the situation more before making a move -- something all traders should do on all trades all the time.
I'm pondering going into a healthcare stock again. It would be lower risk -- after all, the problem the whole world is having now is a health problem. They should benefit from the world's current problems. And if they don't, at least they should suffer less when going down, and do better when rising back up.
So, there are two symbols I usually trade in that sector, so must go back to staring at them now and figure out when to pull the trigger.
So, you and all your buds have a happy hump-daaaaaaaaaay!
Define large.
Assets minus debt minus cost to liquidate.
It could be smaller than you think.
Too Large?
Have to think about that a bit.
OK. time's up.
Define large. Size is assets minus debt.
American Airlines Group's long-term debt to total assets ratio increased from Mar. 2019 (0.47) to Mar. 2020 (0.49). It may suggest that American Airlines Group is progressively becoming more dependent on debt to grow their business.
American Airlines' stock (NASDAQ: AAL) has declined by 63% since the beginning of this year, currently trading at a seven-year low of just $9 per share, and we believe that the company faces a huge credit risk due to the surmounting debt load of $24 billion. May 7, 2020
Why American Airlines Stock Has A Sizable Downside Risk Even At $9.
www.forbes.com
Will AAL eventually file for bankruptcy?
I don't know, but there are analysts that think it will eventually come to that.
But there are three ways to do that ...
Chapter 7: Liquidation (not going to happen in my opinion).
Chapter 13: Repayment Plan.
Chapter 11: Large Reorganization.
I would guess it would be one of the bottom two which would allow for negotiating better terms on loans.
Another choice would be that AAL is merged with another airline and debts are renegotiated at better terms.
Closed that trade early.
Sold the AAL shares in one account at a penny profit, and sold the shares in the other account at a 13-cent loss. But got a substantial profit after buying back the Calls I sold against those two stock positions. Both accounts had options gains of 65-cents per share after closing out the CCs.
Mobileye engages with all car manufacturers.
Nothing unique to NIO.
In fact, NIO never appears in the article.
Huge difference ...
TSLA could always build their own cars, and TSLA never had to beg for money. In fact, the Chinese government helped finance TSLA's move into China. It's very clear that the Chinese government doesn't care who builds electric cars in China -- all that they really care about is that they are built in China.
NIO cannot build their own cars; so until they can, NIO can never make a profit.
What's more, not only did TSLA move into China and build there own car plant there (costing $2-billion US) that employs Chinese workers, other electric car companies are also moving into China with the aid of the government.
The number one and two criteria to making money in the car business is to have a great designer and to do your own manufacturing. NIO's lead designer quit, and NIO cannot manufacture their own cars.
All NIO has is borrowed money.
Buy back shares with borrowed money???
3.85B is in Chinese currency.
To convert to US dollars multiply by 0.14.
Answer in US dollars: $539 million.
Relative to previous financing, that's not a big deal. In fact it's lower than previous financing.
And since NIO is not yet profitable, NIO is expected to end this year with a loss, and NIO is expected to also end next year with a loss similar to this year's loss. NIO's debt continues to grow.
Meanwhile, other car companies from numerous other countries are building car plants in China.
Great profile image!
Reminds me of the 1980 parody film Airplane!
What's slower than a speeding bullet and able to hit tall buildings at a single bound!
AAL SupRes,
Rational for selling this coming Friday's $18.50 CCs ...
Selling those CCs and receiving $1.75 implies that AAL does not close higher than $20.25 this coming Friday.
To write the Calls, I first had to purchase the shares. The average cost spread across two accounts was $18.30.
The volatility of the stock is 144%, while the options imply a volatility of 189.8%. That means that those options are overpriced by about 46%.
I'll take that advantage any day; so I did, by selling those options.
One other thing: that spread between HV and IV can come down as fast as it went up, so don't be surprised if I modify that trade accordingly in the next few days to take advantage of that.
All dojis are indecisive.
A spinning top is a variety of doji. IMHO, giving special names to different styles of dojis is a worthless exercise and I can back that up with very large statistical studies on stocks, ETFs, and indices.
Statistically, after a large run higher or lower, dojis signal a likely reversal very near the same price as the doji but it may take a few days for that reversal to materialize (and those wait days are usually not worth trading).
And, sure enough, as NIO's previous trend was a well established up-trend going into the doji, the day following the doji was a large-body red candle down which had very small shadows. Now NIO's newly established trend is a down trend. My opinion? Everybody should have sold on the day of the doji top.
FWIW, all candles with a very small body relative to shadow length are dojis. A Spinning Top, for instance, is also a doji. The only thing up for debate is the size of the body compared to the total length of the shadows (upper plus lower).
Some technical trading sites define a doji candlestick as having an open and close that are virtually equal. I think that's stupid. Define virtually equal. It's either equal or it isn't.
I do a lot of statistical analysis of stock price behavior within Excel. For a doji, I have a drop-down list that allows for setting the body size of a doji relative to overall candle length. That list allows for selecting doji body sizes up to a low percentage of the high-low range of the candle. It's currently set to 5%.
I don't follow Clay Trader. It seems to me that he only uses 30-min charts, and that's a wee bit too narrow minded for me. You can lose a lot of money in 30 minutes.
Maybe you should use this:
https://www.candlesticker.com/BearishPatterns.aspx?lang=en
Couldn't pass this up.
Didn't know what was going on till today -- after the market closed. Two days in a row, in fact. Huge candles going higher! What to do???
But to just buy in after two huge days going up seems like a recipe for disaster in the following days -- as what goes up must come down.
Solution: I bought the shares at a price just above the low of the day (near market close), then I sold next week's $18.50 CCs (a couple dimes above my share price) for $1.75. Shortly after that the market closed.
Only after that did I have time to look for an AAL message board and try to figure out what just happened. Seems like everybody agrees it's a bunch of short covering. If so, the stock should come back down some as the buying pressure goes away. But I don't care 'cause I took my profit ahead of time (you know -- the CCs).
There's going to be both good news and bad news coming out over the weekend, so nobody really knows for sure how it's all going to turn out.
Everyone heed the warning?
You know, the Bearish Doji Star that NIO produced yesterday.
Candlestick charts are thought to have been developed in the 18th century by Munehisa Homma, a Japanese rice trader.
They were introduced to the Western world by Steve Nison in his book, Japanese Candlestick Charting Techniques. They are often used today in stock analysis along with other analytical tools such as Fibonacci analysis.
https://en.wikipedia.org/wiki/Candlestick_chart
There's currently not much support till price drops back down to $5 (the horizontal orange line).
FWIW, the blue line is aligned with the body of the doji star, and that line goes back to support levels encountered many times in late 2018 and January 2019, and again in March of 2019 when it quickly became resistance. Now the question is: will $5 become support; and if so, for how long?
Check out the following link:
https://www.candlesticker.com/Default.aspx?lang=en
There are headings for Bearish patterns and Bullish patterns.
Like everything else, they don't always work. Consider them as one of several inputs, and apply other indicators as well such as RSI and CCI and especially historical Support and Resistance levels and moving averages.
I emphasized Sup/Res levels because IMHO those work the best for daily charts. Look for historical prices where the stock has stalled (either going up or coming down) -- history tends to repeat.
On intraday charts I prefer 1-min intervals, standard Pivot Levels, and SMA(26) and SMA(65) crossovers as one SMA tends to resist or support the other (which tends to justify why other traders prefer to use the 30-min intraday charts, though INHO they have to wait longer to get the same results and therefore may have missed the best part of the party).
In candlestick lingo: Bearish Doji Star
That's what today's candlestick is (so far). It's a sign it's out of gas and is likely to slide down further during the following days.
It could change before the day is over, but why take the chance?
Either sell it now or sell some ITM Calls against it and let the market decide on Friday. If the Calls don't get assigned, write again on Monday.
Believe it or not ...
I've been a little silent here lately. Reason?
I have an active trade on another company; a CC trade, of course (as I make it a habit to follow my own advice), on a company trading a little below $20. I usually go all-in on the same company with each of my accounts (Sep and Ind).
I always keep a little cash on the side so I can manipulate the Calls a little if I want (swap in and out of different strikes). As of Tuesday I decided I wouldn't be needing that leftover change this week, so I used that money to do a Buy/Write on NIO.
Normally I wouldn't do that on a company trading so low, as the 50-cent spacing between strikes is a large percentage of the stock's base price, but I could see the upward momentum so I decided to take advantage of that.
As I've mentioned before, I'd be more inclined to trade NIO with all my funds when it gets up around $8+ and shows more stability -- large percentage price swings on a low-dollar stock can send you to the poor house real quick.
I'm back.
Doing that boring stuff again: writing CCs on CSIQ.
Two accounts:
Bought shares for $18.49.
Wrote Friday's $19.00 CCs for $0.40.
The TEVA OK Whatever trade:
Because I have $12.50 Calls written against TEVA shares, it's within pennies of being assigned as the week closes. Not concerned about that as that gives the opportunity to buy it back at lower prices next week -- followed by selling more CCs against it during the following days.
One more note about that; the closing highs of $13.45 on 02/12/20 (and again a week later) are the highest closes since May of 2019 when it closed at 14.36 at the high side of a full gap down. I don't know what created that gap lower, but I doubt it gets filled very quickly.
Do I care? Not really. Now I'm wondering if I should adjust that fork. Maybe I'll just add a fourth tine on the top.
Because those pennies are compounded.
From my post: If assigned at the end of this week, that 7-trading_day trade will net 7.12% gain.
Think about it: since I always go all-in and sell weekly Calls, the weekly gains at least add up every week if not compounded (meaning the money, if shares are assigned, is reinvested every week). Compounding means the annual net gain is much more than 52 times the weekly gain of 7.12% (which itself is a hell of a gain if you multiply that by 52 weeks).
Compounding: the process in which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time.
Also, did you notice that I raised the strike of the Calls from one week to the next? Pay attention. Details matter.
In addition, I don't think price gets to $17 in a month. There are historical prices between current price and $17. Those concentrations of higher prices are called resistance -- meaning that price will have trouble rising through those levels. But I'll keep making money anyway because I will sell more Calls every week.
Example of compounding:
7% gain over 20 time intervals, not compounded: 7% x 20 = 140%
7% compounded (an exponential function) over 20 time intervals: 287%
But, investing in stock is not a smooth ride. Stock prices go up and go down. So if all I do is hold stock, it might be trading at the same price three months from now as it is trading now. But if I sell Calls every week, that just keeps adding up every week, and I will be investing that money as it comes in.
Selling CCs on TEVA
Profits come by the pennies -- in slow motion. But at least it's motion, and generally forward motion.
The last time I bought TEVA was last Thursday, for $11.94. Soon afterward, sold that Friday's $12 Calls for 10.48 cents. Weeeee! Not much but better than nothing.
Didn't get assigned. So yesterday (Tuesday) sold this week's $12.50 Calls for 18.5 cents.
So far, that's 28.98 cents income from selling CCs. But I also raised the strike price from $12.00 to $12.50. If assigned at the end of this week, there will also be a stock gain (over purchase price) of 56 cents, therefore total gain (stock plus CCs) will be 84.98 cents.
If assigned at the end of this week, that 7-trading_day trade will net 7.12% gain.
If not assigned, sell more CCs next week.
Now what?
Auto investors still have some big questions related to the structure of NIO's deal with authorities in Anhui. The parties are creating a new company into which NIO will put most or all of its assets in China in exchange for a 75.9% stake. But it's not clear what will happen to NIO's debt -- or exactly what its U.S. shareholders will own once the transaction is completed.
The good news is that more information, and (hopefully) answers to those and other questions, should be forthcoming when NIO reports its first-quarter earnings before the market opens on Thursday, May 28.
https://tinyurl.com/yaauu3a3
NIO's earnings report: 05/28/20__Thu__7:30 AM
BofA isn't buying NIO stock.
BofA is merely recommending that everyone else should buy NIO stock.
Mobileye, an Intel company, and NIO ...
Suggesting not taking this so seriously.
If a car company wants to do something related to autonomous vehicles then it has to get involved in electromechanical design and buy some servos and electronics. Hell, I could do that (and put it on my riding mower) as I used to work as an electronics engineer and I also did a little work with servos.
Where would NIO get the electronics? Oh, how about Mobileye, an Intel company. But they wouldn't buy it directly from Mobileye or Intel. They would buy it from an electronics components supplier (that sells chips and also servos), of which I could name many.
I'm remembering an event of maybe a couple years ago when a company took their developmental autonomous vehicle out on the highway for a test drive. That drive ended up with the test vehicle rear-ending a fire truck parked on the side of the road (and it had a right to be there as it was probably there to service a car that caught on fire).
Silicon Valley Rumors:
Apple Project Titan Staff Spotted At NIO
Mario Herger, April 24, 2019 ... old stuff = don't bet on it.
Note: Checking that report date above against NIO trade, it had no effect as NIO continued in a steady downtrend.
An indicator for coming events come often from small rumors, which are passed around in Silicon Valley. Apple’s Project Titan is one of them with lots of rumors. First it was reported that Apple wants to build a car. Apple never confirmed that. Then more and more engineers from local automotive companies moved to Apple, until around two years ago Apple seemed to have decreased most of activities, and the same engineers returned to other car companies. Apple, so the rumors, wanted to focus on software for autonomous vehicles.
When then one-and-a-half years ago a friend of mine who had worked at Tesla at the electric drive train told me over some coffee, that the past weeks he was contacted twice by Apple recruiters, it became clear that Apple must be working on more than just software for autonomous cars.
Now the rumors are intensifying that Apple is increasing the scope of its activities, and there are multiple indicators. First, the former VP of Engineering for the electric drivetrain at Tesla, Michael Schwekutsch, moved to Apple. Then the results that Apple cars showed in California’s latest Disengagement Report were pretty embarrassing: solid last spot. NIO, the Chinese electric vehicle startup with locations in San Jose (just two blocks from where I live) and Munich, on the other hand just unveiled its new all electric sedan, the ET. Also the NIO ES8 (an SUV), sold only in China, was spotted as a mule for autonomous driving in San Jose. And did I mention? NIO is not just developing electric vehicles, but also autonomous vehicles. Because I live just around the corner of the NIO office, I keep spotting their vehicles all the time. And at the same time, NIO’s financial results were a bit underwhelming.
Just today I got tipped off that Apple Project Titan staff was spotted at the NIO offices. Well, that may not mean much, as many companies talk to each other. But connecting the dots – the small facts that I just listed – and this may be forecasting something bigger to come. Cooperation? Acquisition? Or just simply some engineers drinking coffee talking about cars?
https://tinyurl.com/y9nsu36t