Ugg. You don’t think like a trader. Reviewing options suggests that we’ll very likely be at $5.00 next month. You can live with a seven or eight percent gain in a month, with a possible three to four percent downside risk in a month can’t you? If not, then sell out-of-the-money calls against your position and lower your cost average while remaining agnostic if you get assigned because getting assigned means you made money.
Reviewing options suggests that we’ll very likely be at $5.00 next month. You can live with a seven or eight percent gain in a month, with a possible three to four percent downside risk in a month can’t you? If not, then sell out-of-the-money calls against your position and lower your cost average while remaining agnostic if you get assigned because getting assigned means you made money.
By “Reviewing options…” could you elaborate on what you are seeing?
I’m planning to do exactly what you have described here, selling OTM calls against my current positions. Was hoping for a pop today.
Reviewing options suggests that we’ll very likely be at $5.00 next month. You can live with a seven or eight percent gain in a month, with a possible three to four percent downside risk in a month can’t you? If not, then sell out-of-the-money calls against your position and lower your cost average while remaining agnostic if you get assigned because getting assigned means you made money.
By “Reviewing options…” could you elaborate on what you are seeing?
I’m planning to do exactly what you have described here, selling OTM calls against my current positions. Was hoping for a pop today.
I thought it was pretty clever how all the banks dropped at the same time, a few moments after the FED news. A lot of sell the news, coupled with a lot of day traders who thought there would be a spike from the FED news but discovered there wasn’t, plus a lot of shorts climbing on to ride the roller coaster down. I’m not so surprised they did it to C, but BAC was 18.06 at one point today (+.45) and they still closed it down 11 points into the red.
I thought it was pretty clever how all the banks dropped at the same time, a few moments after the FED news. A lot of sell the news, coupled with a lot of day traders who thought there would be a spike from the FED news but discovered there wasn’t, plus a lot of shorts climbing on to ride the roller coaster down. I’m not so surprised they did it to C, but BAC was 18.06 at one point today (+.45) and they still closed it down 11 points into the red.
You have Bloomberg to thank for that. They released an article stating August credit card defaults are up. This spanked the spanks and reversed the cheerleading ‘cause traders aren’t very smart and can only think of one thing at a time.
Another way to look at today is how strong it was while oil was getting absolutely crushed. Normally oil down would bring equities down but not until late in the day did equities start selling off. Just another way to look at things. Eric why are you thinking C at $5 in a month based on option activity. I see other reasons for it just not quite following your options chain “theory.”
The bears getting slapped by the journalist in the comment section is informative as well.
I’ve been watching the Baltic Dry Index and it is not supporting a turnaround. Many have begun to question the validity of the BDI as well as extra capacity in the industry. Just something to keep on your radar.
The bears getting slapped by the journalist in the comment section is informative as well.
I’ve been watching the Baltic Dry Index and it is not supporting a turnaround. Many have begun to question the validity of the BDI as well as extra capacity in the industry. Just something to keep on your radar.
Tony, if I recall the contradictory shipping data issue was raised in the comments at the link. Basically neither fundamentals or technicals are honored enough at this time to matter. I’ll restate that: while technicals and fundamentals matter, they don’t carry the weight they should because of sentiment. Sentiment, as I see it, is this: Last March when everybody should have been buying, many were selling or sitting on the sidelines. Since March we’ve had a monster rally and if you’re an MM who didn’t participate in the rally, you need to get your money to work and get some exposure to justify your maintenance fee or performance fee. You can justify putting money to work right now because we have a clear path out of the recession and by this time next year, even though we’ll have had more unsecured credit defaults and more mortgages defaults, the world will look like a better place and markets will be even more stable than they are today. Investing now, even though there is a fair amount of uncertainty, will in a years time, make that MM look like a genius. Hence we should have some performance chasing. Moreover, now looks like as good as time as any to get back onboard with the annual economic cycle.
Another way to look at today is how strong it was while oil was getting absolutely crushed. Normally oil down would bring equities down but not until late in the day did equities start selling off. Just another way to look at things. Eric why are you thinking C at $5 in a month based on option activity. I see other reasons for it just not quite following your options chain “theory.”
Max Pain for C this month was $5. Didn’t help. Earnings on the 15th, and a possible run up into them will certainly bring $5, but I’d like to see it stick for a few weeks, and even go higher.
By “Reviewing options…” could you elaborate on what you are seeing?
I’m planning to do exactly what you have described here, selling OTM calls against my current positions. Was hoping for a pop today.
I’m looking at stuff like this:
Thanks. It took me a while to find out, but I wanted to see how long the Oct options for C have been available. Looks like they were issued in Aug, so I’ll believe that current Max Pain is at 5.00. It’s been my experience if the option series has been around a while, then at OE the price tends not to close at what that site shows as Max Pain. I’d be interested in their Current Pain product, but don’t want to pay for it.
The bears getting slapped by the journalist in the comment section is informative as well.
Where does construction fit in this graph? Or will it never recover?
Capital goods are goods used by an organization to produce other goods. Office buildings are capital goods but housing isn’t. Home builders are part of basic industry which is comprised of some 197 different groups. That said, as long as there is more than a six month supply of housing, it is referred to as a buyers market. When there is less than a six month supply of housing it is referred to as a seller’s market. I expect that we won’t see housing begin to take off again until we dip below a six month inventory. What is interesting is that housing and the cottage industries supported by housing effectively accounts for 50% of all commerce.
Technical analysis on C is a very challenging task for sure. Looks like it broke out of a narrowing wedge (not a long term wedge though) and as a result could retest the 4.30 range (depends on the timing of the retest). Another tidbit for the performance chasers is many (self included) watched BAC go from $3 range (if memory serves) to where it is now and want to hope C can do a similar thing. I can see greed getting the best of fear with this security. Anyone have any thoughts on support and resistance in terms of the next week with this guy. Holding some 2.50 strikes (2011 LEAPS) and want to sell some calls (have been buying and selling calls around this position and it’s worked well so far). Thoughts anyone????
Would love to see it over $5 so it could be margined (not by me but those where greed overcomes fear)....
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