Mike, the fact that you think Jdias and I have the information down is nice to hear. Thank you. It was your advice and book that has taught me most of what I know now. It LITERALLY has saved me thousands of dollars. I thought I knew enough to start investing, but I would have lost my shirt on just about every deal I was ready to jump on. All those that sold came back on the market within 6 months. Thanx again. :beer
Sold short IAG at $5.10 for a trade. The stock is bumping it’s head on a nearly year long declining trendline; it’s banging it’s head on the 200 day moving average; it’s overbought; and it has a direction that tends to reverse every 5-7 trading days. I’m planning to buy it back at $4.10.
Mike
Topped off my June 09 QQQQ $16 PUTS to an even 1000 contracts at .40
FDJake,
I’ve got to tell you that I’m somewhat puzzled by your strategy on the June 09 QQQ $16 puts. The market will need to drop another 50% to put you in the money and will need to drop significantly just to make the options worth more than $.40. Moreover, YOU are 40% of the market in this option with only about 2,500 contracts of open interest.
If you are counting on the market dropping like a stone (which I think is certainly reasonable), then why not wait until the automakers are REALLY crushed and buy Ford stock at a significant discount to it’s current level.
So, I guess I’m asking what your exit strategy is on the QQQQ Puts? The clock is ticking and that time premium is grinding lower. Are you looking for a quick double? Are you thinking that the QQQQ will actually go below $16? What are you thinking here?
Mike
This is one of THE BIGGEST mis-conceptions regarding options. The Q’s DO NOT have to hit that Strike price for me to make a PILE of money.
One of THE BEST things you can do as an investor is keep a WRITTEN account of OPTION Prices. I do this religously. Here’s how the June $16’s have traded for the last 2 months.
Oct 20 .40 QQQQ @ $33.20
Oct 27 1.10 QQQQ @ $28.69
Nov 4 .38 QQQQ @ $33.95
Nov 20 1.12 QQQQ @ $25.56
The 1.12 high for the $16’s was put in on Nov 20th…The Q’s traded to a low that day of $25.56…They closed Friday at $29.56 a $4.00 difference and NO WHERE near the $33 highs seen just a few weeks ago.
We ARE going to retest those lows in the market…The FEDS actions last week tipped their hand to anyone REALLY watching. They KNOW something is coming…They fired that ZERO interest rate blast last week and they are DONE. NEVER…let me repeat this…NEVER in HISTORY has interest rate cuts EVER stopped a BEAR MARKET. You can find charts for every bear market in history with overlaid interest rate cuts and IT HAS NEVER WORKED…This time won’t be any different.
All I need to happen in this market is a BREAK below the previous $25.56 low on those Q’s. (Hell, that’s only $4) We break below that $25 low and you’ll see those Q PUTS EXPLODE, you’ll also see the open interest BOOM. Guess WHO will be SELLING into that BOOM???
Mike… GUESS what I’ll be BUYING with those PROFITS as the market hits NEW LOWS and I unload those options???
It’s a FOUR LETTER word that begins with F. The BEAUTY of this strategy is FORD will ALSO be taking a BEATING at this EXACT time!!!
My guess is we will get this break within the next 2 months. That will leave me with a LONG 3 to 4 months before expiration (FOREVER in the world of OPTIONS TRADING) I’ll add to my long term postions in Ford and Goodyear Tire with the proceeds.
I guess my question to YOU is…
With all your negative TALK about where this stock market is heading…
WHERE’S THE WALK???
Michael…At some point owning 100,000 shares of Ford, purchased during PANIC SELLING and with some profits taken from a falling stock market, becomes a very real possibility.
At that point… FORD has to climb to only $10/share and Ole JED’s a MILLIONAIRE!!!
IT AIN’T ROCKET SCIENCE FOLKS…They WANT you to believe it IS…But it AIN’T!!!
This is one of THE BIGGEST mis-conceptions regarding options. The Q's DO NOT have to hit that Strike price for me to make a PILE of money.
FDJake,
I fully understand how options work. I’ve been trading them for over 10 years. That’s why I asked if you were looking for a quick double (as in the QQQQ dropping to about $25) or whether you were looking for something bigger. In other words, I was and am asking if you have a target profit in mind. Do you think the QQQQ’s are going to 16 or will you sell well before that? I’m just interested in your thought process.
As for Ford, I appreciate your tenacity in supporting the Ford play. My plan is to trade in and out of the stock. In my experience, stocks near bankruptcy are driven by news and rumor. That’s exactly what we’ve seen so far. In my opinion, the next big move in Ford stock will be lower since the news is now out on Bush’s bailout. There isn’t going to be any more good news for a while, so it should fall under its own weight.
At that point...... FORD has to climb to only $10/share and Ole JED's a MILLIONAIRE!!!!!
If the goal is to make $10 per share on Ford, I’m already well on the way with profits so far of $1.87 per share (that I posted in real time as I made the trades). Four or five more rounds of news driven moves should certainly be possible in the next few months. I could make that $10 without Ford stock ever going above $4.
With all your negative TALK about where this stock market is heading......WHERE’S THE WALK???
I am trading the market both up and down and posting all my trades here. I don’t trade as big an account as you do and I’ve never traded more than low six figures. The vast majority of my money is in rental property, which is where it is going to stay. I have a lot more control with my real estate than I have with the stock market. I like a sure thing, both in real estate and in the stock market. That’s why I buy rentals at a huge discount and why I like to sell covered calls on my stock. I like my money NOW.
Mike
It’s GREAT to hear you made a $1.87/share Mike…What we DON’T KNOW is HOW MANY SHARES YOU HAD??? YOU NEVER POST THIS INFO…
From this day forward I will view ANY of these trades posted WITHOUT THE NUMBERS OF SHARES or CONTRACTS purchased as NON EXSISTANT!!!
To answer your original question…
I see the market breaking to new lows soon. I don’t pick price targets.
(Mentioning Ford going to $10 isn’t a price target, it’s just a point in a theory)
What I will do will depend on what the MARKET gives us…
You play the hand your dealt, not the one you want.
I play a completely different game than you do. I DON’T PLAY unless I feel there is something REALLY worth doing. When I see that…I have no problem commiting fairly large amounts of capital to a particular investment. I can not understand how people watch Cramer on CNBC…If I went on this board every night and recommended half the stocks on the NASDAQ and Thursday, and the other half on Friday…WHAT AM I BRINGING TO THE TABLE???
In my experience THE LESS YOU PLAY… The MORE IT PAYS!!!
Do NOTHING, unless there’s SOMETHING to do!!!
I’m a novice investor and plan to buy and hold. I’m reading one of David Dremans books that fdjake recommended and am taking the online classes at www.cboe.com that propertymanager mentioned. I’m taking baby steps.
So far:
08/04/2008 300 F @ 4.71
11/12/2008 2000 F @ 1.92
fdjake,
I’m also new to stock investing. So, what you are saying is if/when the price of QQQQ goes below $25.56, the price of the June 09 $16 puts will skyrocket!!! Let’s assume this does happen and the price goes from 0.40 cents to $2.00. Are you telling me that you can sell your option contracts for $2.00 and make 5 times your investment. IS IT THAT EASY? :shocked
Of course, someone has to be willing to buy the contracts. But, if it is this easy, why isn’t everyone doing it? What if the market goes down and option trading is suspended like it was before? Please tell me I’m missing something.
I understand that in order to invest this way, you have to observe the current events from an unbiased viewpoint i.e. no CNBC, MSNBC, FOXNEWS, PBS, cartoon network, etc… I think I should get a degree in Psychology. As you probably know, most people are like sheep, just following each other to no end. The trick is to find out who they are following and why. Then, while they are grazing, position yourself to PROSPER.
Jerry
Option trading was NEVER suspended. Naked shorting of financials was limited for a certain period. This is know acknowledged as a mistake. Just to make clear…BUYING PUTS (options) was NEVER suspended.
As to your other questions…
Your 100% right about watching CNBC, reading the Wall St. Journal, it’s so much STATIC that you can’t hear what’s REALLY going on.
Here’s my take on where we’re headed and WHY I think this trade will be a money maker.
Look at the UNEMPLOYMENT DATA…THAT is THE ONLY story worth talking about. It was up AGAIN today!!!
Without a JOB it is very hard to buy a home, buy a car, buy electronics, or buy ANYTHING that stimulates the economy!!!
This down turn is going to be EXACTLY AS BAD as the HOUSING CRASH. Everyone acknowledges that HOUSING caused this, is STILL causing this, and…Here’s the important part…
HOUSING IS STILL IN FREE FALL!!!
What’s NOT to see here???
To aswer your other question…Yes…if those June $16’s go to $2.00 I’ll hit the sell button…At that point finding BUYERS for them won;t be a problem because THE HERD will be buying EVERYONE THEY CAN GET THEIR HANDS ON. Right now there’s about 2500 contracts of open interest in those options…(The $15 Junes have almost 3 TIMES as much!! Someone’s BUYING BIG) Watch what happens to the open interest when/if this market breaks to new lows!!! The open interest will ROCKET HIGHER as demand for ANY type of PUT will increase.
The question here is this…
Do we get the break in this market and when??? My money says we get the break within the next month or 2. Stock markets decline or rise based on investors perceptions of the ECONOMY. Our economy is DIEING.
If you thought 2008 was bad???
YOU AIN’T SEEN NOTHING YET.
California is the 7th LARGEST ECONOMY in the WORLD. Let me clarify this…If California was looked at as a COUNTRY an not a state…It would be the 7th LARGEST economic engine on the PLANET!!!
California has 2 months worth of operating cash left. They are facing BACKRUPTCY. The worse part is 17 other STATES are in the exact same position. The State of OHIO recently admitted that it has RUN OUT of MONEY to pay UNEMPLOYMENT BENEFITS!!!
WHEN…not IF…These States start cuting JOBS the unemployment rate in this country will BLOW PAST every estimate out there.
These aren;t $8/hr jobs we’re talking about…These STATE JOBS come with wages people can actually LIVE ON. They pay BENEFITS that will VANISH when these jobs are gone. In the long run (and I mean L O N G ) it’s probably good for our country. But for the next 3 to 4 years it’s going to be like NOTHING we have ever seen before. (I’m assuming there’s not a lot of 85 year olds on this site)
We’ll see…In my experience…These events can create HUGE opportunities…BUT…you have to be willing to go against the common thinking. The common thinking right now on Wall Street is…Stocks are cheap because we’ve come down SO FAR…
My thinking is…Stocks are NOT cheap IF WE’RE HEADING TO DOW 5000!!!
bought DZZ 500 shares 26.09
gold is gonna go down.
made some money on DXO but got out to soon. thought it would pull back some.
bought 3k LVS 8.40
filled its gap up she goes … hopefully
putting a stop on LVS @ 7.99
big volume today. could be shorts re-entering and i dont want to get caught in the down current
not liking the movement on LVS or should i say no movement on LVS. its been stuck today within 20 cents of 8.30 pretty much since 10 this morning.
sold out of LVS @ 8.40 lol lost comission fee.
I dont like its movement today, it should have ran up after gap filling but didnt. well since i sold it tomorrow it will probably run up another 20% and ill be :banghead
Jake the options you’re reffering to are the QAV RP ?? currently .12 B .16 A
Liquidity,
Pay attention to bond funds also…They are fen RIPPING…I made %1.3 TODAY…And thats on my entire accounts worth…And my closed end funds managed a %3 gain in this flicky market…And when Feb 1st comes my delivery of dividends comes,no asking the tenants where is the rent,why are you short,why did you use so much water,why are the taxes so high,why did DSS lower your monthly end,why did you throw a bowling ball through the wall,where is the other roommates portion of the rent,when did you get 3 pitbulls?..DIVIDENDS are truly free money…There is no better cashflow business when you know what you are doing…
The key to my comments is to know what you are doing…So I apologize for making it sound easy…But this current market is called a gimme…Low hanging fruit here…
Pure speculation, that is all this is…
Pure speculation, that is all this is…
LOL…I made more in the last 2 days than I made all of 2008 with 14 units of tenants…Call it what you want…There is simply no comparison.But in all fairness I’m a professional speculator…Real Estate (rental properties) is nothing more than a circulation of money (for me that is)…It comes in one hand and goes out with the other…Just like you notice when there is an arbitrage on the trailer homes you buy I notice the same thing with the market on certain income related issues…I remember one post you said how you bought a trailer for like $1500 I believe and how the cashflow would be this and that…You knew you had a clear advantage…Thats the way I see owning income related issues at this moment…Even if I bailout here I made my most of my year…
Stay in recondite silence until you see a clear opportunity…Sun Tzu
rookie…
glad to see you’re back…
keep those funds compounding.
Corona Christmas Hut…larger of course.
-Mike