<p>I have felt the same way all summer. Good profits, bond yields stink, I want some decent income and the market has been a grinder all summer long. I haven’t done much trading but it feels exhausting doing mostly nothing.</p>
<p>Technical picture on the $compq is still 3,400 so I’m hanging my hat there. 3,200 is going to be a battle though.</p>
<p>" However I look at it from the standpoint of this money would have been in a bank acct earning cr**, so I’m still better off."</p>
<p>That is how I look at it too. I don’t want to lock in too much money long term into anything, so I sell some premium.</p>
<p>I am aware that the selling of premium may not work. The Taleb Principle or whatever he calls it. (Of course, he didn’t make this up. Most option traders know this. At least traders that have been around).
You make small amounts of money over and over and then BAM. Then you lose your profits quickly.</p>
<p>"I really should be pulling everything out of the market now - I’ve got enough but I guess I’m a greedy pig who’ll get slaughtered down the road. "</p>
<p>People have different motivations and Circumstances. You gotta do what you gotta do. Makes things interesting. It would be so boring if everybody was the same.</p>
<p>Maybe we will go to new highs in 6 months. I am not going to write anything to Henry Blodget if the market does go to new highs. :)</p>
<p>“I haven’t done much trading but it feels exhausting doing mostly nothing.”</p>
<p>I prefer doing nothing. 
</p>
<p>But these damn interest rates… Lol.</p>
<p>“I am aware that the selling of premium may not work. The Taleb Principle or whatever he calls it. (Of course, he didn’t make this up. Most option traders know this. At least traders that have been around).
You make small amounts of money over and over and then BAM. Then you lose your profits quickly.”</p>
<p>I have had that bam moment but I can alway go far enough out in time which sometimes will mean not making any money especially in the indices.</p>
<p>Well…you are lucky.</p>
<p>I have been short premium and actually lost.</p>
<p>For example,</p>
<p>If ANR opened tomorrow at $1 and I am short the $5 puts, really, what am I going to do?</p>
<p>It does help to stay out of the speculative names when selling puts, but then, the
premiums are lower. </p>
<p>I hope I didn’t just jinx myself. :)</p>
<p>
As we used to say, drink like a bird, crap like a moose. :D</p>
<p>The other analogy was, you spend weeks and weeks filling up a bucket with an eyedropper, and then when the bucket is almost full some idiot walks by and kicks your bucket over. :(</p>
<p>NJres, I love those sayings. I am going to use those. :)</p>
<p>I look at stocks like MSFT, INTC, CSCO.</p>
<p>There were people doing buy/ writes in those issues during the bubble in 1999. Those issues were supposed to be the safe issues. Those people are still buried.</p>
<p>How much can you get for selling a call with a 50 strike price after the stock drops 30 points to 20 and the volatility is 20?</p>
<p>Not enough. :)</p>
<p>INTC’s tech show IDF is great. They have some really great stuff coming out next year and they have 14 nm up and running (Windows). The thing is the benefits to their bottom line will be in late 2014.</p>
<p>BCEagle91, you promise?</p>
<p>Maybe I will increase my position some day.:)</p>
<p>I’m basically forecasting based on what has happened in the past with their process advantage.</p>
<p>I will be in Intel again but I can’t say when right now. Though I don’t think that it will be soon.</p>
<p>"If ANR opened tomorrow at $1 and I am short the $5 puts, really, what am I going to do?</p>
<p>It does help to stay out of the speculative names when selling puts, but then, the
premiums are lower. "</p>
<ol>
<li><p>I wouldn’t sell puts on something I didn’t want to own which means you were willing to buy it at $5 and you would have lost more.</p></li>
<li><p>If I’m going to sell puts in something I may not want to own, it would be in things like spy, iwm, qqq etc - those things that you can go out far in time and know sooner or later its going to come back. I don’t have a clue what anr is but perhaps you could go out to 2014 or if you think its going to come back, sell in the money puts that go out some amount in time.</p></li>
<li><p>I had to do this with cat when I got greedy. I had to keep selling the 85 puts even though the stock was near 82, now I’ve kept collecting premium, sold the October 85 puts, and the stock is at 90.68, an example of should have let myself get assigned.</p></li>
</ol>
<p>BCEagle91,</p>
<p>Do you think INTC’s processing advantage will have the same positive effect as PC growth dwindles?</p>
<p>Do you still think Intc will have a major presense in smart phones and tablets?</p>
<p>And what kind of chips are used in gadgets like google glass? That may be the future? Phones will become glasses, jewelry, etc. We will be talking into our watches. I guess I may have to get a watch some day. :)</p>
<p>“1. I wouldn’t sell puts on something I didn’t want to own which means you were willing to buy it at $5 and you would have lost more.”</p>
<p>It helps if you don’t sell puts on things you don’t want to own.</p>
<p>If ANR dropped to 1, I would be screwed. I guess I could sell 1,000 otm calls against the 35 puts I am short or whatever it is. And hope the stock doesn’t rally. The odds that I could roll and make money in the ANR situation I described are pretty, pretty low.</p>
<p>I think you are pretty careful. I was short puts in Enron, and Wcom. Luckily, I closed those posistions out before the serious damage. Did lose though.</p>
<p>Enron and WCom weren’t Enron and Wcom at the time I sold those puts if you know what I mean.</p>
<p>People wanted to be long MSFT, INTC and CSCO in 1999. I bet there were plenty of traders happy to sell 50 level puts. A lot of rolling is necessary to make those losses back. A lot of years.</p>
<p>A rising market makes put selling look really good and we have had a rising market for 3 years. Just saying.</p>
<p>I don’t like to hold on to trading losers for years. If something doesn’t work, I reevaluate.
Sometimes it is better to just get out and make money somewhere else. Clear your head.</p>
<p>Can someone explain to me the difference b/w buying a deep in the money call option and selling a deep in the money put option? Why would I pick one over the other? Is it because in the former I am hoping to buy on a pullback and the latter I am expecting the stock to go even higher?</p>
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<p>It’s a process advantage. Basically transistors are smaller and the effect is that they require less power to do the same work. You can also fit twice as many on a wafer so your variable costs get cut in half with each new process. The wafers are pretty expensive so this isn’t trivial.</p>
<p>The thing about the smartphone market is that the processors are cheap. Intel likes to sell $200 to $3,000 processors that cost a fraction of those numbers to make. ARM chips are more like in tens of dollars area. The way to make big margins on mobile processors is to use a different architecture which uses far fewer transistors but does more work or does work more efficiently. Intel is good at this but the competition has had a big head start. The competition has to use contract fabs too and has resulted in problems such as getting fab commitments to make your chips in the quantity and schedule where you want them.</p>
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<p>Let’s say that I am hopeful.</p>
<p>Intel is a great technology company. They have great scientists that do great research and the overall company executes well - better than any other company in the world.</p>
<p>On the vision, marketing, pizzaz side, not so good. On making cool deals, not so good. When you have the best product in a market segment, you can get a little arrogant. The near death of your main competitor can make you a little complacent. I would have hoped for some kind of creative deal with Apple. They have done it before.</p>
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<p>I have not looked into google glass but I would guess ARM chips because they are cheap and operate in low power.</p>
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<p>I have a Garmin Forerunner 610 which is a GPS running (well, it can do bicycling and swimming too) watch. It performs a variety of computer-like functions. It has a touch screen and wirelessly syncs your running performance data to your PC and uploads it to Garmin’s training website where you can do all sorts of analysis on your runs.</p>
<p>It only has 8 hours of battery life in GPS mode though. There are a lot of power constraints on wearable devices. Going to smaller and smaller process nodes will help to decrease the power requirements of CPUs in these devices.</p>
<p>I love your post post BCEagle91.</p>
<p>A friend of mine works with Intc on pollution controls and my friend says INTC is fantastic. A company with class. Other companies…they will kill for money. Not Intc.</p>
<p>Anyway, you know so much more about technology than I do. The issue that makes things difficult for me is when we buy a technology company for the long term…I am talking years, we are buying future technologies of these companies. And, I have no idea what the future technologies are going to be. </p>
<p>Google is working on the Google Glass. I am sure Goog is working on things that I am clueless about.</p>
<p>The same with Aapl. For all I know, Aapl is working on a phone you can wear.</p>
<p>If the cost of the ARM chips are so much cheaper than the chips INTC makes, I guess I don’t get it. Maybe the market Intc is concentrating on isn’t going to be great. Maybe INtc does well with smart phones but the revenues aren’t there.</p>
<p>It was easier being long drug stocks where the companies just raised prices every year. :)</p>
<p>Krlilies, you are not quite ready for those options yet. That’s fine.</p>
<p>Depends on how deep in the money these options are and the likelihood that these
options end up out of the money.</p>
<p>You bring up an example and we can work it out.</p>
<p>Remember when we had to draw graphs in math class. If you draw a graph with profits on one axis and stock price in another, you can see the difference in how these strategies are going to work. </p>
<p>If option strategies are graphed, it makes things easier. My positions were always graphed out. Graphs paint a picture and pictures help.</p>
<p>I will give you an example…these are not actual prices. Just an example to get a flavor and get started.</p>
<p>Aapl is 675 let’s say I buy the 600 calls for 75 bucks, or I can sell the 750 puts for 75 bucks.</p>
<p>Make a chart…aapl at 550, 600 750, 800.</p>
<p>Buying the calls at those 4 prices, you lose 75 at 550, 75 at 600, you make 75 at 750, and you make 125 at 800. Do you see that?</p>
<p>Selling the puts…
At 550 you lose 125, at 600 you lose 75, at 750 you make 75, and at 800 you make 75.</p>
<p>Do you see that?
The profit and losses can be very different with those trades.</p>
<p>With the buying of calls, you have limited risk and theoretically unlimited upside.
Selling the puts, you have more risk, and limited upside.</p>
<p>So why would you sell puts instead of buying calls?</p>
<p>That is for later. :)</p>
<p>Do you understand what I wrote? </p>
<p>If not make a chart. :)</p>
<p>interesting article:[How</a> Price Momentum And Bull Markets Go Together - Seeking Alpha](<a href=“How Price Momentum And Bull Markets Go Together | Seeking Alpha”>How Price Momentum And Bull Markets Go Together | Seeking Alpha)</p>
<p>“Intel often uses the Intel Developer Forum (IDF) as a platform to discuss its long-term vision for computing as well as more practical business initiatives. This year, the company has discussed the shrinking energy cost of computation as well as a point when it believes the energy required for ‘meaningful computing’ will approach zero and become ubiquitous by the year 2020. The idea that we could push the energy cost of computing down to nearly immeasurable levels is exciting. It’s the type of innovation that’s needed to drive products like Google Glass or VR headsets like the Oculus Rift. Unfortunately, Intel’s slide neatly sidesteps the greatest problems facing such innovations — the cost of computing already accounts for less than half the total energy expenditure of a smartphone or other handheld device. Yes, meaningful compute might approach zero energy — but touchscreens, displays, radios, speakers, cameras, audio processors, and other parts of the equation are all a long way away from being as advanced as Intel’s semiconductor processes.”</p>
<p>[Intel</a> Predicts Ubiquitous, Almost-Zero-Energy Computing By 2020 - Slashdot](<a href=“Intel Predicts Ubiquitous, Almost-Zero-Energy Computing By 2020 - Slashdot”>Intel Predicts Ubiquitous, Almost-Zero-Energy Computing By 2020 - Slashdot)</p>
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<p>No, I didn’t. lol. If I bot a 550 call I would think my loss is 125 instead of 75. The rest is the same.</p>
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</p>
<p>Here, for 800 wouldn’t I make +125 too like the 800 call?</p>
<p>BCEagle91, what does that link mean to you?</p>
<p>Krlilies, ok…your post helped me see where you are. </p>
<p>If you buy an option, the most you can lose is the cost of the option. </p>
<p>So if you buy a call option for aapl paying 75, the most you can lose is 75, even if the stock drops 300 points.</p>
<p>If you sell a put option the most you can make is the price of the option. So if you sell a put option for 75, that is the most you are going to make. (exercising options can change things a little bit. Do you
understand the exercising of options?) </p>
<p>If a stock goes up 300 points, the most you can make selling a put is 75.</p>
<p>So…aapl is 675 and you buy the 600 calls for 75. The stock drops to 400. What is your profit or loss?</p>
<p>Aapl is 675, the stock drops to 400. You sold the 750 put for 75. What is your profit or loss?</p>
<p>Do you understand how calls and puts move with a stock price?</p>