<p>The guy on the other board does intraday technical analysis on TNA (and TZA when appropriate) - that is when he’s not really busy at work and he issues buy and sell signals on an intraday basis and a longer-term basis. I’m far more comfortable buying the ETFs than playing with the options and I like to trade what I’m comfortable with.</p>
<p>Tna has been a big winner. Trading tna has been a big positive for you. Congrats.</p>
<p>Did that guy buy tza?</p>
<p>How come you weren’t stopped out when tna dropped to 75?</p>
<p>I like this article…tna has done better than triple iwm’s return over the last 3 months…</p>
<p><a href=“http://blog.quantumfading.com/2009/07/12/measuring-leveraged-etf-decay/[/url]”>http://blog.quantumfading.com/2009/07/12/measuring-leveraged-etf-decay/</a></p>
<p>Yes, he bought TZA and got stopped out. He should have flipped back but he acknowledged that his psychology had put him in bear mode and he couldn’t go back to bull mode even though the indicators told him to.</p>
<br>
<br>
<p>I had a look at the chart and he was completely correct to exit TNA on Feb 20. The trendline from Nov 18 with support points in late December was breached with a long, red candle.</p>
<p>I normally pay attention to the 50 and 200 DMAs for support and resistance and TNA didn’t even touch the 50. It found support at the 45. I’d love to say that I saw support at the 45 but there were two main reasons why I didn’t sell:</p>
<p>1) I was working on a project at work which requires a lot of attention and a minimum of distractions to make a lot of progress and I did make a lot of progress on it.
2) The guy that runs Leavitt Brothers provided technical reasoning as to why this would be a correction in a larger bullish move. So I didn’t worry about it very much.</p>
<p>A possible third reason is that I’ve been fairly bullish on the economy since last fall and I think that many of my posts have reflected that. We certainly have problems but there are things going in the right direction too.</p>
<p>Ok…</p>
<p>Great trade in tna.</p>
<p>I like reason number 1… :)</p>
<p>“Yes, he bought TZA and got stopped out. He should have flipped back but he acknowledged that his psychology had put him in bear mode and he couldn’t go back to bull mode even though the indicators told him to.”</p>
<p>This is a problem I have seen many times by so many traders.</p>
<p>I’m far more comfortable trading something where my maximum loss is much more limited and I have means of protection</p>
<p>Whipsaws are psychologically tough.</p>
<p>When I sold GOOG the other day, the correct thing to have done would have been to short it given my analysis. That’s what the mercenary trader would have done. It’s just as hard for me to switch directions even though it’s the correct thing to do.</p>
<p>Well doct, like I said before, I trade similarly to you, but we aren’t long tna either. Even if you count iwm calls, BCEagle 91 has a much bigger position. </p>
<p>There are many ways to trade. We can all make money and trade differently.
BCEagle91 is more aggressive and it works for him.</p>
<p>I don’t like to short that much…</p>
<p>I guess with the dow up 8,000 points…shorting wasn’t that great overall. I am sure there were pockets of great shorts. I own some of them. :)</p>
<p>I’ve never trade more than 10 IWM contracts at a time and with the leverage of options, I’m never very long the market. As an example, I was looking back this year and on 1/18, I had bought 10 iwm 2/16 80 calls for 8.25. I didn’t go farther out in date because I feared the sequester. Congress this year has really f*<em>k</em>d up my trading as I’m sure it has done with others. I did sell those options for 11.65 on 2/14 for a 40% gain in one month. Of course 40% of almost nothing is still nothing.</p>
<p>It is annoying to be in so much cash, doct. I agree with you.</p>
<p>You don’t want the $3400? I am sure many people would.</p>
<p>Those 10 calls are equivalent to fewer than 400 shares of tna…</p>
<p>Let’s just say it was 400 shares of tna. Possible back then.</p>
<p>When you were long those 10 iwm calls…you were long 4 deep in the money calls of tna. </p>
<p>You just cant escape tna, can you?</p>
<p>" I’m never very long the market"</p>
<p>Yet you are going to go 80 percent long if the market corrects 10 percent?</p>
<p>Well I look at the tna etf that was at 73 on the 18th and ~82 on 2/14. The $8266, I spent on the call options would have bought me 113 shares of tna and if I bought that instead of the iwm calls, I would have made $1019 compared to $3366 with the options.</p>
<p>Right…that is why I said 4 calls…</p>
<p>I am estimating here…</p>
<p>I was a market maker in the etfs iwm and tna. ;)</p>
<p>I know what you are saying. You can get the same upside buying calls as buying the leveraged etf while putting up less money with the calls while limiting your downside exposure.</p>
<p>I am not arguing this. I am teasing you. </p>
<p>I said you were smart, didn’t I?</p>
<p>I’m not certain how I would go long yet and I think I’ve got time to think about it. An example using iwm would be: its around 95 now, I buy the 9/21 55 calls for ~ 40 (these are just round numbers). I view this as being 100% long on iwm if have 95 - I’m planning on using the leverage in the options to get my stock exposure. I’d probably go more long than this and may also buy put protection with the difference in what I paid for the option and the price of the stock - in other words using some portion of the 40 for protection - maybe those ratio put spreads.</p>
<p>So for example…</p>
<p>Let’s pretend you have 95,000 in financial assets…</p>
<p>You are going to buy more than 8 iwm 50 calls and buy some put spreads for protection?</p>
<p>There are dividends in iwm. So in addition to whatever premium you end up paying…you indirectly pay those dividends if you don’t exercise… like the spy episode of this week…</p>
<p>If the option prices are less than the dividend or dividends…it may pay to buy stock and buy 50 puts instead… </p>
<p>I would ask Schwab if the amount of money you have to have in your account is the same if you are long stock and puts compared to just long calls.</p>
<p>Then I’d make certain that I was buying shorter term options, sell them and buy them back after the dividend is paid. For iwm, the yield is 1.86% - I’d give that up to get the extra leverage and less risk. I would also focus mainly on spy, iwm and qqq , not so much on individual stocks - maybe some stuff to get a little extra beta.</p>
<p>As I mentioned - I think I have time to think about this - maybe. It will be everybody’s luck that we get a small pullback - 2% and then a slow 10% grind up until the end of the year.</p>
<p>You might not have to buy shorter term stuff. </p>
<p>What are the iwm sep 50 puts? I am on an iPhone. It is a pain to look up quotes.</p>
<p>Ok I did look. The puts are offered at
10 cents. </p>
<p>I would call Schwab. Many times it might be better to buy stock and puts than calls when there is a dividend. </p>
<p>If the capital required in the acct is the same, it is better to buy iwm and the puts.</p>
<p>I have to think about after I finish looking at those stupid Schwab 1099’s. If the market drops 10 percent, it may go up very fast since many are waiting for this to happen. Maybe the pain trade is again a very small pullback and a slow grind up that keeps everbody off balance</p>