<p>Ok…I called Schwab. If you buy the stock and the 50 put. You have to put up the money for both the stock and the put even though your risk is only down to 50.</p>
<p>Calls you just have to have the the cost of the call in the account. So calls have a smaller capital requirement.</p>
<p>That is a bummer.</p>
<p>Filled up for $3.41 this evening (about 30 cents from the high). Looks like the high prices caused by the summer gasoline switchover are fading - hopefully this boosts consumer confidence a bit.</p>
<p>I think it is 4.25 here. Some stations might be 4.00</p>
<p>CA is different.</p>
<p>This could be a very big story.</p>
<p>[Cyprus</a> Bailout Risks Europe Bank Runs - Business Insider](<a href=“http://www.businessinsider.com/cyprus-bailout-risks-europe-bank-runs-2013-3]Cyprus”>Cyprus Bailout Risks Europe Bank Runs)</p>
<p>[Cyprus</a> Bailout: Statement by the President of the Republic Mr Nicos Anastasiades - Business Insider](<a href=“http://www.businessinsider.com/cyprus-bailout-statement-by-the-president-of-the-republic-mr-nicos-anastasiades-2013-3]Cyprus”>Cyprus Bailout: Statement by the President of the Republic Mr Nicos Anastasiades)</p>
<p>It’s 4.09 in my town. I haven’t seen any price declines.</p>
<p>Lets see… a truly global crash will of course bring everything down, but if I lost confidence in European banks, I would pull my money out and put it in a US bank. Bernanke is not going to let our banks go under, and we already know that FDIC insurance is not unlimited. Perversely, the crisis in Cyprus could boost US stocks further. The new flight to quality would be US stocks.</p>
<p>NJres, that is interesting analysis…</p>
<p>Gas at the cheapest place here is $3.66. Down about $.20 over the last few weeks. Was wondering why the price was going down.</p>
<p>“Ok…I called Schwab. If you buy the stock and the 50 put. You have to put up the money for both the stock and the put even though your risk is only down to 50.”</p>
<p>I’m not sure why you would buy the 50 put when iwm is at 94.75 , that’s a mighty big loss. I would buy a ratio put spread when we get the 10% correction as protection for my long position and the possibility of it getting to a 20% correction. A 10% correction would put iwm at 85. Unless we’re going into a recession which I doubt, I wouldn’t really expect more than 10%. </p>
<p>I’m not at all following your reasoning for why one should buy the stock (besides the dividend which is 1.85%) than the calls.</p>
<p>One of the stations that I went past last night still had older prices, about $3.67. Strange to see a $0.26 difference in prices in the same town. I assume that the station I went to dropped their prices due to what it’s costing them a bit earlier than the other station.</p>
<p>Actually, my “analysis” is probably wishful (delusional) thinking. Stocks are so over-ripe for a correction the more likely scenario is a push downward in stock futures leading to a sharply lower open, while US treasuries benefit from the traditional flight to quality. </p>
<p>I really have no idea how significant this Cyprus thing will be; is it so tiny that it is insignificant or the first domino that brings down the entire EU financial system?</p>
<p>Doct, you wrote 55 calls in post 5774. I was feeding off your post. I thought you wrote 50 calls.</p>
<p>The div averages something like .45 a qtr. (It is not the same amount each qtr).
If you are long the stock, you get the dividend. As you know if you are long the calls, you don’t. If the cost of owning the stock and puts is the same as the calls, and the capital requirements are the same for both positions, owning stock and puts are more lucrative than owning the calls.</p>
<p>As an example…if the choice is long 10 calls or long 1000 shares of
stock and long 10 puts of the same strike with costs the same, and the dividend is .45 a qtr for 2 qtrs…</p>
<p>Being long stock and puts is $450 more profitable per qtr because that position gets the dividend. If there are 2 dividends, that is a profit of $900.</p>
<p>What I wrote affects every option where the stock or etf pays a
dividend. Most option traders don’t understand this. These little things can add up. Especially when you trade multiple times.</p>
<p>Every option has a relationship with each other. Most traders don’t understand this either.</p>
<p>Yeah…you can buy shorter duration options…and go in and out at dividend time, (if you remember), but there are risks and costs to that.</p>
<p>BCEagle91, I guess people don’t necessarily shop gas that carefully or choose convenience over price. Also, I wonder about the cost of gas to the dealers.</p>
<p>The article said that a Russian Oligarchs have money in Cypress. I have a difficult time believing that. The Russians take their money out of Russia because they know it might be taken from them in Russia. So why would they put it in an unstable country like Greece where it also might be taken? On the other hand, maybe they think that because the money is held in euros, its safety depends on the stability of the euro and the stability of anyone country.</p>
<p>[Why</a> today?s Cyprus bailout could be the start of the next financial crisis](<a href=“http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/16/why-todays-cyprus-bailout-could-be-the-start-of-the-next-financial-crisis/]Why”>http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/16/why-todays-cyprus-bailout-could-be-the-start-of-the-next-financial-crisis/)</p>
<p>[The</a> Botching of the Cyprus Bailout: Worse Than Lehman Brothers - Forbes](<a href=“http://www.forbes.com/sites/eamonnfingleton/2013/03/17/the-botching-of-the-cyprus-bailout-worse-than-lehman-brothers/]The”>The Botching of the Cyprus Bailout: Worse Than Lehman Brothers)</p>
<p>I think (not 100% sure) Cyprus banks have been paying much higher interest rates for their deposits, ie much higher than German banks for the same Euros, so it shouldn’t be as shocking as these articles portray that depositors will now lose up to 9.9%. They still might come out ahead of an American who has been earning .01% on his FDIC insured deposits in a US bank for the past several years and still has 100% of his money.</p>
<p>That is a great point…</p>
<p><a href=“http://cyprusbank.org.ua/index/0-8[/url]”>http://cyprusbank.org.ua/index/0-8</a></p>
<p>That’s a good point NJRes. That would explain why the Russian took more risk by keeping money in Cyprus.</p>
<p>I am very worried about the effects of the idiotic decision to take money from depositors. I don’t see how if you are a depositor in a Eurozone bank you could feel confident that your money is safe and that at least a chunk won’t be taken from you. I would also worry that the next guy would decide to pull his money and that would leave me holding more of the bag so I’d pull my money. That is a bank run. </p>
<p>So more money flowing into the US dollar. Perhaps huge stress on the existence of the Euro, this one day after Trichet put out an op-ed in the NYT about how austerity has built confidence. And of course political stress because governments have to vote on these things and at some point you worry about nationalists/fascists/whatever taking over and destroying the financial structure. </p>
<p>I hope my worries are over-blown.</p>