<p>Well…not too much chatter today…On a down day.
I will talk. :)</p>
<p>I did not like that unemployment number today…
When the market confirmed my thinking… I knew I was going to cut back a little bit.
My long term stuff…did not touch that stuff today…because long term…who cares about the number…</p>
<p>Short term…I decided to buy in some of my short puts…Just in case…</p>
<p>Trading is like playing poker…you don’t have to play every hand…and you can fold your hands…</p>
<p>There are traders that trade throughout the day…but…Traders don’t necessarily have to trade every day…or every week…traders can wait until they think the odds are in their favor and then trade. Also…the size of the bets can vary…just like poker.</p>
<p>Susquehana hires their traders based on their poker skills. </p>
<p>12,000 before 13,500… Just got back from a class field trip and digesting all the news…been 50 % cash, and then some shorts,some bonds, and 25% long…pullback is necessary and will get the cash off sidelines…</p>
<p>I spent 2.5 hours on the tennis court and I did have work to do today (spent a lot of hours in the office this week) and what was there to say?</p>
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<p>I will read the analysis over the weekend (feel free to post links - though maybe they would be better on the 1/2 grads can’t find work thread - I’ll post stuff there that I find). I was a bit surprised that the number was so weak. I would like to look at the state numbers for NH and MA to see if they bucked the trend. Things don’t really feel that bad here.</p>
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<p>Good thing to do on your trades.</p>
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<p>That’s the way that I feel, though up to a point. All of my stuff right now is long-term.</p>
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<p>I’m considering doing something that would be a lot of fun for me - investigating something that is of high importance in the scientific community for which I have some unique skills but I would have to learn a lot about the field which might not be that easy at my age. This is similar to me learning about Mozilla and making contributions there that affect a lot of people. It’s a count-the-cost type thing - it’s the sort of thing that I enjoy a lot but there’s a lot of ramp-up in education. There’s absolutely no money in it at all - just a contribution of time and effort into science. Stuff you do when you don’t have to deal with kids.</p>
<p>"When the market confirmed my thinking… I knew I was going to cut back a little bit.</p>
<p>Good thing to do on your trades."</p>
<p>Thanks.</p>
<p>“I’m considering doing something that would be a lot of fun for me - investigating something that is of high importance in the scientific community for which I have some unique skills but I would have to learn a lot about the field which might not be that easy at my age. This is similar to me learning about Mozilla and making contributions there tha
t affect a lot of people. It’s a count-the-cost type thing - it’s the sort of thing that I enjoy a lot but there’s a lot of ramp-up in education. There’s absolutely no money in it at all - just a contribution of time and effort into science. Stuff you do when you don’t have to deal with kids.”</p>
<p>Yea, was sweating it as the Dow has been on fire…Still see no signs of doom, i don’t know anyone unemployed, everyone is getting an increase,albeit small…friends sold their home for 50k more then i thought it was worth…D is going abroad for a few weeks with school, and there was a waiting list to go…figure 5k minimum for 15 days, though she gets credits for it…woohoo</p>
<p>He has a hand condition that fewer than 100 people have…luckily he found a great specialist and my friend is recovering.</p>
<p>My friend was an assisstant manager of a retail store. He lost his job. Has been unemployed for 7 months. Is applying to jobs…so are tons of other people. Retailers are getting squeezed by the internet. Pay is going down…except for those at the top. Benefits are getting cut …except for those at the top. My friend told me that a key
employee…that affected the pnl of the store… was making 7 bucks an hour…before getting bumped up because miniumum wage was bumped up.</p>
<p>His wife hasn’t had a job for 3 years. They filed bankruptcy last year. His mother gives him money every month,
but she doesn’t have money trees.</p>
<p>If it wasn’t for the safety net…he would be screwed.</p>
<p>He looks for a job everyday. Hopefully…he will get one soon. He is 55.</p>
<p>Just giving you a different side…
People are suffering…</p>
<p>No question,i have always prefaced my comments( except for the last one,lol) that we have been very fortunate…i just said that to D1, who came home for the night to get CC and cash for her trip next week…i also tell them ,i seriously doubt they can afford this lifestyle that we have been fortunate to provide…they don’t get simple things like bank fees and how to avoid them…so i do all the leg work, but said it is time for them to start figuring this all out…i also said this summer she should contribute to the 401k program, even if 25-50 a paycheck for 4-6 weeks…</p>
<p>Apple got smacked, Intel retraced the breakout, PBA was up 2.16% today, NKE retraced the breakout, WFM dropped .8% after making a higher high but still retains the vast bulk of post-earning gains, EQR was up .3% and up against resistance, CEF was down a little - unusual as gold and silver were up. QLD was smacked to horizontal support. So not a good day but there’s a lot of my stuff at support right now.</p>
<p>I am going to talk about options for a second…</p>
<p>There was an example of a trade using options…</p>
<p>Intc was around 28. And the May 29 calls with a little over 3 weeks to expiration were trading around .14. And the question was brought up…what happens if intc rises to 29 and you don’t want to lose the stock. One solution was…you buy more intc stock if it gets
To 29. So if you are long 1,000 shares of stock at 28, And Short 10 of the May 29 calls …stock goes to 29…you don’t want to lose the stock…you buy an additional 1,000 shares of stock…to cover the short call position. You are now 2,000 shares long…short 10 calls…stock drops to 28…which is what happened…and now you are a loser. </p>
<p>Instead…stock rises to 29…you don’t want to lose the stock…you should roll the short calls to a longer term option…or a longer term option with a higher strike price…
For example…buy the may 29s in and sell the jun29s or jun 30s…</p>
<p>This other thing about covered writes…
I am long GM for about 20 a share. Stock rises to 24.5. I am indifferent about selling…I sell some mar 25 calls… For example…long 1,000 shares…I sell 5 mar 25 calls for .50…representing 500 shares. Stock closes above 25. So my calls are assigned and I sell 500 shares.</p>
<p>Now my position is long 500 shares…
Stock drops to 22.5…
I would love to sell some 25 calls… But the mays are trading for pennies…i sell the juns for .20. Not a lot of downside protection. And I am locked in for over a month if I keep this position. </p>
<p>I can sell the jun 23s or jun 24s…but now I am chasing the stock downward…and I don’t want to sell the stock at 23.</p>
<p>One thing about doing these trades…the premiums are low…so we don’t get much on each individual trade…we don’t get much downside protection…and if the stock drops we
don’t get the returns we think we are going to get.</p>
<p>I can’t assume because I sold the gm mar 25 calls…I can sell the juns, the julys, the augs. Etc…and I will make xxxx. The stock may drop…and the 25 calls might sell for peanuts.</p>
<p>Not understaning this… Ok you write the call option at 29 and the stock went up to 29 and unless it advanced to more than 29.14 You should not have the risk of being called. To buy it back or roll over as you say, the 29 call at that time will cost dearly… maybe 50c? so, what you did is to pay 50c to buy back the 10 calls and write June 29s or 30s calls? how much will you get? 20c or Jun29 5c for june 30? Right there you lose a lot.</p>
<p>If I were doing this I will buy calls not write calls. and buy covering puts to make the loss minimum.</p>
<p>What happen to the options at the end, if it is in the money? Do you have to excecise them? I have never take a delivery of stocks or commodities, I’ve always sold the options way before the witching hours.</p>
<p>The options are automatically exercised if the options close in the money. Call your brokerage firm to verify.</p>
<p>Your idea of buying the calls back and buying the puts. If it costs .50 to buy the calls in and .50 to buy the may 29 puts…</p>
<p>This will make more money than my example if…</p>
<p>The stock at may expiration is below 28.14…or above approximately 30 (depends where the jun calls are trading).</p>
<p>However…below 29 at expiration…if you still want put protection and you don’t want to exercise the may puts…you are going to have to roll the puts and that is going to cost money…</p>
<p>Jym626…we will see…it’s a work in progress…:)</p>
<p>One more thing …just to make it complicated…below 29 in your example artloversplus…you no longer have any net stock position…</p>
<p>So if the stock drops below 28.14 before expiration</p>
<p>And you want a stock position…</p>
<p>You can buy the stock…for example instead of owning 1,000 shares of stock and 10 may 29 puts…let’s say the stock drops to 27.90…</p>
<p>You buy 1,000 shares of stock at 27.90… You are now long 2,000 shares of stock and long 10 puts…</p>
<p>Your breakeven is 27.66 you are long 1,000 shares up to 29 and above 29…you are long 2,000 shares…and you aren’t short any calls to limit your upside…</p>
<p>Artloversplus…you don’t have to exercise options that close in the money at expiration. Options exercise automatically if you do nothing. You can tell your brokerage firm not to exercise the options. Still call your brokerage firm to verify and find out how to do this. :)</p>
<p>“Your breakeven is 27.66 you are long 1,000 shares up to 29 and above 29…you are long 2,000 shares…and you aren’t short any calls to limit your upside…”</p>
<p>Breakeven is 27.76…i would like to delete the last few posts. :)</p>
<p>Learned something new on Friday. SPY 137 puts that I sold the Friday before were near the 137 strike price. I usually don’t read the fine print on the trade (a mistake). I realized at about 3:00, with spy hovering around 137.2 that it trades to 4:15. It dropped continuously the next 15 minutes. After 4:00 I rolled it out to next Friday with a strike of 133. It closed below the 137 and I would have been assigned - not the price I wanted going into the weekend with angst in the European elections. If it goes below the 133 during the week, I’ll roll it over again.</p>