Comments on Fund My Mutual Fund: Always a Silver Lining - We no Longer Own FCStone ...

To expand on options strategies.The inverse of a s...

2008-07-10T19:10:00.000-04:00

To expand on options strategies.

The inverse of a straddle is a strangle. It is if you think say MOS is trapped around 140 for a month. You sell the 140 calls and 140 puts. You make money if it stays within $10 of 140 by July expiration for example. I bring this up not to be annoying but because premiums are so high in this VOLATILE market that it is better to be a seller of options than buyer.

I think the better strategy for long leverage in this volatile (high option premium market) is call spreads because premiums are so high for the only good stocks (shortage stocks ) and it's dangerous to buy straight calls with this market. Like buy 160 MOS calls sell 170's you capture the 160-170 difference. The reason why I say this is because with the spread you sacrifice upside past the call you sell but, it is not a bad idea to give up upside for lower risk (less debit/net cost) because the overall market is bearish and probably puts a limit to upside anyway. Just thought I'd add that because most of these strategies were discarded during the bull market the last few years now we have to bring them back.

Once the fund is up perhaps you may have to keep in mind the options expiration game the fat cats on wall street play? Maybe someday you'll be big enough to partake in that scam and trap oh say GE at say $30 ;)

The funny thing I just realized is that many people I know hedge their portfolio by going long some VIX calls because they "usually" go up in sharp market declines. Too bad that didn't happen, I guess it is a horrible hedge.

yea its all about the volatility and expecting big...

2008-07-10T17:07:00.000-04:00

yea its all about the volatility and expecting big moves. typically you'll want to do the front month. but the trick with that is you need the move to be big enough so that it moves by the premium amount. best play is to find stocks with low expectations or low premiums because otherwise as you pointed out, no movement means losing some money.

thanks for the explanation. Sounds simple.So if t...

2008-07-10T15:19:00.000-04:00

thanks for the explanation. Sounds simple.

So if the stock doesnt move much you are also dead in the water. Do people usually use near term dates or far out dates for a straddle?

Google last time around would of done wonders :)
Literally you could of turned something like 20K to 490K in 1 night, I posted it on Bluedog website I believe. Take away the 20K you lost on the other side of that trade and I could live on the 470K win. hah

haha yea i used to be a simple options guy myself ...

2008-07-10T14:48:00.000-04:00

haha yea i used to be a simple options guy myself too. just gotta practice paper trading some strategies to make sure you understand how they work before actually doing them.

straddle is actually pretty easy. just buy equal amount of calls and puts at the same strike and the same month. you're expecting a big move, doesn't matter in which direction.

for fcsx the stock gets clobbered so the put's value gains. then the call you own essentially loses value or goes to zero, depending on which strike you selected. but, the kicker is that you have a defined risk of how much you can lose on that one losing position. whereas the winning side of the straddle can take off exponentially. only caveat is you really need a big move to justify it, otherwise you could take a small loss. but this market has provided us stocks that swing violently

Oa,I need to actually work during the day (sometim...

2008-07-10T13:05:00.000-04:00

Oa,

I need to actually work during the day (sometimes) ;)
EMR solid - not really my wheelhouse - I think this is one of Cramer's "new tech" i.e. companies that provide stuff that help make things more efficient or the world to run better. blah blah. ETN also of that ilk, and SPW which I like the chart far more than the others. I am more of a growth guys (faster growth)

j.
I'll need to hire a "options straddle" specialist. I'm just a naked put and call buyer myself ;) (or at most buy put protection versus long common) Once it gets more complicated than that I'll need to move it over to someone of your (or Blue dogs) pay grade. I'm a simple fella just trying to make a simple buck.

this is exactly why playing options straddles for ...

2008-07-10T12:46:00.000-04:00

this is exactly why playing options straddles for earnings has been very profitable in this whack market

Holy s**t!!! FCSX went thermonuclear!

2008-07-10T12:27:00.000-04:00

Holy s**t!!! FCSX went thermonuclear!

Hey!MArk, Quiet today?Any thought on EMR, GS added...

2008-07-10T12:21:00.000-04:00

Hey!MArk,
Quiet today?
Any thought on EMR, GS added to their buy list.

Helene Meisler on
Equity Put/Call Ratio
So far we have had three readings (half hourly) that are over 100% on the CBOE's equity put/call ratio. Might not be the first time in the whole downdraft on an intrday basis, but it is the first time I've seen it.

Yep very familiar with MRVL. Its been acting very...

2008-07-10T11:44:00.000-04:00

Yep very familiar with MRVL. Its been acting very well technically after being beaten to smithereens for a long time. Anything holding up moving averages after this morasse is signaling something - only today has it fallen to 50 day. On technicals alone it looks very promising

QCOM, BRCM, MRVL - some of the old tech is holding up quite well.

TMInteresting article on Marvel (MRVL).They are a ...

2008-07-10T11:41:00.000-04:00

TM
Interesting article on Marvel (MRVL).
They are a company that makes applications processing chips. They have received contract with Cummings to provide chips for diesel engines. It is trading right on 50 day-MA. Any thoughts??
KB