Out of the many puts that I sold this month only 2 are in the money now. C and BIDU - this could work out well.

11/8/2007 2:12:43 PM

^ word. i'm thinking about getting long dated calls.

just reloaded on some more VMW and RIMM...had to sell some YTEc (which was doing fine in a bad tape), in order to free up cash.

11/8/2007 2:34:05 PM

How does a put work pretty much? You just go out and say "at this date I will sell this stock for X amount of money" and someone accepts?

11/8/2007 4:27:20 PM

Puts, calls, options, etc -- I'm totally clueless. Someone explain.

11/8/2007 4:35:14 PM

nevermind...i'm not explaining the spreads right



[Edited on November 8, 2007 at 5:10 PM. Reason : brb]

11/8/2007 5:01:31 PM

When C was at $36 I sold November puts on it at $35 for $0.95 a share. The put expires at the end of the third Friday of the month (next Friday in this case). If C is below $35 at close that day I have to buy it at $35/share regardless of how far below $35 it is. If it is above $35 then I don't buy it, but I get to keep the $0.95/share.

Conversely, I could have bought the puts for $0.95/share which would have meant that I would be selling the shares at $0.95/share. I would have done that if I had felt certain that the stock would drop below $34.05.

Calls work the opposite way. If I sold calls on a stock then I would have to sell it if it went above the strike price. I generally sell covered calls on around half of my stocks, especially blue chips. The only downside is that as your various stocks are called away you're pretty much losing your best performers and can end up with a shitty portfolio if you're not careful.

The option premium on puts and calls go up as the stock price approaches the strike price and you can buy or sell to close the position any time before it expires. Option trading can be pretty lucrative as they're much more volatile than stocks.

There are also a multitude of option plays involving mixtures of buying and selling stocks and puts on the same stock to minimize risk.

Ok, now someone correct everything that I got wrong there.

[Edited on November 8, 2007 at 8:33 PM. Reason : .]

11/8/2007 8:29:38 PM

Hi stakes gambling, just what was intended when the stock market was envisioned.

11/8/2007 8:59:14 PM

Buying a call- You're entitled to own a stock at the strike price you buy your call at, if the stock hasn't gotten at or above the strike price by exp., you lose your premium you paid for the call (bullish outlook)
Buying a put- You're entitled to sell a stock at the strike price, so if a stock that you buy a put on tanks, you're good, if it stays above the strike price, you lose your premium you paid for the put. (bearish outlook)
Selling a call- You're obligated to deliver a stock at the strike price you sell, usually if you sell a call you already own the stock (covered call), if you don't you're naked and take on unlimited risk (bearish outlook, or you're trying to take in additional money on the stock you already own)
Selling a put- You are selling the right for someone to sell you the stock at the strike price you sold, most do this in a spread of some sort, otherwise you're naked and take on unlimited risk (bullish outlook)

Quote :

"The option premium on puts and calls go up as the stock price approaches the strike price"

volatility increases the price of options, which is incredible right now

[Edited on November 8, 2007 at 9:18 PM. Reason : .]

11/8/2007 9:13:28 PM

I'm thinking of picking up some WaMu...it's been utterly destroyed because of fears of subprime exposure. It's down to ~ 6 P/E and if the dividend doesn't change the yield is upwards of 12%

11/8/2007 9:15:57 PM

no chance in hell they keep the dividend

11/8/2007 9:28:59 PM

I was gonna say the same.

11/8/2007 9:35:07 PM

Quote :

"just reloaded on some more VMW and RIMM...had to sell some YTEc (which was doing fine in a bad tape), in order to free up cash."

Ouch.

11/9/2007 10:09:14 AM

Quote :

"Buying a call- You're entitled to own a stock at the strike price you buy your call at, if the stock hasn't gotten at or above the strike price by exp., you lose your premium you paid for the call (bullish outlook) Buying a put- You're entitled to sell a stock at the strike price, so if a stock that you buy a put on tanks, you're good, if it stays above the strike price, you lose your premium you paid for the put. (bearish outlook) Selling a call- You're obligated to deliver a stock at the strike price you sell, usually if you sell a call you already own the stock (covered call), if you don't you're naked and take on unlimited risk (bearish outlook, or you're trying to take in additional money on the stock you already own) Selling a put- You are selling the right for someone to sell you the stock at the strike price you sold, most do this in a spread of some sort, otherwise you're naked and take on unlimited risk (bullish outlook)"

Thanks.

So can you do these very long-term, like 3 months or 6 months into the future?

11/9/2007 10:12:37 AM

can anyone explain how ddm and dxd work? They're an ETF that attempts to double the dow or double the inverse of the dow. i can't seem to find the risk involved, but i know it's there. thanks.

11/9/2007 10:20:34 AM

Quote :

"I'm thinking of picking up some WaMu...it's been utterly destroyed because of fears of subprime exposure. It's down to ~ 6 P/E and if the dividend doesn't change the yield is upwards of 12%"

They're under investigation by the New York Attorney General for collusion and fraud as well.

11/9/2007 10:45:04 AM

Ugg...I think I'll go throw myself out the window.

11/9/2007 11:10:32 AM

bought some more VMW and RIMM

got to buy low

11/9/2007 11:38:57 AM

Yeah but all my money is in the market right now ... kinda defeats the point.

11/9/2007 12:34:25 PM

Quote :

"So can you do these very long-term, like 3 months or 6 months into the future?"

Yes. Time, volatility, and stock price all impact the premium. The further out you go, the higher the premium is because of the increased uncertainty. A lot of my long positions are stable and pay a dividend and fluctuate very little. You have to go out a few months to get a good premium. Covered calls allow me to make 15%+ annually on some blue chips (dividend included).

11/9/2007 2:58:40 PM

gonna have to transfer more cash in to buy some more AAPL

11/10/2007 12:04:17 AM

arent ETF's generally better off for people investing lower sums of money?

i'm totally regretting not taking some advice and moving all my money into bonds a few weeks ago. Too late now.

11/10/2007 12:11:41 AM

investing all your money in bonds when you're in your 20s is just really poor advice

11/10/2007 12:56:18 AM

its technically not my money yet, but i control how its invested.

[Edited on November 10, 2007 at 2:06 AM. Reason : dd]

11/10/2007 2:05:52 AM

at this stage in your life, you can withstand variance.

go for it, for a higher expected return

11/10/2007 2:08:18 AM

Quote :

"arent ETF's generally better off for people investing lower sums of money?"

Yes and no.

ETFs (of the index variety) are great to diversify across various stocks and across various industries. They're also a useful spot to park money when deciding on plays in specific industries/stocks.

Some of the other ETFs (industry specific, emerging market, BRAC, etc.) are handy for investing in an industry or country where it's difficult to do individual stock research (e.g. foreign countries) or in competitive industries where it may be difficult to pick a likely winner.

The problem with investing small amounts of money is that the commissions can add up to a sizable precentage of your cost basis. If you have a few thousand dollars and you want to park it in some ETFs for awhile, that's probably not too bad. If you want to buy a few hundred dollars every month, that's not such a hot idea.

11/10/2007 8:13:51 AM

investing all your money in bonds when you're in your 20s is just really poor fucking god awful stupid advice.

11/10/2007 9:36:44 AM

i think they meant because things are choppy - not long-term bonds as a total investing strategy

what's it take to get into a 7 day tax-free floater - those are pretty much liquid

[Edited on November 10, 2007 at 9:55 AM. Reason : sdfgdg]

11/10/2007 9:50:40 AM

Quote :

"i'm totally regretting not taking some advice and moving all my money into bonds a few weeks ago"

Who gave you such horrible advice?

11/10/2007 10:22:45 AM

^^^ i'd agree with that if the money wasn't needed now. Investing your money in bonds is a stupid idea if you're 20, yes because you can stand the fluctuations of the market. But, for someone who is say, in their 80's right now, and needs the interest off the account now, its a much safer and smarter path. If i was thinking completely to myself, yeah, i would keep it in stocks, switch it to mostly international stuff and ride the waves, but, my main interest is in the person who's actually using the money right now, not how much can i make off of this before its mine sort of deal.

the stock market has just dead fall bounced,(i'm sure you understand this, but for example, when you throw something off a building, it bounces before it hits the bottom) i really don't expect it to go up anytime soon, while my international stuff will probably do just okay, anything domestic i own i don't expect to see a gain on anytime in the near future.

You guys can criticize me for any of this, but a really good friend of mine is a well respected worldwide economist (goes on bloomburg and MSNBC at least once a week, writes various articles etc) and we've discussed this a lot. He completely agrees with me, and also yelled at me yesterday for not throwing the majority of portfolio in bonds weeks ago.

[Edited on November 10, 2007 at 10:25 AM. Reason : sadadas]

11/10/2007 10:24:48 AM

Ok, so you're not investing it for yourself?

11/10/2007 10:31:55 AM

in the short term, no. in the long term, yes.

i've taken a major hit in the past two days and man its depressing to look at

[Edited on November 10, 2007 at 10:36 AM. Reason : ]

11/10/2007 10:33:08 AM

Any predictions for tomorrow & the rest of the week?
Think we'll see things slide further? That would make me very sad.

11/11/2007 8:42:46 PM

I was in a restaurant today and there was a muted tv on Fox News. The caption was something about why the Dow will hit 15,000 by the end of the year. I'm bummed that the tv was muted as that makes no sense to me.

11/11/2007 8:52:33 PM

i think you've already read above. But i think that little up before was just a dead fall bounce.

11/11/2007 8:52:57 PM

predicting tops and bottoms on wall street is a tough job - in fact i don't know why anyone would trust themselves to predicting "we are at a top" or "we are at a dead fall bounce"
economist have successfully predicted the last 15 of 4 recessions...
and cnbc...well i dont have to say much on their account

and if you do not plan to use your portfolio money in the next 15-20 years, why in the hell would you put it in bonds?

11/11/2007 9:06:48 PM

the leveraged etfs (double returns of X index) are interesting
check out this article:

http://seekingalpha.com/article/35789-the-case-against-leveraged-etfs

basically, there is no free lunch, it doesn't quite work out that you can double the returns of the followed index on a YTD basis with the same risk

11/11/2007 9:12:34 PM

asian markets arent making tomorrow look so good

11/11/2007 11:20:24 PM

^^^ because if you read what i wrote, i'm using the money right now.

11/11/2007 11:45:00 PM

^^^^

Quote :

"Plenty of earnings strength: On April 20, when the Dow was approaching 13,000, I wrote that the elements were in place for the stock market to continue its upward trajectory. Earnings results from the March quarter were healthy, robust and sustainable. The same holds true for the early earnings results announced so far for the June quarter. Sure, we have pockets of difficulties like the financials, housing and some pharmaceuticals. But there is plenty of strength in sectors like energy, technology, medical devices, specialty retailers and infrastructure. Many other sectors are also reporting strong current earnings and solid guidance for the remainder of the year. Robust M&A volume will continue: Relative interest rates are still low and basically unchanged from Dow 13,000. The cost of capital is attractive and many corporations have put their money where their mouths are, leading to record share buybacks and active merger and acquisition ( M&A) activity. The private equity/merger and acquisition transactions may slow down a bit, but it won't dry up as some are predicting. Wall Street and investment bankers have a way of "making it work." Deal terms and pricing structures may change a bit, but the deals will not go away. There will be some terrific, well-thought out deals and, as always, with any "hot transactional" market, some dumb deals. The potential for M&A will keep many stocks valuations attractive. Mortgage market should stabilize: The US markets were trying to decipher the sub-prime mortgage mess back in April, and here in June they are still trying. The issue has not gone away, but the major banks appear to be handling the problem. The banks are aggressively identifying customers at risk and are trying to re-finance the loans, lower the rates, or whatever it takes. Reserve requirements have been raised after the first quarter and second quarter, but no major bank has missed its quarterly estimates. Higher fee income has absorbed mortgage delinquencies. The sector is still depressed, but value players are and should be looking at the group."

that was what i found, i was interested to see why they think it'll hit 15000 also.

11/11/2007 11:47:22 PM

http://finance.yahoo.com/intlindices?e=asia

Should I go ahead and start crying now or wait until our markets actually open?

11/12/2007 1:26:52 AM

damn, check out ETFC.

oversold much?

11/12/2007 1:58:58 PM

Heh, buying opportunity?
Or...shorting opportunity....?


I think I'll start shorting stocks. My track record recently is that I buy something and it instantly drops.

11/12/2007 2:06:34 PM

you'll do well till the market rebounds

11/12/2007 2:07:52 PM

Hopefully that will be sometime soon.

11/12/2007 2:33:12 PM

I sold as much as I could stand to part with before this latest drop. All I have left now is some apple.

Unfortunately, I dont think the drop is quite over yet. I think ill sit and wait a little while longer, although when I come back in to buying, I wont have as much to play with....

Dont get married .... Youll end up wasting your money on a house that you have to do chores on.

11/12/2007 2:43:21 PM

wow, getting my ass handed to me...got in Thursday and Friday, and a little bit more today

11/12/2007 4:34:00 PM

Between Friday and today, stop market sell orders took me out of all my NASDAQ stocks.

11/12/2007 4:41:06 PM

I'm still in GOOG, hoping this was the bottom.














It wasn't.

11/12/2007 7:41:25 PM

just moved some more money in for some buying

11/12/2007 7:46:18 PM

i took a pretty bad beating myself.

ah well, i'll just buy in soon and wait it out...

11/13/2007 7:00:24 AM