Comments on: Let’s Take a Test: Can You Answer Correctly? https://www.thebluecollarinvestor.com/lets-take-a-test-can-you-answer-correctly/ Learn how to invest by selling stock options. Tue, 11 Jun 2019 15:10:02 +0000 hourly 1 By: Jay https://www.thebluecollarinvestor.com/lets-take-a-test-can-you-answer-correctly/#comment-212921 Tue, 11 Jun 2019 15:10:02 +0000 https://www.thebluecollarinvestor.com/?p=18328#comment-212921 In reply to Hoyt T.

Thank you Hoyt,

I know I speak for all of us in expressing relief and joy with your prognosis!

You are not alone getting caught by this market surge in part of your trading. I have open puts and debit put spreads against the retail and energy sectors and am getting spanked at the moment!

Since you track VIX a fun – and always tiny – trade you might want to try in the last hour of the cash market on M/W/F if you see VIX moving counter to the rest of the day is what I call my “Lotto” trade.

The idea and term are far from original but it makes a tiny bet you are completely comfortable losing betting on a directional move into the cash market close. I use SPY or SPX M/W and QQQ on F with expiration in less than hour so I am trading intrinsic value. Anyway, it’s not called the “Lotto Trade” for nothing :)! It’s just a fun little gamble at the end of the day if you are following the market closely a few days a week. Doubles and triples in less than a half hour are common and I don’t care if I take a 50% stop out. The biggest moves often happen in the last ten minutes so I have orders pre-qued to click on. I am sure my broker loves me :)!

I read a nicely researched article about how Trump’s pain tolerance for S&P declines is around 2650. When the market is higher he threatens tariffs and does tough trade talk. When it reacts to that and drops he Tweets more conciliatory things walking back the tough talk to prop it back up again.

I guess one could make bank selling condors a few weeks out with the wings at market highs and Trump lows and keep rolling them :)? – Jay

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By: Terry https://www.thebluecollarinvestor.com/lets-take-a-test-can-you-answer-correctly/#comment-212918 Tue, 11 Jun 2019 15:04:43 +0000 https://www.thebluecollarinvestor.com/?p=18328#comment-212918 Alan;

I have a question about last weeks blog on stock repair strategy (I hope it’s not too late):

Your setup:

Buy FDX at $235.00

12/7/2018: FDX trading at $201.39
Buy 1 x $200.00 call at $10.90
Sell 2 x $210.00 calls at $5.45

I see three scenarios at expiration:
– FDX trading at less than 200
– FDX trading between 200 and 210
– FDX trading above 210

So what action needs to be taken at expiration?

– If FDX trading at less than 200, do you STC the 200 call prior to expiration and are left with the 100 original shares? Do you have to tell your broker not to exercise the call?

– If FDX trading between 200 and 210, do you STC the 200 call prior to expiration and the 100 original shares?

– If FDX trading above 210, is every thing unwound for you by the broker and you are left flat? Do you need to take any action?

Best regards;
Terry

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By: Hoyt T https://www.thebluecollarinvestor.com/lets-take-a-test-can-you-answer-correctly/#comment-212905 Tue, 11 Jun 2019 13:14:19 +0000 https://www.thebluecollarinvestor.com/?p=18328#comment-212905 In reply to Jay.

Hey Jay,

You must be physic. The follow up to my surgery was real good news. I have gained three levels of sight in my right eye. The surgeon feels I will have a complete recovery of sight in that eye in about 3-4 months. I go back to the retina surgeon, different doctor, in about six weeks. Unless the hole is growing, left eye, I will not have the retina surgery. I can live with the way it is now and it had only a 50-50 chance of success anyway.

I have failed to welcome new members to our fine group and I feel bad about that. So a belated welcome to all!:) This is the most educational trading blog with which I have been associated.
I had a technical analysis group back in the late 80’s which was excellent but we focused only on stocks and blogs were unknown then. We had to meet in person.

Alan, Barry, Jay, Mario, and others share wisdom with us almost daily. The rest of us share our personal missteps , foibles and sometime successes with all so that we can learn from out mistakes and successes.

Oh this market! On Friday, 6/7, with the VIX moving up I bought Puts on the S&P that expired Monday, 6/10. The market “should” have been down yesterday. What happened? Trump announced that the tariffs on Mexico would not be imposed on 6/10 as “planned”. As soon as I heard that, late Friday I think, I knew those S&P Puts were down the drain.

As I stated last week I am closing more positions that I am opening and building my cash reserve. I used the upside yesterday to close three positions, two stock and one ETF. I did open one position.

I bought $180 Calls on CRM expiring 07/19/19. Just a gamble that the sell off on the Tableau acquisition was overdone. The price may have been too high. Those holding Tableau(DATA) October $115-$125 Calls cleaned up. Look at the option chain for October ’19. No open interest to speak of anywhere but at these three prices. Over 10,000 at $120. Should have seen this coming?

An up market today, which according to the futures seems likely, at least at the open, seems weird given the fade after 12:00 yesterday. In my humble opinion this is one of the most schizophrenic markets ever. A melt up is just as possible as a melt down. Still convinced a recession is coming. It will be interesting to see how the Trump administration fights tooth and nail to prevent it. I remember Jimmy Carter trying everything to turn things around in 1980. Didn’t work then. Primarily because of Iran. It may be that China will be Trump’s Iran.

Good luck to all,

Hoyt

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By: Jay https://www.thebluecollarinvestor.com/lets-take-a-test-can-you-answer-correctly/#comment-212858 Tue, 11 Jun 2019 02:00:41 +0000 https://www.thebluecollarinvestor.com/?p=18328#comment-212858 Hey Friends,

It’s funny I have been such an old buzzard around here I recognize newer contributors like Greg and Mary as such 🙂

Welcome one and all.

Hoyt, I won’t pry but if you get any updates on your “peepers” please keep us posted! I’m keeping it light since I know you will be fine.

I have about 10 positions over written for June. Some are now ITM. I never saw that coming! This market has turned on a dime. Since I only trade options in my IRA tax issues are not relevant so I will wait until Friday afternoon the 21st to see where things are. A successful new week to all. – Jay

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By: Mary https://www.thebluecollarinvestor.com/lets-take-a-test-can-you-answer-correctly/#comment-212838 Mon, 10 Jun 2019 20:04:18 +0000 https://www.thebluecollarinvestor.com/?p=18328#comment-212838 In reply to Alan Ellman.

Thank you, Alan!

As with all your tutorials, the link made margin very easy to understand.

Mary

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By: Alan Ellman https://www.thebluecollarinvestor.com/lets-take-a-test-can-you-answer-correctly/#comment-212729 Sun, 09 Jun 2019 22:26:09 +0000 https://www.thebluecollarinvestor.com/?p=18328#comment-212729 In reply to Mary.

Mary,

There is no one correct answer to this question. I believe that margin accounts can be appropriate for experienced, sophisticated investors. However, in my humble opinion, margin accounts should not be used by most retail investors. Some sophisticated option strategies, however, require margin accounts.

Here is a link to an article I published on this topic:

https://www.thebluecollarinvestor.com/margin-accounts-and-covered-call-writing-2/

Alan

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By: Mary https://www.thebluecollarinvestor.com/lets-take-a-test-can-you-answer-correctly/#comment-212664 Sun, 09 Jun 2019 13:13:22 +0000 https://www.thebluecollarinvestor.com/?p=18328#comment-212664 Alan…… what are your feelings on trading on margin. I’m retired, trading actively for nearly 3 years. I’m keeping 40% of my $100,000+ account in cash.

Thank you.
Mary

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