The next new position in our Paid-to-Play portfolio is: [Read more…]
[Options Premium] Hiding Out With the Aristocrats
While this certainly is not the market environment to be taking aggressive long bets in, there are some stocks that are displaying tremendous relative strength that we can play with strictly defined-risk positions to protect ourselves.
Our Young Aristocrats Report shows us stocks that aren’t just paying dividends but are doing so while they’re going up and thus paying us via price appreciation as well.
And this week’s report serves up a great opportunity.
[Options P2P] New Position: XLK
The next new position in our Paid-to-Play portfolio is: [Read more…]
[Options P2P] Adjustment to GDX Position
We’ve adjusted a position in the Paid-to-Play portfolio today: [Read more…]
[Options] When It’s Tough Picking Direction, Why Choose at All?
Look, we’re not going to sugarcoat it: it’s hard out there right now.
Regardless of your timeframe, if you’re trying to make aggressive long or short bets in this tape, you’re getting chopped up. So are we.
These types of markets grind us out and wear us out. It is what it is. We can’t choose the market we’re given, we can only control how we react to it.
This much we know — forcing directional bets right now feels like a fool’s errand.
But with options premiums elevated across the board, there are opportunities to put on delta-neutral short premium trades where charts suggest some consolidation may be taking place. However, we need to be careful not to sell premium on stocks that have earnings releases coming up soon. So to avoid that all together, we’re going to limit our universe to index and sector ETFs. [Read more…]
Anything Can Happen. Be Ready.
The best trade I ever executed was a loss.
That is not a typo. I lost money on this trade. Actually, it was a series of trades. But it was executed with one decision and one combination of keystrokes.
It was the summer of 1998, and it was my first year trading.
The Long-Term Capital Management debacle was weighing on markets. There was money being made on the short side. Big money.
Many of the more successful traders in my office had already earned a boatload of cash with aggressive short trades on this particular morning. And at lunchtime, they decided to head out to the golf course to celebrate another day of crushing the markets.
But not me.
Nope, I was still a piker trader at that time, still trying to figure out how to stop losing money. So while the rest of the guys were high-fiving each other on the way out the door to the golf course, I stayed at my desk banging keys, trying to catch up to the big shots.
As we moved through the sleepy lunch hour, markets were showing signs of another leg down and I was building a short position in about 8-10 stocks. Slowly at first. Small amounts of shares. Nibbles, really.
But my conviction in my bearish position continued to rise as S&P futures fell. So I continued to increase my position. I was shorting the big dogs at the time: Microsoft, Intel, Yahoo, Worldcom, Dell, eBay, and a few other semiconductor stocks.
Over the course of about an hour, I had gotten my position big enough that it was actually starting to make me uncomfortable. It wasn’t my largest position ever, but it was still uncomfortably large for me. I was making a little bit of money – not a lot – in this position, but I was already starting to count the winnings I was surely about to earn when the bottom fell out of the market and skidded toward the closing bell.
And then the unthinkable happened… [Read more…]
[Options P2P] Adjustment to XLU Position
We’ve adjusted a position in the Paid-to-Play portfolio today: [Read more…]
[Options P2P] Adjustment to SMH Position
We’ve adjusted a position in the Paid-to-Play portfolio today: [Read more…]
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