Stocks and Trading Thread - Channeling your inner Mono

[MadImmortalMan]

I'm out. Back to cash, shame there is nowhere decent to put it.

I'm mostly in cash coming out of the weekend. I closed all my Alcoa positions with a profit. All I have left is cash and some GLD. Not including the IRA, of course.


So today I got a couple slightly ITM calls in SLB and IBM, who both report this week.

[Ed Anger]

Goodbye Borders. I enjoyed your 50% off coupons.

[MadImmortalMan]

I'm mostly in cash coming out of the weekend. I closed all my Alcoa positions with a profit. All I have left is cash and some GLD. Not including the IRA, of course.


So today I got a couple slightly ITM calls in SLB and IBM, who both report this week.

I bought 2 calls on IBM yesterday ahead of the quarter announcement last night. Sold for a 2k profit. Hopefully I can do something similar with SLB on Friday.

[Ed Anger]

I've completed my 'debt ceiling apocalypse' prep just in case everything goes to hell. Which it won't, but better safe than sorry.

Also, News Corp is popping up on my radar. I grabbed 250 shares at around 15.8 something. Just for shits and giggles.

[Alcibiades]

Am enjoying Intel going up 3 and a half percent today.   


Not enjoying looking at the potential had I not been so stupid and sold a hundred or so shares of Apple 2 years ago. 

[MadImmortalMan]

August gold and silver options contracts expire in a week on 7-26. There seems to be a quasi-pattern of a dip or lull around expiration time and then a jump up afterward. We just came off a big gain though.

[MadImmortalMan]

Am enjoying Intel going up 3 and a half percent today.   

Looks like you gave it back. I tried to ride their quarter announcement and they failed me. Luckily Union Pacific made up for it. It was a wash. My SLB position is looking very good though. I'm fighting the urge to sell because I want to wait until after they report in the morning.

[MadImmortalMan]

Hopefully I can do something similar with SLB on Friday.

Yeah. I'm in this trade at a strike of 85.

Best winner of the week for me.


WTF happened to CAT? Glad I wasn't betting on their quarter.

[Alcibiades]

Am enjoying Intel going up 3 and a half percent today.   

Looks like you gave it back. I tried to ride their quarter announcement and they failed me. Luckily Union Pacific made up for it. It was a wash. My SLB position is looking very good though. I'm fighting the urge to sell because I want to wait until after they report in the morning.

Yeah It's terribly annoying.  They've beat expectations every quarter for the past like 18 months.  With this quarter a year ago being a record for profits, and they've managed to drop due to 'slowing demand' every time anyway.   

[MadImmortalMan]

Netflix reports just after the market closes tonight. I'm hoping for a pop like Apple and IBM had so I can cash in tomorrow.

[Admiral Yi]

I'm giving a tiny bit of thought to buying into a short gold fund.  I've got IRA funds on the sideline waiting for a major dip in the market caused by uncertainty over the debt limit and the end of QE2, but that has failed to materialize.

Anyone know how a short fund operates?  More specifically, how does a short fund stay alive at a time when the underlying asset is rising in price?  Seems to me if you keep on buying puts that are never in the money eventually you're broke.

More generally, any thoughts on the idea?  MIM, you seem to be kind of an Ouija board when it comes to commodity prices.

[HVC]

RIM firing more people today. 2000. another Canadian telecom gonna fail?

[MadImmortalMan]

I'm giving a tiny bit of thought to buying into a short gold fund.  I've got IRA funds on the sideline waiting for a major dip in the market caused by uncertainty over the debt limit and the end of QE2, but that has failed to materialize.

Anyone know how a short fund operates?  More specifically, how does a short fund stay alive at a time when the underlying asset is rising in price?  Seems to me if you keep on buying puts that are never in the money eventually you're broke.

More generally, any thoughts on the idea?  MIM, you seem to be kind of an Ouija board when it comes to commodity prices.

You have to be careful with ETFs on commodities, because there are a couple different ways they spot themselves to the commodities. Futures contracts and stuff like that don't always track the live prices well, and you can get movements too late to matter. The ones I like for gold and silver are the ones who actually have a physical inventory. GLS and SLV hold both bullion and paper, Sprott (PHYS and PSLV) holds actual bullion as 100% of the trust. Futures options can telegraph a bit on them. The number of open contracts is available data. One site that great for metals analysis is this one:

http://jessescrossroadscafe.blogspot.com/

Some of the best info is on blogs, actually. Today's post is a good example.

Tomorrow is option expiration on the Comex. I hear that there are quite a few call options open around the 1600 strike. So we would expect the price of gold to get hammered down below 1600 sometime this week.

When options are in the money, they are converted into open futures contracts. So there may be a lot of new holders of futures contracts who get a stiff gut check on Wednesday through Friday, if it does not come tomorrow.

I could have looked that stuff up, but hey.

Options expiration dates tend to have this pattern recently (well, since I've followed it). The options go in the money as the price goes up, get exercised at a lower strike, and bam. Everybody who is holding gold or silver futures and are short calls are suddenly selling their paper at strike because they have to and the market moves down.

He does a lot of charting too, but also tracks the inventories of the major clearing houses. Declining inventories is a signal of higher prices coming. There seems to be some distrust because they issue a lot more paper than they have inventory. So people insist on taking delivery and it compounds the problem.

As for a short etf, they are buying puts on the futures or on one or more of the commodity funds or various kinds of commodity swaps and options. Theoretical losses are infinite, of course. Ultra short ones means they are not only short, but leveraged 2x. So, if gold goes down 10 points, ultra short gold goes up 20. I don't short often, frankly. I sell when I think it's gonna crash and buy once it's done. As for how they stay alive when prices are going up, well that's tough. If their rules say they have to be short X% at all times, then they can't really save themselves by going to cash, which would be the obvious thing to do in that situation. GLL is a 2x short gold fund, and (I just looked) it's only 47% invested. So I guess the answer is, hold cash.


As for RIMM--It's a corpse.
http://www.bgr.com/2011/06/30/open-letter-to-blackberry-bosses-senior-rim-exec-tells-all-as-company-crumbles-around-him/
"Like working in Soviet Russia." :p


And Netflix failed me today. I'll still make a bit from them, but I was hoping for a pop. The after hours people didn't like their quarter announcement. Tomorrow we'll get 3M and Norfolk Southern. The market likes MMM I think, and after the results from CSX and Union Pacific, I think NSR will be good too.




Edit: Here's the earnings calendar.

http://biz.yahoo.com/research/earncal/20110726.html

[Admiral Yi]

Poking around a little on etrade I got this about GLL:

"Leveraged and Inverse ETFs may not be suitable for investors who plan to hold positions for longer than one trading session."

What trading session are they referring to?  Options I know all have one day in the month when they come due.  Is the same true of other derivatives contracts?

[MadImmortalMan]

Poking around a little on etrade I got this about GLL:

"Leveraged and Inverse ETFs may not be suitable for investors who plan to hold positions for longer than one trading session."

What trading session are they referring to?  Options I know all have one day in the month when they come due.  Is the same true of other derivatives contracts?

Trading session=same day.

They mean "our shit is for day traders". 

And yes, options all have an expiration date. You can get them with very long times on them. Like six months sometimes. Or short weekly ones. Usually, people just trade the normal month.