They won't or can't even shut down blatant pump and dump websites. How is it legal to build a list of 'suckers' , tell them to watch a web page for a ticker (always some random piece of shit bb stock) and frontrun their idiotic buying? If that isn't fraud, then there is no fraud anywhere. All this in plain view, like Lennys garbage.
This guy is insane: <i>"On Feb. 9, I instructed subscribers to double down. I bought 410 contracts, bringing my total to 820. This lowered my good-till-cancel sell price to $2.00 -- still too high for the market, but now within reach. And I continued buying. On Monday, April 13, with my average costs at $1.40 a share on 880 contracts, I alerted subscribers to sell at $1.50. I walked away with a $7,150 profit."</i> If his sell price was $2.00 on 820 contracts... I'm going to assume his average cost was probably $1.90. How in the world did he get that down to $1.40 a contract by buying 60 contracts over the next 2 months? Even if he got his following 60 contracts for free, his average would still be ~$1.77/contract. He's gotta be tweaking.
heech - he's actually not tweaking on his entries. he doubles down. however, he IS not being completely forthright about his EXITS. first, he had a loser. a big one - DOX - where he lost 200k+. he regularly posted about it, how he still had it in january...then, after it expired worthless, *poof* he had "sold" it 2 weeks before, after still "having" it in his updated daily list. some would call that lying, TSCM had to do a major backstep on it, and then gave it to him as a loss. the one you cite, INTC, he had 880 calls. his entries averaged 1.40; he originally had a sell @2.40, then 1.90, then (i think?) 1.70, then 1.50, to try and get a 'winner'. so, 1 or 2 days before options expiration, INTC options *hit* 1.50. only problem? only 92 (i forget the number) actually TRADED at that price. and as you might know, on exits, lenny doesn't use a stop, or a stop market - he uses a strict limit. so, according to lenny's math, 788 of them would have expired worthless. i've read that lenny doesn't actually trade the positions, that it's paper trading. i have no proof of that. EDIT: also, heech, he lowered his good-to SELL to 2.00. not his basis cost, which was probably 1.50 at that time.
Ah, that was the one number he didn't give, which I made an assumption on. But if all he's trying to do is close out $1k+ per deal (that was my understanding of his strategy)... why would he be trying to go for such a large margin above cost basis?
here's lenny's strategy: buy 10 deep in the money calls, wait for them to go up, sell them for $1 profit. thus, $1000 total. however...what if the stock goes down? he buys more. he still goes for that $1/contract profit. as he's doubling down, he's moving his sell price down as well. so let's say he starts out buying 10 of the SU jan '10 $35 contracts in september of '08. by now, he has 490 (!) contracts of them, most of them bought well out of the money, and is hoping to sell them at $1 more than he paid for them. as it gets closer to expiration, he'll do some combination of doubling down more and lowering his sell price. you'll notice that it requires a LOT more than the initial capital. at one point, his open positions were more than $500,000 in the red. i think it was closer to 700,000 in the red. he managed to extricate himself from that hole. his goal is only for "wins". he considers all trades with the same contract as a "win", so if he buys something @10, then more @3, and sells them all for 7 (assuming even number bought) he considers that all a profitable trade. yes, there's tons of holes with the strategy.
you gotta be kidding...no matter his past accomplishments, something happened to this guy on the way which turned him into a total loser. This guy is done, bankrupt, broken. Hope he will pick himself up, but does not look like he has fallen deep enough yet.
Gotcha... he's looking for $1 *per contract*, even as he averages down. All I gotta say is, wow. But I have to admit though, that sounded more terrifying before I read the ESPN mag article on the rest of his life. Sounds like par for the course, in that context.
"In Cramer We Trust". Cramer brought this tobacco juiced moron to the masses. I think it was a grand Jimbo charged for this crap. How does Cramer get a pass here, then say he'll catch up with John Stewart. Stewart is more credible than Cramer and Dykstra.