using XIV to look for VIX pops...from www.schaeffersresearch.com "overextended" as occasions where XIV (a) closes 10% or more above its 20-day simple moving average; and (b) has a 14-day Relative Strength Index (RSI) of 70 or greater
from Philip Davis at seeking alpha... buying 500 shares of ABX TODAY, for $17.79 ($8,895) and selling five 2019 $15 calls for $5.70 ($2,850) and $15 puts for $2.40 ($1,200). Your net entry is $9.69 ($4,875) and, on January 18th, 2019, (720 days), you will either be called away at $15 with a $5.31 profit (54.7%) if the stock is above $15 or, if ABX is below $15, you will be assigned another 500 shares at $15 ($7,500) leaving you with 1,000 shares at $12.375, which is 30% below the current price. Owning the stock for a 30% discount is your worst case! we want to find stocks that are likely to stay in a channel. Stocks that have decent volatility day to day (to boost the price of the options we sell) but are not too likely to stray from a trading range of maybe 20% up or down. Wal-Mart (NYSE:WMT) comes to mind, McDonald's (NYSE:MCD), Verizon (NYSE:VZ), AT&T (NYSE:T), F... Blue chips are good when you are beginning, as they are less likely to go to zero I still like Ford, because F is only $12.49 a share so anyone can play with it. Option contracts trade in 100-share blocks so SELLING 10 of the 2019 $12 put for $1.92 ($1,920) obligates you to buy 1,000 shares of F for $12 ($12,000) and puts $1,920 in your pocket right away. That nets you into the stock for $10.08, which is giving yourself a quick 19.3% discount (see "How to Buy a Stock for a 15-20% Discount"). You can then conservatively buy 1,000 shares the stock for $12.49 ($12,490) as well and that would put you in at a net of $10.57 a share and, if F goes below $12 and the 1,000 shares are assigned to you from the short puts, then you end up with 2,000 shares at an average of $11.285 ($22,570) - that's your maximum risk on the trade (and F is not likely to go to zero, of course). Now you can sell 10 2019 $12 calls for $1.80, putting another $1,800 in your pocket, so the total cash outlay drops to $8,780 If you are called away in January 2019 at $12, you get paid $12,000 in cash, keep the $1,920 from selling the calls and the $1,800 from selling the puts. That would be a profit of $3,230, which is 36.7% of our cash outlay. Ford also pays a 0.20 quarterly dividend but we just missed January (18th) but seven more $200 payments is a bonus $1,400, which pumps our return up to 52.7%, that's 2.7% per month! And, don't forget, in the worst case, you end up with 2,000 shares at $22,570, which is $11.285/share and then the 0.80 annual dividend is 7% alone and, of course, we'd sell 20 more calls (not puts unless you want 4,000 shares) for $1.80 ($3,600) and suddenly, you have 2,000 shares at net $9.485 collecting your 0.20 quarterly dividends - that's 2% per quarter on dividends alone Now, there's a fancier way to play F and that's what we call an ARTIFICIAL buy/write where, instead of owning the stock (which pays a nice 4.85%, 0.80 dividend, we instead buy 10 2019 $10 ($2.98)/12 ($1.80) bull call spread for $1.18, selling the same $12 puts for $1.92. That gives you a net credit on the spread of 0.74 ($740) and we're only obligated to buy 1,000 shares for net $12 ($12,000) and you will get back $2,000 in the spread if F simply holds $12 into January 2019. The stock does not have to go up for you to make money! On the downside, the worst that can happen is you end up owning 1,000 shares of F for net $11.26 - a 10% discount to the current price. Given we have such a nice position, we can still sell calls to make even more money. Since our cash outlay is a 0.74 credit and margin required is $1.44 per contract, our goal should be just to collect 10% per month of the 0.70 cash+margin we've committed to the trade - otherwise, we are engaging in the great sins of greed and over-leveraging Looking to make 0.07 per month is easy. We can, for example, sell five March $13 calls for 0.15 ($75) and see how that goes before selling more. That's a very easy way to quickly generate 10% monthly returns while your upside risk doesn't kick in until F is over $13.15, well over the top of your spread (otherwise, you just roll your short calls along on months you don't collect the cash). As a rule of thumb, if a stock isn't paying 3.5% or better dividend, there's no point in tying up the cash required to own it - so we'll prefer the artificial buy/write to the traditional but both are valid and both are very powerful long-term wealth creation tools that form the basis of our Long-Term Portfolio. Here's a great list of Top Dividend Stocks by Sector and Coke (NYSE:KO) is on sale and pays a $1.40 (3.35%) dividend which, of course, we can enhance using our system. Buy six KO 2019 $35 calls for $7.50 ($4,500) Sell six KO 2019 $42 calls for $2.90 ($1,740) Sell four KO 2019 $38 puts for $2.85 ($1,140) Sell three KO April $42 calls for $0.67 ($201) Our net entry here is just $1,419 on the $4,200 spread so the upside potential here is $2,781 (196%) plus whatever other short calls we sell along the way. The net ordinary margin on the short puts is $1,948 and, of course, we're obligated to own 400 shares of KO at $38 ($15,200) plus the $1,419 we lay out works out to an average of $41.55 if assigned so no discount but a much smaller assignment risk this way.
Keeping our hearts healthy helps us live longer, more active lives. So make sure your heart stays in good shape by reducing inflammation... Inflammation weakens or irritates the walls of your arteries. When your immune system kicks in to fight it, plaque (made from white blood cells and cholesterol) forms to "heal" the damaged area. That's why it's so important to get inflammation in check before it attacks your arteries. My advice this week: Be sure to eat plenty of inflammation-fighting foods. These include tomatoes, carrots, bananas, coffee, dark chocolate, and my favorite... blueberries.
You're pretty off. What are you on about? I would not mind your thread, but this bit bothers me..."My advice this week: Be sure to eat plenty of inflammation-fighting foods. These include tomatoes, carrots, bananas, coffee, dark chocolate, and my favorite... blueberries." Those products in bolded text contain caffeine. And some people have problems with hypertension, and cannot have any caffeine in their diet. Do you understand this? Stick to your trading calls, and stop trying to give second-hand advice to people about diet. You can get people killed, physically. Seriously, man.
"After a time, you may find that having is not so pleasing a thing, after all, as wanting. It is not logical, but it is often true.” ~ Spock, Star Trek
quad witch and quarterly rebalancing hit one of my option positions, I will be careful next time around, in June
from the MHFT Read them and weep: 1) The US is going into recession. The recent spate of "hard" economic data says this is exactly the case, with Q1 GDP forecasts pared back to only 0.5%, Consumer Price Index -0.3%, Core CPI -0.1%, and Retail Sales -0.2%. 2) No major legislation will be enacted into law this year, not for health care, and not for tax reform, deregulation, or infrastructure. 3) The president is a phony. Lots of talk, but no action is something the markets were only willing to tolerate for two months after the inauguration. After that, they went into "Show me" mode. 4) The US is about to enter prolonged ground wars in North Korea, Syria, and Afghanistan. It turns out that bombing foreigners is easier for the president than getting legislation through a Republican controlled congress. It always is. 5) The stock market is about to crash. So far, we have been suffering a death by a thousands cuts. The downside momentum will accelerate once we smash through the 200-day moving average at $221. That "Sell in May" thing is just around the corner. 6) The Trump trade is toast. Financial, commodity, energy, coal, and industrial stocks will lead the charge to the downside. Iron ore prices down by a third in two months says the whole story. 7) The price of oil is about to collapse, once the markets call the bluff on a second OPEC quota extension. Even if they agree, quota cheating is about to explode, dumping millions of barrels of oil on the market before it becomes worthless. Did you know that alternatives accounted for 50% of California's total power supply on some days of this week, and that the wholesale price for solar energy fell to zero? Yet, my local utility still has to pay me four cents a kilowatt/hour for my excess solar power. Ha Ha. Ha Ha Ha Ha Ha Ha! 8) Gold (NYSEARCA:GLD) will rocket. It has already blasted through its 200-day moving average to the upside, and $1,300 per troy ounce beckons. Gold could imminently hit a four-year high at $1,380, and then eventually the old high of $1,922. 9) The US dollar is headed lower. Take the rising interest rate support away from the greenback, and it should fall like a ton of bricks. The yen is headed to ¥100 a dollar, and the Euro will rebound to $1.10 after the French election. Foreign stock markets will shudder. 10) The unemployment rate, now near all time lows, is about to take off. The great irony here is that while the president vociferously campaigned on an aggressive jobs program, he may well preside over the biggest job losses in history, thanks to hyper accelerating automation and artificial intelligence. For more on this, please read my recent piece, "Why You Will Lose Your Job in the Next Five Years and What to Do About It" . There is another alternative explanation to all of this. The bear market in bonds is not dead, it is just resting. So is the Trump trade, possibly for another six months. A certain Monty Python sketch about a parrot comes to mind. That all we are seeing is a giant short squeeze in the hedge funds' 2017 core short position in bonds for the umpteenth time, and that we are almost done. Hedge funds have grown in size to where they are now the perfect contrary market indicator. It is the classic "Too many people in one side of the canoe" trade. All that is left is another six basis points on the downside in yield terms, or three quarters of a point in downside in price terms for the TLT. That takes us down to a 2.10% yield in the ten-year Treasury bond which was exactly the upside breakout point for bonds in the fall. That's where you load the boat on the short side for bonds, for what will become one of the best trades of the year. There are other structural factors at play here which are hard to beat. For more on this, please read my opus on "Why Are Bond Yields So Low".