Offline for a month? o.O Vacation ?

Yeah Bank of America had a nice 40 cent jump in the last 2 hours. I'm a little concerned that they can hold onto it in the short run but long run the prospects for banks are starting to look more solid. The stress tests results Thursday will no doubt have many investors jumpy. But Warren Buffett and Ail must be happy with how it's going so far.

Also the better Apple does, the less faith investors seem to have in traditional handhelds, so I get the bad feeling that if Apple has another record breaking quarter this April, Sony and Nintendo will suffer. At least until E3. Good things are going to happen at E3 2012. I hope....


Also for our ladder game.. I think we may need to remove Apple in the future. They're way too volatile for other stocks to compete with. And their option chain is just ridiculous.
550.00 18.68 +11.98
555.00 14.30 +10.00
560.00 10.45 +7.94
565.00 7.10 +5.65
570.00 4.55 +3.71

And that's just for today

That's almost a 300% gain for some of those. 

If you started the game yesterday and bought those 5 option chains, you'd have made 20,000 in one day.

I guess you can look at it as being a huge risk/reward scenario and obviously it's something you'd never do in real life.  But it kinda turns ladder into a betting game.

Very well made HappyD! I really like the charts. I miss those on here...

The market is worrying me a little by going up too fast.
My goal was for Apple to reach 600$ by the end of 2012 and it's going to get there way earlier and if I don't want to pay heavy taxes I have to hold my Apple stock until the start of October...( I'm now up 42.5% since my purchases..)

Yeah I don't deal in Options, too much risk there for me. And I don't want to leverage my portfollio...That and I am not familiar enough with the whole mechanism....

Well up 1.69% for the day, not as good as the S&P 1.81% ( with 25% of my holdings in bonds and cash it's hard to beat the S&P on days the market goes up like crazy) but still my best day of 2012 so far .

Options are great fun, especially in a volatile market. If you're expecting a change in price due to some announcement but don't know the direction, you can use options to do a straddle, where you have a put and a call at the same strike price.
This ensures profit regardless of the direction, provided the volatility is there. Less profit than outright choosing a direction though of course.


For example with Bank of America, I expected their price to move moderately up from the low on the 12th (Share price was at $7.95 or so) So I put a call at 8.00 for Friday 17th. The option price was 10 cents at the time. By today the share price was around $8.14 so the options increased in price to around 21 cents. Unfortunately there was a dip that triggered my stop loss I had put on them of 18 cents, so I missed that big jump 35 cent jump at the end.

However you could have feared that the stress test would reveal major problems with them and the stock price would drop. Or not known what would happen, just that something would. In that case you could have used a straddle.

The options chain for today
Call 8.00 0.51 +0.38
Put 8.00 0.03 -0.12

If you had put a call and a put at strike price of $8 for 10 contracts each.
You would have paid 0.13*10*100 + 0.75*10+12 = $150 for the call
and 0.15*10*100 + 0.75*10+12 = $170 for the put
= $320 in total
Your call would now be worth $510
and your put $30
so you would have made $540- $320 = $220

Similarly if the new have been negative and the share price had dipped to say $7.60
Your call would be worth 0.03*10*100 = $30
And your put would be worth 0.45*10*100 = $450
so you would have made $450- $320= $130

Obviously you could have just put a call for $150 and made $510-150 = $360 today but that's far greater risk if you don't have indication of direction.



I've learnt the general trading terminology is rather complex but the actual things themselves are fairly simple.
Options I find are slightly risky and require a fair bit of baby sitting but the multitude of different things you can do with them are quite enjoyable.
The major downside I find is it's a great deal more time consuming working out what exactly you should do than position trading. Unless you have a job with a decent amount of free time (lol don't we all wish), it's not really feasible.

Of course Buffett is a strong proponent of position trading and probably the most consistent earner in history so naturally that makes options seem dangerous. But if you're young and want something exciting and can stand the increased risk/reward, I say go for it.

Whew that post was too long, I'm just gonna shut up for now until happydolphin comes back:P

Grrrr Apple is up again by over 2%...
Too much too fast...

If it breaks pass 600 in March I'm going to have to reduce my position a little and pay heavier taxes on those gains...

Thanks for the overall explainations ;)

I'm 40 so no longer young but not old either..

I'm still going to stick to position trading as I can only stomach so much risks and position trading should still allow me to reach my retirement goal ;)

On a side note, I think I was lucky and picked the right Bank when I went into financials. Citi failed the stress test and is taking a dip and noone actually expected Bank of America to actually pass it with flying colors so the stock is up again.. 

My idea to go to Bank of America is proving to be a very good one...
Only under performing stock I really have is EA and Nvidia and thankfully I sold half my Nvidia when the stock was at its peak and I'm still up there due to nice gains at the end of 2011...
Still I am loathe to sell my remaining Nvidia as the stock is kinda cheap right now..

I think EA is going to be treading water for a while, until at least their next earnings update.  SWOTR and its enoremous cost still, to me, is a black eye.

BAC was a nice pickup, stock was under 5 dollars at one point last year, crazy.  The stress test itself was a joke, youll be hard press to find a economy where all the aformention actions were to occur at once.  They still have issues with their mortgage loan portfolio, but the odd thing is, at least here in DC, the housing boom is back.  Alot of banks can start to list prime property and salavage a decent price on them.

Apple, what can i say, ill still avoid it and it may go to 1000 before crashing, but this is an unhealthy stock, not from a company standpoint, but from an investors standpoint.

Ive added to m Sony position after the mini setback last week.  The japanese government reiterated that the will continue to print money, which equals a weaker yen, which equals a normalization business for Sony.