All posts by uranium-pinto-beans

Be A Loser and Win Big In the USA – Buy A House You Can’t Afford, Stop Paying Your Mortgage, Get $150,000

News today from Bank Of America epitomizes all that is wrong with the United States.  Bank Of America is forgiving the principal on mortgages by an average of $150,000. If this doesn't make you puke, then you must be one of those getting the handouts. There is zero wonder why we are turning into a fat, lazy country. Can't find a job? The government will pay you to sit at home for two years and pick your nose. Don't make enough money to buy food? The government will give you a card to buy your food, and has been issuing these "food stamps" in record numbers. The government offers little reason to get off your couch these days. Is it any wonder why the job market isn't improving?

If your neighbor is at his, haven't made a mortgage payment in two years, $450,000 home on his $4,000 couch, doing nothing but collecting his free checks and food from the government while scratching his ass and watching the NBA playoffs on the 50 inch LCD he bought with the second mortgage his bank forgave, why the heck am I going to bust my ass in this messed up country? If I didn't have kids or a family and after reading about all the free handouts everyone else is getting, I'd have a tough time staying the course. I have always worked hard, and with my family to take care of, I will always work hard. But now not only am I supporting my family I am supporting every bloodsucker out there. If I don't pay my taxes who else is going to fund the losers? I hate to put it that way, but there isn't a much softer way to put it.

The government seems hell bent on breast feeding the losers and milking the hard working winners dry. How many people planned for this day when Bank of America decided to hand out at least $150k to the most irresponsible people in this country? How many people purposely stopped paying their mortgage so they would qualify for this hand out?

I saved up my money. I made an honest downpayment. I bought a house I could afford, through thick and thin. I have never been late on a payment. I'm a winner, why do I feel like such a loser? How can someone who saves his money and does the right thing feel like a dumb schmuck? This is why we are f*&^ed as a country.

Sunday Evening Get Together At Option Millionaires

The title sounds so cozy, and your right... it is, I'll even be snuggled up in my Linus blanket.

Bring your popcorn, favorite beverage and stop in the chat room. We can talk about Don Draper and/or try to guess Joan's bra size.

 

 

 

While we are at it we can talk about the NY Knicks first win toward an improbable, never done before, come back from 3-0 deficit in the NBA playoffs against the hated HEAT.  Will Mariano Rivera ever return to baseball or will he have to retire?  Is it ok to put your 6 year old in a tanning booth?  Absolutely riveting discussion Sunday night, you must not miss this.  And we just may...possibly...if we have the time... get to option trading.

We'll discuss what everyone is expecting for next week.  Futures tumbled into and after the close on Friday... will this continue?  AAPL closed at its low of the week.  Is there more weakness ahead or will AAPL have a nice rebound this week.   I will be doing a class on Sunday it will start at 7:30PM and last 30-45 minutes.  It won't be a class on how to land a big advertising contract from Lucky Strike, only Don Draper can be that smooth.  I will, however, be covering call and put contracts.  It will be another beginner options class and should be brief so I  have time to get into some charts and strategy.

Those signed up for the higher tiers I will post the password and location of the class in the premium forum area.  You can also send me a private message in the chat room.

Hope to see everyone there.  Let's get ready for next week!

An Option Traders Delight

It was another wild week for option traders highlighted by GMCR's enormous 50% move lower on Thursday.  As an option trader you want stocks making big moves, not trading flat.

Aside from the spectacular GMCR puts option trades I wrote about Thursday and Wednesday, there were plenty of other strong moves today.

On Thursday NFLX sat firmly above $80 a share, its $77.50 weekly puts traded to a low of $.20.  NFLX proceeded to fall hitting a low today of $72 an almost $10 move.  Those $.20 puts hit $5.10 today.  $200 into $5,100 has you gotten in at the low and sold at the high.  I took a dabble on the other side on Thursday and went long the calls, which were up a little  I sold out later for a solid loss as NFLX continued to slide.

How about RIG?  I played RIG to the upside for earnings on Wednesday night.  Thursday morning my $50 calls I bought at $.97 are up to $2.30.  I ended up selling at $2.24 about 3 minutes into the trading day.  That was a great trade, but had I held my calls I would have been very disappointed, which is why it is important to lock in profits.  That reversal I wrote about lasted about half a trading day.   After the pop to $52 and change you could have bought the $49 puts for pennies a low of $.02 and they hit $1.36 today.  That's $100 into $6,800.

 

Crude Oil took it on the chin today, but the same could not be said for put holders.  The $38 strike closed at $.04 yesterday and today hit a high of $1.04.  Thats $80 into $2,080.

LNKD had a great move off earnings last night, but option traders are a pretty smart bunch.  Most of the calls strikes that you would expect to see big gains when a stock moves 8%, were already trading like LNKD was going to make a 10% move higher.  Consequently call buyers of out of the money strikes, who were betting on a big LNKD move ended up getting burned.

FSLR had the same type of day, as the option premiums were high, as traders expected a big move.  Option holders at the open of trade saw the value of their weekly out of the money calls and puts dwindle to almost nothing.  The $18 puts dropped to $.04.  Later in the day those same puts traded for $1.04.  All was not lost for FSLR option traders, the big trade was during the session and not front running the earnings announcement.

AAPL this was the second week in a row I unsuccessfully tried to time a bounce for AAPL.  AAPL closed at its lows and frankly, there was no bounce.  Just a frustratingly slow death for anyone holding calls today.  PUT holders, on the other hand, had every reason to rejoice.  The $570 strike went as low as $.50 today and closed at $4.75.

Volatility is creeping back into the market again, which means solid gains for option traders.

Green Mountain Coffee Roasters (GMCR) PUT Holders Need A Bean Counter To Tally All Their Profits

 

GMCR call holders wept today as GMCR posted a dramatic 50% plunge from yesterdays closing price.  It wasn't all tears of sadness for GMCR option holders as PUT holders were able to cash in on an enormous move in GMCR.

I highlighted last night some potential profits for today, turns out the potential profits were much greater.  GMCR plunged below $25 giving the $30 puts a high of $5.50.  They closed at $.04 yesterday.  $.04 into $5.00 in less than one full trading session..... wow.

GMCR $30 puts from $.04 to $5.50 or $80 into $11,000

GMCR $35 puts from $.13 to $10.50 or $130 into $10,500

GMCR $37 puts from $.19 to $12.45 or $190 into $12,450......That's a  lot of K-Cups.

Last week AMZN, the week before AAPL, this week GMCR.... NEXT????