General Options Blog

Heads I win, Tails you lose…

2 Comments

Ever wonder how Houdini escapes from sure death? How Hulk Hogan wins the WWF championship? How Janet Jackson's nipple falls out of her bra during the superbowl?

The outcome is fixed. There aren't many certain things in life, and many people would say the only two things you can count on are death and taxes. I beg to differ. Death...Taxes... and a manipulated stock market.

Take tomorrow's over-hyped employment numbers. Do you think the numbers will actually have an impact one way or the other? If you say yes, then how?

So the numbers come in above expectations. What happens? The market will rally on the continued improvement in the U.S. economy.

The numbers come in below expectations. What happens? The market will rally(after a quick drop) because folks will buy on the hope of renewed interest in QE3.

Heads I win(bulls), Tails you lose(bears).

It's only when the last penny is in the hands of the Bears, that we will get any serious downside to this market. Will it be the summer? Maybe the fall during the elections? Who knows, but you have to trade what you see, and right now it's a market hell bent on making new highs.

 

Coming out of the closet

Leave a comment

"Coming out of the closet!" - well that would be the BEARS today. Not the Chicago Bears, or the Bad News Bears, but the market BEARS. The ones who have been trying to time the next market correction since December and SPY $115. Now imagine what your portfolio looks like when you have been short as the market has ramped up 15%. It sure must look UGLY. But today is your day to cheer and gloat... to say "I told you so!".

Go out and get a drink. Party likes it's 2008. You deserve it. A hard earned victory. Your battle against the limitless coffers of the world's government's was yours today. The QE1 and QE2 are ships sailing on the atlantic now.  Operation Twist? Isn't that a game you play with a few friend when you are drunk?

You knew it was only a matter of time before the weight of Greece and the eurozone debt problems took hold. China reducing it's GDP outlook to 7.5%? That was the icing on the cake. The Black Swan event is only around the corner. You've been betting on the short side since you saw this guy say the market will crash.

It's about time your insight, foresight, and intuition proved you right. It's evil work being a bear. Now you just need a 20% move to the downside to get back to even...

Only problem is, this government will not let that happen. Not when the president is waging his battle for re-election. Not when the battle of the economy is fully in his control. Should this market be up 30% from it's October lows? No way... but trading on the macro environment alone will only turn your portfolio red. Go ask any BEAR.

It will be time to head back into hibernation soon. Today was only tease. Another reason for the bears to throw money into a false hope of a correction.

I guess we shall see what the next few weeks bring, but I am guessing we start working towards $140 on the SPY.

 

 

 

 

 

 

Win! WIN! WYNN!!!!!!!!!

3 Comments

We wrote about WYNN last night, and a possible move to $130 short term. What we wrote:

We like WYNN here and think $130 is in the cards in short order. We are putting our chips on the March and April Calls. Check out our watch list and chatroom for the strikes.

We were right with CME, ICE, FOSL, FSLR, PCLN, CSTR... the list goes on and on. And WYNN was no exception. The stock broke out in the morning and ran to $131.50, resulting in massive returns for anyone grabbing $130 calls. Not only that, we got the Hollywood drama we spoke about last night, as the stock was halted as WYNN was busy retracting an 8-k that hit the wires.

Volatility like this is an option traders wet dream. We were able to reload on some WYNN $130 calls when the stock reopened at $125. The stock rocketed to $132 and we were once again able to cash in on some massive returns. All these calls were alerted in our chatroom and watchlist.

Lets see what next week brings, but what a great way to end the week!!

 

For the WYNN.

1 Comment

Sometimes trading options can be compared to gambling at a casino. Black and red on the roulette table, might as well be Calls and Puts. So what better way to make money trading, then placing bets on the actually casinos? Two of the stocks trading that we like to play are Las Vegas Sands(LVS) and Wynn Resorts(WYNN). Wynn Resorts seems like the stock with best chance to make option players money. Why? Well because it's been beaten down, has had Hollywood drama, and is now starting to get people on the bandwagon.

It seems like last weekends ouster of Kazuo Okada from Wynn's board of directors was the first catalyst for the stocks impending move higher. It failed to hold the $120 level, and dipped to $116, before firing back and closing at $122.06, the highest close since mid-november. If you have followed WYNN, you know how volatile the stock can be. And option traders drool over volatile stocks, especially one you grab a position in before the volatility.

We like WYNN here and think $130 is in the cards in short order. We are putting our chips on the March and April Calls. Check out our watch list and chatroom for the strikes.

 

 

There’s Silver In Them Hills

2 Comments

Ben Bernacke returned to Capitol Hill today with one purpose and one purpose only.... to bank me some coin.  Ben Bernacke, I had you wrong.  You are a giving, caring, gentle man, what you lack in hair, you more than make up for in commodity bubble bursting.  All seriousness aside, I stated in the chat room that the powers that be need lower commodity prices.  What they did previously via margin hikes they are doing this time via QE bluff.  To think they aren't going to do QE again, its almost preposterous.  QE4,5,6,7,8,9 is coming.  If QE stops then  our government will eventually run out of money.  There is no doubt about it.  For now we have to trade what we see.

In chat today I spoke of commodities still roaring and Ben Bernanke coming to Capitol Hill.  It was then I bought the $36 SLV puts for $.35.  SLV was at $36.34 at the time.  I posted my buy in chat.  Little did I know after I bought those PUTS SLV would never look the same.  Almost 700% later I look as smart as Ben Bernacke himself, or perhaps I caught up to his net worth by .0001%.   It's tough to compete with a man who can print unlimited dollars out of thin air.

My trade was large for what I usually trade for options.  I bought 30 at $.35, just off the low of $.31.  She ended up hitting $2.82.

 

 

 

The moral of the story here is this:  stock options offer tremendous gain potential.  Take a day like today.  Stock weren't even down 1% and there was huge money to be made.  I had some HPQ calls that I lost on.  AMZN calls that didn't go my way today.  I had GOOG calls I sold out at the perfect time.  And then I had Ben.  Ben Bernacke a man who is doing all he can to revitalize our economy.   In one day I went from hating the man to loving him.  Funny how its ok for him to print all the money in the world, as long as my trade goes my way.  It's easy to place the blame on a man who is going bald for a reason.   Being Chairman of the FED certianly is not as easy as it looks.  The outside pressures must be tremendous and now hes backing off his additional QE.  Thank you Ben.  If you could kill SILVER again tomorrow I'd be most grateful.  I'll even use my profits to buy you a nice hair piece.