***Official*** 2016 Stock Market Thread

[FelixDeCat]

I have ~$150K worth of covered calls on Stamps.com within .75 of the strike price, really hoping I keep the underlying stock and it closes below $90/share.

Unless you have a portfolio of $1.5MM or at least that much in other assets, it is somewhat risky to have that much money in one stock. A covered call play is only really worth the premium you collect, the rest is a risk you take.

Ex: $90 stock, $1.00 premium collected, net risk = $89 per share. That's pretty steep.

You could also have long term puts to protect you from an overnight plunge of 20%-50% on terrible news in a single stock, and still sell calls. But what if your cost basis is $90, the stock goes to $80 and stays there. Now you have to sell calls in the $80 range and pray you don't get the shares taken away because then you make NO money.

Even worse, if it finds a new long term home in the $60s, your basis is $90, you sell calls in the $60s (because no one is paying anything for $90 calls now) and then it goes back to $75 one day and you have to buy back the calls you shorted in the $60s or realize your loss of $25-$30 a share. D:

It is better to sell calls on indexes like the QQQs since the chance of waking up to a 50% plunge is far less on 100 stocks vs just ONE stock.

 

[Imp]

A surprising 287,000 jobs were created in June, more than 100,000 above forecasts. The number was viewed as payback for a stunningly weak May report, which was revised even lower — from 38,000 to 11,000.

Might be a video:
http://www.cnbc.com/2016/07/08/jobs...ut-blowout-number-not-enough-to-move-fed.html

What the fuq? May revised even lower, June just explodes? Wonder if the 35k Verizon workers counted as "new" employees. Supposedly things are seasonally adjusted, but is there a huge summer employment jump in June?

But yep, market to super high land because Fed won't hike anymore.

Edit: Wait a minute...

Notably, approximately 90% of the job increases in June went to workers aged 55 or above.

http://www.investing.com/news/commo...lity-following-robust-u.s.-jobs-report-413297

Sorry, not the best source, but I can't find an MSM outlet pointing this out. What the hell? Ages 55 and over?

 

[Imp]

Oh, right, Canada has jobs too.

Statistics Canada reported Friday that the economy lost 700 jobs in June.

http://www.cbc.ca/news/business/jobs-june-employment-1.3670110

That definitely justifies 15-30% yoy home price increases.

 

[Artdeco]

Unless you have a portfolio of $1.5MM or at least that much in other assets, it is somewhat risky to have that much money in one stock. A covered call play is only really worth the premium you collect, the rest is a risk you take.

Ex: $90 stock, $1.00 premium collected, next risk = $89 per share. That's pretty steep.

You could also have long term puts to protect you from an overnight plunge of 20%-50% on terrible news in a single stock, and still sell calls. But what if your cost basis is $90, the stock goes to $80 and stays there. Now you have to sell calls in the $80 range and pray you don't get the shares taken away because then you make NO money.

Even worse, if it finds a new long term home in the $60s, your basis is $90, you sell calls in the $60s (because no one is paying anything for $90 calls now) and then it goes back to $75 one day and you have to buy back the calls you shorted in the $60s or realize your loss of $25-$30 a share. D:

It is better to sell calls on indexes like the QQQs since the chance of waking up to a 50% plunge is far less on 100 stocks vs just ONE stock.

I need to subscribe to your newsletter, thanks.

 

[Imported]

My mom bought shares of NVDA back in the early 2000s. It just hit over $50. I think it's time to sell but I'd hate to steer her wrong. Thoughts? I don't know the full value but she's less than 10 years from retirement and I feel like she should move the money elsewhere.

 

[holden j caufield]

My mom bought shares of NVDA back in the early 2000s. It just hit over $50. I think it's time to sell but I'd hate to steer her wrong. Thoughts? I don't know the full value but she's less than 10 years from retirement and I feel like she should move the money elsewhere.

Depend on how much money that is and how it affects her lifestyle. Anything can happen. NVDA, AMD, FB might be big name players in the Virtual Reality space and that's a good space to be in IMO. But yeah the market is fickle. I'm surprised at how strong it just bounces back from anything. But when people leave the exits watch out.

I don't know but everything from housing, the market, central bank policies makes me think it might come down at some point.

 

[Miramonti]

I have ~$150K worth of covered calls on Stamps.com within .75 of the strike price, really hoping I keep the underlying stock and it closes below $90/share.

When do they expire? (today would certainly be nice )

My mom bought shares of NVDA back in the early 2000s. It just hit over $50. I think it's time to sell but I'd hate to steer her wrong. Thoughts? I don't know the full value but she's less than 10 years from retirement and I feel like she should move the money elsewhere.

She made an investment and you're making a trade. You may be right in the short term (and even long term), but like holden said, it could have upside potential for good reasons. And like you said, there are other factors involved, like asset distribution, that should be considered before automatically liquidating at a favorable price.

She's made money on it, but sometimes having more cash in the pocket (ie accessible) is a greater risk to its existence than having that set aside in the market. Perhaps the best advice you can give her is to evaluate and/or talk to a reputable financial specialist (if she hasn't already) to position for the next decade before retirement, and beyond.

Just my perspective, not a encouragement either way. I was concerned about my moms at&t stock when everything was going cellular and thought she should sell it. However then they bought into the cellular space (iirc?) and the the stock went up from there.

 

[Artdeco]

When do they expire? (today would certainly be nice )

Yes, today . I only like to do weekly options, and I maybe forgot to mention I had another $150K in underlying STMP covered calls at a strike price of 91.

Picked up 100 shares of NUGT, sold the option on it too, strike price was $167.50, so I kept them too

Have been very lucky so far on the covered calls, and am ahead by quite a bit, can take a pretty massive hit in the underlying because of all the premiums I've collected so far. I do think I'll start putting the profits into QQQ, as mentioned, they'd be quite a bit safer, with less risk to the downside of the underlying.

 

[FelixDeCat]

Yes, today . I only like to do weekly options, and I maybe forgot to mention I had another $150K in underlying STMP covered calls at a strike price of 91.

Picked up 100 shares of NUGT, sold the option on it too, strike price was $167.50, so I kept them too

Have been very lucky so far on the covered calls, and am ahead by quite a bit, can take a pretty massive hit in the underlying because of all the premiums I've collected so far. I do think I'll start putting the profits into QQQ, as mentioned, they'd be quite a bit safer, with less risk to the downside of the underlying.

You are free to do as you wish in a free market, and Im not trying to discourage you from doing what looks like a profitable venture so far.

The reason why I posted the warning in http://forums.anandtech.com/showpost.php?p=38345127&postcount=1476 was because over the last 20 years I have faced almost every situation imaginable and lost money because I was not prepared or did not think through every possible scenario (good or bad).

Since I like to sleep at night, I've been in cash and have no positions. I do plan on simply accumulating 10%-15% REITS eventually.

 

[JEDI]

rip: Blackberry Classic
http://money.cnn.com/2016/07/05/tec...one-qwerty/index.html?iid=surge-story-summary

blackberry down -30% this year on top of being -15% last year.

still shocked blackberry is still in business

 

[Miramonti]

Yes, today . I only like to do weekly options, and I maybe forgot to mention I had another $150K in underlying STMP covered calls at a strike price of 91.

Picked up 100 shares of NUGT, sold the option on it too, strike price was $167.50, so I kept them too

Have been very lucky so far on the covered calls, and am ahead by quite a bit, can take a pretty massive hit in the underlying because of all the premiums I've collected so far. I do think I'll start putting the profits into QQQ, as mentioned, they'd be quite a bit safer, with less risk to the downside of the underlying.

Nice. I'll bet it was looking perfect there briefly, potentially closing at $90. Alternatively, selling index premium can be a mixed bag, because while it has a lower chance of having as large gap opening, it also means over all lower implied volatility and relatively less premiums collected. The VXX volatility index has been hit hard with this rally. I think there is a lot of value to having watched and traded something for a long time and gaining a good pulse for it.

 

[Artdeco]

Nice. I'll bet it was looking perfect there briefly, potentially closing at $90. Alternatively, selling index premium can be a mixed bag, because while it has a lower chance of having as large gap opening, it also means over all lower implied volatility and relatively less premiums collected. The VXX volatility index has been hit hard with this rally. I think there is a lot of value to having watched and traded something for a long time and gaining a good pulse for it.

Am considering taking a larger position in NUGT, the options premiums are astronomical, and it looks like gold is a safe bet for a while...

 

[jpiniero]

still shocked blackberry is still in business

Blackberry had no debt for the longest time and has plenty of cash. It's going to take awhile for the money to run out.

 

[Imp]

Let the bank bailouts begin... No, not really, yet, but hold onto your butts?

Europe urgently needs a 150 billion-euro ($166 billion) bailout fund to recapitalize its beleaguered banks, particularly those in Italy, Deutsche Bank AG’s chief economist said in an interview...

Might be a video:
http://www.bloomberg.com/news/artic...66-billion-deutsche-bank-economist-tells-welt

 

[turtile]

My mom bought shares of NVDA back in the early 2000s. It just hit over $50. I think it's time to sell but I'd hate to steer her wrong. Thoughts? I don't know the full value but she's less than 10 years from retirement and I feel like she should move the money elsewhere.

Sell half. Nvidia could go higher but nothings certain. They have a huge portion of the graphics market now and AMD can take share back and who knows what Intel is up to releasing to compete in the market.

If VR does become huge, there is still only so much money the market can move to that area. Right now, energy prices are low so there is more money to spend on tech. That may not be the case in the future.

 

[Miramonti]

Am considering taking a larger position in NUGT, the options premiums are astronomical, and it looks like gold is a safe bet for a while...

Holy cannoli, based on friday's last prices one can sell the July 22 atm (167.5 strike) call and put for $17 each and a total of $34...expiring in 12 days.

Personally, instead of going long the underlying of something that's rallied so much (which gives me an asthma attack thinking about...and I don't even have asthma ), I would rather sell the atm call and put (receiving the $34) and buy the 205 call ($6) and the 140 put ($6) for a net of $22 of premium.

If it closes between 145 and 190 on 7/22, it's a winner, and the worst case scenario is a loss of ~$15 if it finishes at 205 or above, or ~$5 if it sells off to 140 or below, and the best case scenario is of course making $22 if it finishes at 167.5.

(I think that might be called selling a butterfly spread, albeit not a perfectly even one because 205 is 37.5 ootm and 140 is 27.5 ootm.)

However, that's all based on the friday's closing prices and monday's atm's will be lower, not to mention the whole thing would be very tough to get good prices on each leg (and I have no idea how credible these closing prices are), so this is just rambling.

 

[holden j caufield]

I'm someone who takes a lot of chances and isn't adverse to risk. I've also traded NUGT and USLV the last few months. It's too volatile even for me. I've seen NUGT move $20+ down/up a number of times in an hour and this was when it was trading between $84-125. It's very prone to global macro stuff and I've gone to sleep only to wake up an see it move 15-20% with no way of getting in or out of it.

 

[Artdeco]

I'm someone who takes a lot of chances and isn't adverse to risk. I've also traded NUGT and USLV the last few months. It's too volatile even for me. I've seen NUGT move $20+ down/up a number of times in an hour and this was when it was trading between $84-125. It's very prone to global macro stuff and I've gone to sleep only to wake up an see it move 15-20% with no way of getting in or out of it.

Agreed, my rule of thumb has been to never stay in a leveraged fund for a full day, usually in and out, quickly.

 

[FelixDeCat]

I dunno, holding 3x ETFs is very risky right now. I know I keep repeating this but I just don't want anyone to go "WTF?" when it happens - any day from now until December the SEC will issue a new rule that will require 2x and 3x ETFs to delever to 1.5x.

I don't know what will happen the day after the rules are official.

• Will trading be halted in NUGT and USLV until deleverage occurs?

• Will the rules go into effect immediately or next year?

• Will those EFTs open down the next day 1/3rd or 2/3rds lower to reflect the order?

Mary Jo Whitehead declared war on 3x ETFs and she has promised action before Obama leaves office. I wish she would at least let brokerages get separate written approval from investors to trade 3X ETFs so at least they are completely informed of the risks than play nanny and take the trade away from everyone. :whiste:

 

[Imp]

^I doubt they'd suddenly cut it off in a day. On the other hand, the second it's announced, how does the ETF not tank?

 

[holden j caufield]

I dunno, holding 3x ETFs is very risky right now. I know I keep repeating this but I just don't want anyone to go "WTF?" when it happens - any day from now until December the SEC will issue a new rule that will require 2x and 3x ETFs to delever to 1.5x.

I don't know what will happen the day after the rules are official.

• Will trading be halted in NUGT and USLV until deleverage occurs?

• Will the rules go into effect immediately or next year?

• Will those EFTs open down the next day 1/3rd or 2/3rds lower to reflect the order?

Mary Jo Whitehead declared war on 3x ETFs and she has promised action before Obama leaves office. I wish she would at least let brokerages get separate written approval from investors to trade 3X ETFs so at least they are completely informed of the risks than play nanny and take the trade away from everyone. :whiste:

So no given date on this, just sometime this year? That is a bit concerning.

 

[Miramonti]

I dunno, holding 3x ETFs is very risky right now. I know I keep repeating this but I just don't want anyone to go "WTF?" when it happens - any day from now until December the SEC will issue a new rule that will require 2x and 3x ETFs to delever to 1.5x.

I don't know what will happen the day after the rules are official.

• Will trading be halted in NUGT and USLV until deleverage occurs?

• Will the rules go into effect immediately or next year?

• Will those EFTs open down the next day 1/3rd or 2/3rds lower to reflect the order?

Mary Jo Whitehead declared war on 3x ETFs and she has promised action before Obama leaves office. I wish she would at least let brokerages get separate written approval from investors to trade 3X ETFs so at least they are completely informed of the risks than play nanny and take the trade away from everyone. :whiste:

I actually had no idea before you had posted, so I appreciate the information. I'm not going to avoid them, but it helps to know that this decision is pending.

 

[Imp]

Sweet, S&P500 may have hit a new 52 week high. Maybe it'll break out and become a 10 year bull market.

On the other hand, I checked the charts in 2000 and 2007. They also set a new 52-week high before losing 40-50%.

Yay supposedly good job numbers...

 

[dullard]

Sweet, S&P500 hit an all-time inter-day high and an all-time closing high, although if you count inflation, they are a just a bit shy of the records.

Corrected it for you.

 

[Imp]

Corrected it for you.

How does that work in the European or Japanese markets where inflation has gone negative at points in the past few years...

Edit: So I googled an inflation calculator. Plugging in US$ 1500 in 2000 equals about $2100 in 2016. Wonder if it can be inflation-adjusted that simply.

http://www.bls.gov/data/inflation_calculator.htm