newborn

[spikefader]

Buy the dip. Nay be skeered of it.

[New-born baby]

So please give us a target.

[riverbabe]

New-born, want you to know I have been selling covered calls, buying them back, selling them with a higher strike price, buying them back, selling the underlying at a big profit. Whew! Those option prices are really volatile. Have so far managed to come out substantially ahead, although it turns out I would have done better without selling the calls in the first place. Learning!!! Learning!!! Learning!!! Mostly I've been playing with ATI calls (sold underlying yesterday for final profit of about 8.5%) and, now, RIMM. One Oct. 95 (9.30) and one Oct. 100 (4.30).

I sold the ATI calls originally because the stock looked like it was rolling over and heading south. Then it turned around completely. Have to refine my criteria for selling calls period. Even sold 1 way out of the money Sept. call on ICE to collect $5, just to see if it would work. Forgot that the commission ate up the $5+!

[New-born baby]

New-born, want you to know I have been selling covered calls, buying them back, selling them with a higher strike price, buying them back, selling the underlying at a big profit. Whew! Those option prices are really volatile. Have so far managed to come out substantially ahead, although it turns out I would have done better without selling the calls in the first place. Learning!!! Learning!!! Learning!!! Mostly I've been playing with ATI calls (sold underlying yesterday for final profit of about 8.5%) and, now, RIMM. One Oct. 95 (9.30) and one Oct. 100 (4.30).

I sold the ATI calls originally because the stock looked like it was rolling over and heading south. Then it turned around completely. Have to refine my criteria for selling calls period. Even sold 1 way out of the money Sept. call on ICE to collect $5, just to see if it would work. Forgot that the commission ate up the $5+!

Yeah. Been there. Done that. But also I have sold calls and protected myself big-time, too. So don't get discouraged.

ICE: bought ICE at $129.94 last week, only to see ice fall down to $125.xx. But I sold a $130 SEPT call on it for $6, and bought it back for $5 when ICE bounced, and sold the $135 SEPT call for $1.79. When ICE bounced, I sold ICE for $130.44, rebought it at $129.18, and sold a SEPT $135 call for $1.80. ICE ended Friday at $135.04--so I had the shares called away by $0.04, but I still made $761 on the 100 shares, plus $100 on the previous call. And I did it with a greater measure of safety than buying ICE at $129.94 and holding it while it dropped to $125.xx.

I don't mind giving up a little on the long side on occasion, because you'll make it back on the short side on other occasions.

RIMM: sold 3 $93.375 SEPT calls on RIMM for $1.40 per share on 300 shares. Friday RIMM reached $93.30 with 15 minutes to go, but finished around $93.18, so I kept all three call money AND the 300 RIMM, too. So you also make out better on occasion, also. And if RIMM has risen past $93.375 with a few minutes to go, I could have repurchased the calls for $0.20 each and sold a higher strike in OCT if I wished. Options gives you added open doors.

REMINDER: RIMM reports on Oct 4. Buy calls and/or puts before the close on OCT 3.

[riverbabe]

Yeah. Been there. Done that. But also I have sold calls and protected myself big-time, too. So don't get discouraged.

ICE: bought ICE at $129.94 last week, only to see ice fall down to $125.xx. But I sold a $130 SEPT call on it for $6, and bought it back for $5 when ICE bounced, and sold the $135 SEPT call for $1.79. When ICE bounced, I sold ICE for $130.44, rebought it at $129.18, and sold a SEPT $135 call for $1.80. ICE ended Friday at $135.04--so I had the shares called away by $0.04, but I still made $761 on the 100 shares, plus $100 on the previous call. And I did it with a greater measure of safety than buying ICE at $129.94 and holding it while it dropped to $125.xx.

I don't mind giving up a little on the long side on occasion, because you'll make it back on the short side on other occasions.

RIMM: sold 3 $93.375 SEPT calls on RIMM for $1.40 per share on 300 shares. Friday RIMM reached $93.30 with 15 minutes to go, but finished around $93.18, so I kept all three call money AND the 300 RIMM, too. So you also make out better on occasion, also. And if RIMM has risen past $93.375 with a few minutes to go, I could have repurchased the calls for $0.20 each and sold a higher strike in OCT if I wished. Options gives you added open doors.

REMINDER: RIMM reports on Oct 4. Buy calls and/or puts before the close on OCT 3.

Thanks for the lessons and hand-holding. Have to learn by experience because paper-trading just doesn't do it for me. And thanks for the RIMM reminder. That should be interesting. River

[New-born baby]

Thanks for the lessons and hand-holding. Have to learn by experience because paper-trading just doesn't do it for me. And thanks for the RIMM reminder. That should be interesting. River

RIMM: I bot the $110 call for $0.97. If RIMM explodes higher, could be nice. IF not, I lost $97.

I suggest you consider a straddle; ie, buy a put, buy a call. If you don't want to spend too much money, also sell the higher call, sell the lower put. That way you stand to gain $500 per call or put.

[riverbabe]

RIMM: I bot the $110 call for $0.97. If RIMM explodes higher, could be nice. IF not, I lost $97.

I suggest you consider a straddle; ie, buy a put, buy a call. If you don't want to spend too much money, also sell the higher call, sell the lower put. That way you stand to gain $500 per call or put.

Just so I understand, could you please give me an example of a straddle, i.e., buying such a put and buying such a call in RIMM as it stands now. Also, please explain the potential gain of $500 per call or put, because I am not following you here. If I buy a put, I can just trade that, right? I don't actually have to buy and sell the underlying at the strike price, right?

Just a newbie at this (options), but not a newbie at the rest of it (trading stocks, etc.). River P.S. thank you thank you thank you.

[New-born baby]

Just so I understand, could you please give me an example of a straddle, i.e., buying such a put and buying such a call in RIMM as it stands now. Also, please explain the potential gain of $500 per call or put, because I am not following you here. If I buy a put, I can just trade that, right? I don't actually have to buy and sell the underlying at the strike price, right?

Just a newbie at this (options), but not a newbie at the rest of it (trading stocks, etc.). River P.S. thank you thank you thank you.

Here ya go:
RIMM current price: $93.23

An example of a Straddle would be:
BUY OCT $95 call for $5.40 and BUY OCT $90 put for $4.30. By doing so you straddled the current price, and if RIMM goes South, you profit on the put, and if RIMM goes North, you profit on the call. Since options are valued on strike price and time, the time value will remain on the day RIMM moves, and thus the losing position can be covered with still some value in it. EG, you won't lose all of your investment in the losing position.

Too expensive for you? Here's a cheaper play. BUY the OCT $95 call for $5.40, and SELL the OCT $100 call for $3.60. That means the OCT $95 costs you a net of $1.80. Such a transaction limits your potential profit to approximately $500, but it lowers your initial investment to $180 per play. And your risk is limited to $180 no matter how high or low RIMM goes. IF RIMM hit $200, your $95 call is worth $200 minus $95, or $105. The $100 call you sold is worth $100, so your profit is $5. Remember that you paid $1.80 for the play. Depending on how quickly you cover the call, the time erosion will affect the final value. IF you wait until expiration the net profit would be $500-$180=$320. But if you cover your position on the day of an explosive move up, you'll gain approximately $500. But that will depend upon how far RIMM would move past the strike you sold.

[billyjoe]

Newborn,
Booked a 25% gain today and sold all my CNE. Still get the next div. on the 16th. With a neg 6% growth rate they can't continue paying 1.3% per month and I don't want to be holding when they announce a cut. It took 10 1/2 months. Gained 12.7% on the share price and the rest by way of 55 free shares with 7 more on the way. Thanks for bringing the high div. Canadians to our attention . Have got to find another now with high div. and high earnings.

-------------billyjoe

[New-born baby]

Newborn,
Booked a 25% gain today and sold all my CNE. Still get the next div. on the 16th. With a neg 6% growth rate they can't continue paying 1.3% per month and I don't want to be holding when they announce a cut. It took 10 1/2 months. Gained 12.7% on the share price and the rest by way of 55 free shares with 7 more on the way. Thanks for bringing the high div. Canadians to our attention . Have got to find another now with high div. and high earnings.

-------------billyjoe

Congrats to you, Billy. Forget all the Cans for now. The party is over.

[spikefader]

So please give us a target.

Well around the time I was posting bullish opinion in early August I posted $SPX target of 1580, but today I'm tempted to raise it to $1640 per the below chart, or even $1750 on a long-term potential for upper yearly band resistance.

[riverbabe]

Well around the time I was posting bullish opinion in early August I posted $SPX target of 1580, but today I'm tempted to raise it to $1640 per the below chart, or even $1750 on a long-term potential for upper yearly band resistance.

Spike, hold my hand please! What do I buy???? River

[New-born baby]

Well around the time I was posting bullish opinion in early August I posted $SPX target of 1580, but today I'm tempted to raise it to $1640 per the below chart, or even $1750 on a long-term potential for upper yearly band resistance.

Big thanks, Spike. By the way . . . I don't read every thread since I am really busy these days. But if you post a chart, a comment on market direction, or even a hot tip, please post it here so I won't miss it!

[spikefader]

Spike, hold my hand please! What do I buy???? River

Long VIX futures is what I'm thinkin' at th' moment.

[New-born baby]

Long VIX futures is what I'm thinkin' at th' moment.

Oh boy! SPike's got the bear suit on again. Man alive! Better buy some puts right away!