New-born Baby's Cans: Making Money in a Down Market

[spikefader]

Greetings Spike,
I usually look for the dip to hit the 50dma,this one really spiked down quick.
In the past I would use limit orders,but a majority of the time they wouldnt get filled,as the dip occurs so fast.I now watch live quotes,and try and time my market order near the low.By the time my order filled it had risen .50.

As a point of reference,Ive collected approx.12 mos worth of dist payments including commision cost this month.So far its the only system that Ive been able to trade consistently for a profit.

Concerning FRO,looking at historical price data,it has always run up in price to the Ex date.My theory is that nobody would short going into the divy. as they would be responsible for the divy payment of approx. $6.00?

I closed out on friday for a nice profit,but now I realise it will likely keep on till the 3rd.Does my theory sound plausible?

cordially and best wishes to all ELN positions,That really was a blindside,hopefully this group can help all recover.
Tom

Yeah, that's the trouble with market orders with retail brokers. The fill delay can cost you. This is why I prefer limit orders.

Don't know if your theory is a good one or not. I thought the Company pays the divies and not the people on the short side of the trade.

[Thomrich]

Yeah, that's the trouble with market orders with retail brokers. The fill delay can cost you. This is why I prefer limit orders.

Don't know if your theory is a good one or not. I thought the Company pays the divies and not the people on the short side of the trade.

Greetings,
Im not sure either,but I was under the impression that a short holder must pay the dividend to the original shareholder,otherwise going short during a dividend would be a guaranteed win,since the price drops the dividend amount
post payout.Although I could be wrong.Ill look into it.'

cordially Tom

[New-born baby]

You gotta pay!

Greetings,
Im not sure either,but I was under the impression that a short holder must pay the dividend to the original shareholder,otherwise going short during a dividend would be a guaranteed win,since the price drops the dividend amount
post payout.Although I could be wrong.Ill look into it.'

cordially Tom

If someone shorts a stock, the shorter is responsible for the divy. A short is nothing else than borrowing the shares from your broker, selling them, and guaranteeing the broker that you'll repay them later. Those shares are borrowed from another stockholder with "Scottrade" (or whatever broker you do business with). For example, let's say Tom wants to short ENCC. Scottrade lets Tom sell Spike's shares, but holds Tom responsible for the divy since Spike expects the divy on the 15th of each month. Later, Tom buys the shares back and give them to Scottrade, and Spike doesn't even know that his shares of EENC have been sold by Tom, and since replaced! But that is how the system works.

[Thomrich]

If someone shorts a stock, the shorter is responsible for the divy. A short is nothing else than borrowing the shares from your broker, selling them, and guaranteeing the broker that you'll repay them later. Those shares are borrowed from another stockholder with "Scottrade" (or whatever broker you do business with). For example, let's say Tom wants to short ENCC. Scottrade lets Tom sell Spike's shares, but holds Tom responsible for the divy since Spike expects the divy on the 15th of each month. Later, Tom buys the shares back and give them to Scottrade, and Spike doesn't even know that his shares of EENC have been sold by Tom, and since replaced! But that is how the system works.

greetings
Taken from FRO's message board,as they get asked this all the time.

''
You're basically borrowing the stock from your broker. When the ex-div date rolls around, he's gonna want that dividend, so you profit from the drop, but on payout day for the longs a week later, you get cash taken out of your account, which goes to your broker.

A lot of shorts learned that the hard way. They thought it was a win-win situation. ''

Seems to make a pre ex-divy price stable.FROs historical prices always rise till ex date.Ill look to bite on FRO after the 3rd and take the rise to the next div.

cordially Tom

[New-born baby]

Maybe wait for channel long day

greetings
Taken from FRO's message board,as they get asked this all the time.

''
You're basically borrowing the stock from your broker. When the ex-div date rolls around, he's gonna want that dividend, so you profit from the drop, but on payout day for the longs a week later, you get cash taken out of your account, which goes to your broker.

A lot of shorts learned that the hard way. They thought it was a win-win situation. ''

Seems to make a pre ex-divy price stable.FROs historical prices always rise till ex date.Ill look to bite on FRO after the 3rd and take the rise to the next div.

cordially Tom

Tom,

I would just suggest that since FRO is 3 months away from next divy, to wait for a Spike call on a channel long day. At one time this stock had 31% shares shorted. That's when the CEO decided that some nice big dividends might teach the shorters a lesson or two about tanker stocks.

My prospective about FRO is that it may return to $40 here fairly soon, but probably not within 3 days. I am just trying to save you some money!

[Thomrich]

Tom,

I would just suggest that since FRO is 3 months away from next divy, to wait for a Spike call on a channel long day. At one time this stock had 31% shares shorted. That's when the CEO decided that some nice big dividends might teach the shorters a lesson or two about tanker stocks.

My prospective about FRO is that it may return to $40 here fairly soon, but probably not within 3 days. I am just trying to save you some money!

greetings,
FRO is also getting the extra dividend of 1 SFL share for every 10shares of FRO.As of today that would be 2.21 or approx 4%.Not sure when this dividend is happening,any thoughts New born?

cordially Tom

[New-born baby]

FRO Divy

greetings,
FRO is also getting the extra dividend of 1 SFL share for every 10shares of FRO.As of today that would be 2.21 or approx 4%.Not sure when this dividend is happening,any thoughts New born?

cordially Tom

Tom,

You'll have to own FRO BEFORE 3/3/05, and not sell before 3/9/05. You'll get both the SFL shares and the $3.50 cash divy. I know they will lower the share price by $6.00 per share on 3/3/05, and then I expect it to fall to around $40 between now and the next divy. Why? FRO has been under pressure by shorters in the past year. FRO makes money on one way trips hauling oil; the way back is loaded with only sea water for ballast! If the oil price drops, FRO will too. The shorting sharks are already circling FRO, waiting for a good opportunity to short her. No question but that FRO will rise to $60 for the next divy in June, but expect downward price movement between 3/3/05 and then. Just my worthless opinion.

I like the company! I just want Tomrich to get the lowest initial price for his shares.

[canaveraldan]

Fro

I waited too long to buy FRO this time. I was hoping buy in at $40. I think I'll wait until after the dividend and hope for another chance a $40 and then ride the price up to the mid $50's and sell before the exdiv date.

Also, last week OPEC oil ministers seem to be comfortable with a >$45 a barrel oil price. With China and India's groth its hard to see how oil is going to drop below $45 a barrel. Comments?

[New-born baby]

Can--

I waited too long to buy FRO this time. I was hoping buy in at $40. I think I'll wait until after the dividend and hope for another chance a $40 and then ride the price up to the mid $50's and sell before the exdiv date.

Also, last week OPEC oil ministers seem to be comfortable with a >$45 a barrel oil price. With China and India's groth its hard to see how oil is going to drop below $45 a barrel. Comments?

I don't see oil much below $45 for any length of time, and we may see $80 oil in a few years. China is an enemy: period. She has her eyes on world dominion, and she has said publicly that "there is not enough oil in the world to meet China's needs." (that's quote from her director of energy just two weeks ago). India, too, will be bidding up the price. So energy is an excellent sector to be in. And not just oil. There coal (FDG, KFX) and uranium. FRO is a tanker company. Look into a producer while you wait for the price to drop back to $40.

[spikefader]

I waited too long to buy FRO this time. I was hoping buy in at $40. I think I'll wait until after the dividend and hope for another chance a $40 and then ride the price up to the mid $50's and sell before the exdiv date.

Also, last week OPEC oil ministers seem to be comfortable with a >$45 a barrel oil price. With China and India's groth its hard to see how oil is going to drop below $45 a barrel. Comments?

Not too late for an entry imho. Weekly channel turn up. Daily bullish break, with channel turn up from 57.23 high. Green channel long today. I don't think the profit-taking will be that bearish today. Intraday there have been 4 waves on a 5 min chart. I will enter during the 5th wave down, buying into weakness with a limit around 52.50.

[jiesen]

I waited too long to buy FRO this time. I was hoping buy in at $40. I think I'll wait until after the dividend and hope for another chance a $40 and then ride the price up to the mid $50's and sell before the exdiv date.

Also, last week OPEC oil ministers seem to be comfortable with a >$45 a barrel oil price. With China and India's groth its hard to see how oil is going to drop below $45 a barrel. Comments?

Comments? Well, which is easier, to print a new $100 bill or to find a new barrel of oil reserves?

Oh wait, nevermind. I don't want to think about that!

[spikefader]

Re FRO post earlier today http://www.mrmarketishuge.com/forum/...&postcount=175

Here's my long entry, pattern changed to double bottom. The 5 wave move may have started from yesterday's high, so the double bottom today is a good time to support the stock.

[New-born baby]

Xom

Re FRO post earlier today http://www.mrmarketishuge.com/forum/...&postcount=175

Here's my long entry, pattern changed to double bottom. The 5 wave move may have started from yesterday's high, so the double bottom today is a good time to support the stock.

Spike,

My investor "in the know" friend in San Diego called me tonight with the news that XOM is dumping FRO shares like pouring sea water out of a boot. That's why today's red ink, and doesn't bode well for tomorrow. Then there's the ex-date of 3/3/05, and I am thinking this baby ain't worth a long until after a channel touch around $44. In any case, I sold my shares at $57.40 Monday, and looking back, it looks like a good move. Now let's see if looking forward is any better . . . .

Of course, I read fundamentals better than TA charts, and since charts don't lie like people, you are in better hands. Still, the chart doesn't know when the ex-date is. How do you take that into account? People can lie to me, but the chart can't be told anything! They just can't be reasoned with. Therefore, it only knows the past.

What I am trying to say is I don't think this is the time to take FRO long. The train has left the station. Double or nothing on the A&W root beers?

[spikefader]

You were spot on New-born.

Today is the channel long, and I'm adding on today's double bottom. I'll wait for head to form before setting a stop on these.

Great call on FDG by the way!

[canaveraldan]

Thanks fro the feedback opps thats for not "fro". I just could not bring myself to buy in once it went above $50. I did buy into CHK today. My only other holding is CMC. I'm trying to scrape some money togeather for FDG for a long. Newborn, Good call on FDG.