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Lean With It

It’s expiration week and I’m sure your guess is as good as the market makers in terms of where prices finish on Friday. Let me tell you though, after looking over option prices at the close today, there is a ton of premium that will expire worthless on Friday. Do you have the cojones to sell any options here? Me neither. However, if you are looking to grab a piece of the pie before its gone, cover a short call with a long OTM call. While you have some significant gamma risk heading into expiration, you can still generate decent credits going 10% OTM.

Original Source: www.optionaddict.net


  15 October, 2008| Derivatives | Comments (0) @ 17:51
REIT ETFs Under Pressure

As companies go under and leave behind vacant office complexes across the country, REIT exchange traded funds (ETFs) feel the emptiness. It’s also certainly dampening any demand for new office space.
New York, for one, is looking at the end of its long-running building boom.
This year is the……
Original Source: http://feeds.feedburner.com/etftrends-feed


  15 October, 2008| Derivatives | Comments (0) @ 15:00
ETF Investors Feel Fright About Economy

Glum retail numbers this morning sent the markets and exchange traded funds (ETFs) into a tailspin, leading to the Dow Jones Industrial Average’s second-largest one-day point loss ever.
Investors are now bracing themselves for what could be an ugly recession, different from the brief and……
Original Source: http://feeds.feedburner.com/etftrends-feed


  15 October, 2008| Derivatives | Comments (0) @ 14:00
Second Highest VIX Close Ever: 69.25

The VIX spiked to 69.47 at 4:07 p.m. ET, just a few minutes after the equity markets closed (the VIX is calculated up until 4:15 p.m. ET, when index options trading ends) and settled at 69.25 for the day.This makes today the second highest close ever for the VIX, behind the 69.95 from last Friday.To put things into perspective:the VIX’s 10 day moving average is now 56.69…
Original Source: http://feeds.feedburner.com/VixAndMore


  15 October, 2008| Derivatives | Comments (0) @ 13:12
Closed USO Long Puts

On Friday I bought some coverage for my USO position.  I’m long 100 shares of USO and bought two puts to give myself some downside protection.  While USO was trading at $61.22, my limit order hit to sell the puts.  I sold to close both October 66 puts (UNAVN) for $5.20 each and received $1028.50 after commissions.  Originally I bought these puts for $871.49 a few days ago, giving me a r…
Original Source: http://feeds.feedburner.com/MyTradersJournal


  15 October, 2008| Derivatives | Comments (0) @ 13:00
ETFs Down and Out? Don’t Count on It

You’ve seen it several times this year: an exchange traded fund (ETF) shutters, and before long, the stories show up.
“Are ETFs Dead?”
“Was It a Case of Too Much, Too Soon With ETFs?”
“Should We Say Bye-Bye to the ETF Industry?”
Most people will tell you……
Original Source: http://feeds.feedburner.com/etftrends-feed


  15 October, 2008| Derivatives | Comments (0) @ 13:00
News Rallies Are Doomed - Retest Of SPY 85 Possible!

Yesterday, the market gapped higher after the US followed Europe’s lead. The Fed invested $250 billion into the largest financial institutions. This strategy gave banks a cash infusion and it will provide immediate relief. The prior plan of buying ill-liquid assets would have taken too long and the market wants immediate results. There were strings attached. The interest-rate payable on the preferred shares increases over time so that banks are indentified to retire the government’s investment. Issues like executive compensation and dividend payments were also addressed. The Fed also guaranteed all new bank loans for the next three years. These actions …

Original Source: http://feeds.feedburner.com/oneOptionBlog


  15 October, 2008| Derivatives | Comments (0) @ 12:44
Commodity ETFs Go for a Ride

The commodities market has done a complete 180, and the market for the bare ingredients that make the world turn have fallen, taking related stocks and exchange traded funds (ETFs) on a downward slide.
The commodity bull market of the past seven years has ended its run, as the financial panic……
Original Source: http://feeds.feedburner.com/etftrends-feed


  15 October, 2008| Derivatives | Comments (0) @ 12:00
Will Hank Pull Out an Expiration Bunny?

Our illustrious leaders have a fine tradition in the past year of saving some of their best ammo for the late Thursday/early Friday window so as to coincidentally get their best bang for the buck….
Original Source: adamsoptions.blogspot.com


  15 October, 2008| Derivatives | Comments (0) @ 11:54
VIX Spikes to 66.25

Many market sentiment indicators at extremes again, suggesting strong possibility of a reversal…
Original Source: http://feeds.feedburner.com/VixAndMore


  15 October, 2008| Derivatives | Comments (0) @ 11:17
Austria’s Forex Safeguards Could Protect ETF

Austria is taking steps to protect itself and its exchange traded fund (ETF) by capping retail foreign exchange loans.

Boris Groendahl for Reuters explains that Austrian banks have stopped lending to domestic retail customers in foreign currencies, a move that will curtail their exposure to market……
Original Source: http://feeds.feedburner.com/etftrends-feed


  15 October, 2008| Derivatives | Comments (0) @ 11:00
Retail Sales Leave ETFs With an Empty Cart

Retail sales in September continued to show that consumers aren’t ready to splurge, and related exchange traded funds (ETFs) aren’t ready to perform.
The 1.2% drop in sales was even worse than expected, and was the largest plunge in three years, reports Martin Crutsinger for the……
Original Source: http://feeds.feedburner.com/etftrends-feed


  15 October, 2008| Derivatives | Comments (0) @ 10:00
Excellent Summary of Financial Crisis at Freakonomics

I normally shy away from devoting a post entirely to heaping praise at one particular post out in the blogosphere, but Steven Levitt’s (of Freakonomics fame) Everything You Need to Know About the Financial Crisis: A Guest Post by Diamond and Kashyap …
Original Source: http://feeds.feedburner.com/VixAndMore


  15 October, 2008| Derivatives | Comments (0) @ 9:49
Could Today Be a Higher Low?

Don’t be surprised if that turns out to be the case……
Original Source: http://feeds.feedburner.com/VixAndMore


  15 October, 2008| Derivatives | Comments (0) @ 9:37
Fox Going Negative

Fox Biz channel. Seriously. This is an attack ad on Cramer, lmao. Hat tip Michael Parekh.

Original Source: adamsoptions.blogspot.com


  15 October, 2008| Derivatives | Comments (0) @ 8:57
Implied Volatility Over 150 in EWZ, the Brazil ETF

Truth be told, I could pick a ticker at random and have a compelling chart of implied volatility. Some, of course, are more compelling than others. Take EWZ, for instance, the Brazil ETF. This resource-rich country has seen its ETF lose more than half of its value over the past year, coupled with a dramatic rise in volatility over the course of the past month. …
Original Source: http://feeds.feedburner.com/VixAndMore


  15 October, 2008| Derivatives | Comments (0) @ 8:36
Laissez Faire: A Dialogue in One Scene

INT. CLASSROOM.
CAPITALISTS are assertive, industrious, and creative teenagers, trying to make up in earnestness what they lack in wisdom and good judgment.  As the scene opens, Capitalists are pacing the room, clearly panicked.
Capitalists: Oh, s#@t, this is not good.  This is not good.
UNITED STATES FEDERAL GOVERNMENT peeks its head in the doorway.  United States Federal Government is best described as bipolar, alternating as it does between a personality that strives to protect its citizens from dangers both foreign and domestic, and a personality that exhibits apathy and malign neglect.

Original Source: http://feeds.feedburner.com/condoroptions


  15 October, 2008| Derivatives | Comments (0) @ 8:13
Close XLB Position for a Profit

I bought insurance puts on XLB (Materials Select Sector SPDR Fund) at the beginning of last week and then sold XLB puts at a lower strike and nearer expiration a couple of days lower to cut my costs.  I ended up profiting on both legs.  The puts I sold expire in three days and the puts I bought have a month to go.  With the markets falling again I took the opportunity to take a profit on both while I could.  I might have been able to make more on the puts I sold by letting them expire worthless, but decided to get out while I could with a profit.  I also removed the hedge I had since I think our downside risk is smaller than our upside potential at current prices.

Original Source: http://feeds.feedburner.com/MyTradersJournal


  15 October, 2008| Derivatives | Comments (0) @ 7:47
Roubini-Palooza

So by day, Nouriel Roubini is Dr. Doom. Brilliant. And stunningly correct to this point.By night, still partying like it’s 1999. T…
Original Source: adamsoptions.blogspot.com


  15 October, 2008| Derivatives | Comments (0) @ 7:15
Restaurants Struggling, ETFs Put Down the Fork

The restaurant malaise that began around two years ago has begun to intensify as the financial turmoil has affected the number of sit-down diners, leaving entertainment and leisure exchange traded funds (ETFs) to starve.
Janet Adamy for The Wall Street Journal reports that beginning this month,……
Original Source: http://feeds.feedburner.com/etftrends-feed


  15 October, 2008| Derivatives | Comments (0) @ 6:00
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