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IDS World Markets Tues 27th October 09


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#31 Rationalize

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Posted 27 October 2009 - 09:32 AM

What do you mean? THere is a tremendous advantage is being the SELLER of options -- just ask Shorty, who sold naked BIDU calls yesterday -- pure profit for his gutsiness now.

Ah seriously.

Look at the pricing models that the market makers use.

This is not debatable.

Options are priced AT the cost of hedging.

Non-arbitrage pricing .. Finance 101 .. etc..

p.s. Please for one's own safety, learn this.
PARTY! NORTH KOREA! SATURDAY NIGHT! BYOF (bring your own food)

#32 dogsie

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Posted 27 October 2009 - 09:33 AM

Con con out at 10
Insanity: doing the same thing over and over again and expecting different results. Albert Einstein
You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time. Abraham Lincoln
Those who cannot remember the past are condemned to repeat it George Santayana

#33 DrStool

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Posted 27 October 2009 - 09:35 AM

resistance 1070.50 is also initial 5 hr cycle projection.

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#34 I_Am_Madness

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Posted 27 October 2009 - 09:36 AM

BIDU dec puts.
Sold it at 21 and 22 at the open.
Had an order at 26 but it didn't get hit....high was 25.

Sold the hedge too at 368.
Stop the Madness

#35 phatbubble

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Posted 27 October 2009 - 09:37 AM

Schwab: The S&P/Case-Shiller Home Price Index was released this morning and showed a decline in home prices of 11.3% year-over-year (y/y) in August – less than the 11.9% fall that had been expected.

Maybe news that's "less shitty than expected" no longer provides quite the same euphoric effect...
Quod Severis Metes

Your life is the sum of a remainder of an unbalanced equation inherent to the programming of the Matrix. You are the eventuality of an internal anomaly, which despite my sincerest efforts, I have been unable to eliminate from what is otherwise a harmony of mathematical precision. While it remains a burden assiduously avoided, it is not unexpected, and thus not beyond a measure of control. Which has led you, inexorably, here.
You haven't answered my question.
Quite right. Interesting. That was quicker than the others.

#36 ChicagoBear

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Posted 27 October 2009 - 09:38 AM

I found a fly in the ointment. Despite all the selling that’s happened over the past 5 weeks, the market has hardly budged. It occurred to me this am that this is perhaps the most lopsided my distribution/accumulation counts has ever been! I even went back to the crash of ’08 and could not find any rolling 5 week period where the distribution days where higher than they are now.

Just for reference, we have now seen 9 dis days on the S&P, 8 on the DOW, and 6 on the NAS over the past 5 weeks. During the period from 5/30/08-6/27/08, when the markets topped and started to slide, there were 8 dis days on both the SP & NAS. During Aug-Sept months I could find 7-8, and during the Sep-Oct months I could find 8-9 days.

While this may sound like silly bean counting, what I’m getting at is that from my school of thought, we’ve seen as much selling as ever occurs in any 5 week period. I don’t know where the money would come from, but if this thing doesn’t collapse hard and fast over the next few days, I would have accept that the buyers could return and the accumulation days will start showing up. Unless there is a tsunami approaching, the tide will pull out. Historical precedents are rare.

I’m not going to lose my conviction over this. I really believe we are watching a top unfold. I have been building a short position and holding through the wild reversals with the conviction that the markets will break-down at some point. But as these distribution days continue to mount without the markets breaking down, it becomes increasing possible that the markets are not going to.

I will be treading lightly from this point on. I’m only posting this as a warning for bears to be safe.
If we don't change our direction, we're likely to end up where we are headed.
It wasn't raining when Noah built the Ark.
"and the vicious cycle will feed on itself in an orgy of cannibalistic self destruction until even the skeletal remains of the system are ground into powder." - Doc, 3/2/09

#37 Drano

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Posted 27 October 2009 - 09:39 AM

Ah seriously.

Look at the pricing models that the market makers use.

This is not debatable.

Options are priced AT the cost of hedging.

Non-arbitrage pricing .. Finance 101 .. etc..

p.s. Please for one's own safety, learn this.

What I am saying is, it is a good strategy to sell naked calls at elevated levels as Shorty did, and taking advantage of elevated premiums is smart. Or, sell naked puts if you are confident that a stock is going up. I agree, it is not debatable that Shorty and I have made money doing this. Trading 401.
Of course I'm caustic!

#38 I_Am_Madness

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Posted 27 October 2009 - 09:45 AM

What I am saying is, it is a good strategy to sell naked calls at elevated levels as Shorty did, and taking advantage of elevated premiums is smart. Or, sell naked puts if you are confident that a stock is going up. I agree, it is not debatable that Shorty and I have made money doing this. Trading 401.


I agree.
It's all about making money.
Reading and underlying fundamentals isn't going to mean jack if you can't trade off of it.
Stop the Madness

#39 Rationalize

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Posted 27 October 2009 - 09:45 AM

...
While this may sound like silly bean counting, what I’m getting at is that from my school of thought, we’ve seen as much selling as ever occurs in any 5 week period. I don’t know where the money would come from, but if this thing doesn’t collapse hard and fast over the next few days, I would have accept that the buyers could return and the accumulation days will start showing up. Unless there is a tsunami approaching, the tide will pull out. Historical precedents are rare.
...

From unloading non-guaranteed money market accounts?
PARTY! NORTH KOREA! SATURDAY NIGHT! BYOF (bring your own food)

#40 Drano

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Posted 27 October 2009 - 09:48 AM

Madness, you going in on the Dec 300 BIDU puts yet?
Of course I'm caustic!

#41 Rationalize

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Posted 27 October 2009 - 09:48 AM

What I am saying is, it is a good strategy to sell naked calls at elevated levels as Shorty did, and taking advantage of elevated premiums is smart. Or, sell naked puts if you are confident that a stock is going up. I agree, it is not debatable that Shorty and I have made money doing this. Trading 401.

If you get the direction right, nothing much else matters. :lol: :lol:

If not, short options can be all kinds of "fun". Ask Shorty about the margin man last opex.

No mathematical advantage being dong or chort options.
PARTY! NORTH KOREA! SATURDAY NIGHT! BYOF (bring your own food)

#42 Ags Nightmare

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Posted 27 October 2009 - 09:49 AM

Why do I get the feeling the rocket thats gonna blast off is an omen....
"I went out and bought an Apple Computer; it had a worm in it"....."When I was born, I was so ugly that the doctor slapped my mother"....'I played hide and seek; they wouldn't even look for me.'- Rodney Dangerfield

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#43 Lemur

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Posted 27 October 2009 - 09:49 AM

What I am saying is, it is a good strategy to sell naked calls at elevated levels as Shorty did, and taking advantage of elevated premiums is smart. Or, sell naked puts if you are confident that a stock is going up. I agree, it is not debatable that Shorty and I have made money doing this. Trading 401.


The problem with that Drano is that you are making a directional bet with an asymmetric pay off. With that method you can have 90% winning trades and still lose money if you get the direction & magnitude of the move wrong only 10% of the time.

#44 I_Am_Madness

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Posted 27 October 2009 - 09:50 AM

Madness, you going in on the Dec 300 BIDU puts yet?


Not yet..
Waiting for a backkiss of the 50 dma...
Stop the Madness

#45 DrStool

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Posted 27 October 2009 - 09:50 AM

2 day cycle indicator cusp of buy signal.

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