Monday Funday

Introducing my new aggressive 'mock' portfolio! The goal is simple; I want to virtually turn 4k into 5k in 3 months, so by the end of April, we'll see how we do! I thought this might be a bit of fun as its not a totally unrealistic 'play investment' but it'll keep me honest and I may learn something from it as well. I got the idea from a lot of these ads saying Joe Shmoe had 10,000 and bet on penny stocks to get to 1mil. Riiiiiight. I'm going to try and make my bones on real stocks and companies that are solid names, but use some leveraging strategies to try and squeeze a lot more out of it. Shall we begin? This should in no way be considered a good idea to do for real! This is risky! Thats why its PLAY

I'm going to kind of cheat here and place the C trade I mentioned last week here. For simplicity we will use the 10 options used last week. Remember, we bought the $4 option for April for $.89 and sold the 5 for $.21 so for our first $900 (the extra 10 is commission) we bought 10 Apr, 4 calls, then we sold 10 of the 5's for $200, so 700 of our 4k is in play.

Today's move is to try and get some leverage on ANR's purchase of Massey (you might remember I thought this would go through in Dec) Well ANR's drop today should be an overshot, so I'm buying the Feb 50 for 4.6, and selling the Feb 55 for $2.0 (lets do 3 of each) this will cost us 1390 and we get back 590, so $790 more is in play.

Finally a hedge lets do 20 FEB 11 calls of QID at .37 for a cost of $750

We are now 2240 of our 4k in...

Good luck and have fun!

12000 Here we come!

Grab the mo-mo and moooooove! Pretty much the word of the day today, will it(Dow 12k) break? Will it hold? I'm going for yes and yes, so its a good day to play the momentum (tomorrow will probably be a bit of a carryover too).

I'm a buyer today of C April calls at $.89, I'm also a seller of C April 5's at $.21. Here's the twisted logic (follow at your peril) Based on ~1k share purchase (10 options), I have essentially purchased(I have placed an order to buy) 1000 shares at 4000 (1000shares x $4)+1000($.89)=$4890, NOW I SELL 10 options of C $5 call for $.21 which nets me 210, This part is a little tricky. I have just sold shares I technically don't own yet, but that I have already agreed to buy at $4- so now I have control over 1000 shares which I have then agreed to sell at $5. Its kind of a covered call on crack.

What does this do for me? Well now my basis price for C (currently trading at $4.86) is 4890-210=4680, and YET I have only put in $680 dollars! Excluding transaction costs, if the stock sits where it is for 2 months the sold $5 options expire worthless netting me $210 - .03 x 1000 shares, or $30 which means I 'made' $180 on a $680 trade which is a cool 26% for owning a stock that did nothing.

In case you were curious, if the stock goes up we obviously do better, sadly we are capped at 44% once/if the stock goes above $5. That would be a tough day.

I'm going to try and use this strategy a bit more in the upcoming weeks. I hope it made some sense.

Good luck and be careful!

Snowin' again!

It has been a while since I last posted, probably due to the increase of work I've had, plus i haven't really seen any 'screaming' buys and maybe after the PCLN debacle last month I'm a bit more cautious. I don't normally do it but ASML dropped 8% after blowing away their earnings, the basis was they failed to discuss future bookings beyond the end of 2011. I found this a great opportunity as all analysts were upping their targets to 50, so I said thank-you-very-much to $37.10 and bought. Currently its sitting back at 41+ three trading days later and up a healthy 11% Placing a sell at 42 for today which in all likely hood won't hit today. As the Euro strengthens their cash (which is in EURO) looks better and the share price gets a built in hedge.

TCK is failing over the past 10 days, so its starting to look like an opportunity to rebound a little, but I'm still looking for more direction from the materials sector before I hop back in. IO has risen nicely, look for a .50 fallback tomorrow per its usual trend. If it does, I/m a buyer of the $9 Feb call.

Not much else going on.... good luck!

Snowed in

WE finally managed to extricate one lane out of our driveway, I'd say we got 16-19 inches last night so shoveling was fun. Now its off to work for a few hours, then back home to shovel out the other half!

Moves today, the market got some broad based good news from Portugal about their bond sale, so everyone is super happy, oil prices continue to climb despite as I read the futures are sitting on close to 400 unsold barrels in March. Waiting for that bubble to pop.... TCK continues its irrational climb on the back of the even more irrational price of Copper which continues to go through the roof. Again speculation (like oil) is driving these commodities, and when the music stops, you do not want to be holding it. (on the long side- as a short term/near term it could be very good, I'm looking for an in at the end of the month, and I'll keep it posted)

Put in sell orders of our two momentum trades from last week, INTC and GLW, I'm asking 1.34 on INTC 20's for Jan, and .64 on the GLW 20's. The Intel should net ~20% while the Corning a nicer 68%.

Look to the close for clues to tomorrow, I expect earnings reports to be good (again) but this will be the end- costs have been slashed to unsustainable lows, yet these efficiencies will be expected for at least 2 more quarters, and I don't see too many making that stick.

***Update GLW got hot around 2 so if you are still in the option is over 1 now (which is when I bought it originally what I was shooting for. I'm out at .82 missing .20 on the up move. Bummer)

Sometimes you are the windshield, others the bug

Ouch... So my PCLN guess took a nasty turn when expedia was kicked out of the house by American Airlines, this then resulted in an assumed increase in traffic from expedia to Orbitz, Travelocity, and Priceline, both of my Put calls got stopped out at 50% loss- not good. The Russel passed 800 so my bearish views seem lost. I'm all bull now (not really) but am more optimistic again for the short term. With ADP reporting a ton of new jobs last month the jobs report tomorrow should be very very interesting, if it re-iterates ADP's report yesterday tomorrow will be so green it will raise the spectre of the dot-com days, and money will be flowing in the streets. I am expecting the report to be good-after all if a payroll company says it must be so, I think it must be so. So I'm betting heavy on an up day. As nothing I have is particularly market friendly and nothing I'm following really appeals right now. (Coal is too high to fast, TCK/ANR) DGIT I'm too heavy, NUAN is moving slowly but I've lost interest, QXM is absolutely on FIRE this past week (now up 60%) and STILL under a $1.7 if the deal (when) (another 30%) it goes through. Smarts say to buy more, and I may look to improve my position.

Moves today; I got into Jan 20's of INTC at 1.01, (pure market momentum play) a good day is a gimme 25% I also got some Corning ( GLW) at .38 for Jan 20 again a momentum play. The latter move is already up nicely at 37%, looking for a double to recoup the losses on Priceline.

Bring the jobs, I'll bring the champagne

Happy New Years!

Happy new years everyone! I hope it was happy and healthy and the new year will bring happiness and good fortune to all. We spent our evening in a small (tiny) Scottish bar in VT which was... interesting, and yes it was fun too. I want a kilt too now.

The stock market got off to a rocking start (sure why not?) today so things are continuing the trend of up up up. I just don't buy it, even if I am gradually enjoying the ride. Copper continues its red hot ride up, so if you didnt sell your TCK 50 options last week (like I did, for a modest 35%) You are sitting on +100% so congratulations- sell it already!

I sneakily ran some trades last week after usually waking up at 11. I bought some Puts on NFLX (Netflix) because I don't see the price justified, and yes everyone loves Netflix, but that just means there is a larger retail segment priced in to that, and the financials don't quite make it for me. I bought at 3.3 and sold at 4.5 so that was nice. On the flipside I bought some calls for Priceline- another in-my-opinion overly bloated price, on Wednesday which was up 30+% at the end of Friday, but I failed to put the expiration date for good-to-close, so on Priceline's nice move up today that 30% gain is now a 30% loss (on paper) Its how the cookie crumbles- I still think its a good trade that I can wring some dough out of, in the mean time I bought 390 PUTS for 3.8 (already up 5%, with the ask up 15%)

I expect the good times to end soon, I have a order out for covered calls of DGIT 30 for 1.2 (Jan) which will provide some insurance, and better reduce my position should they close about 30.

Good luck!