We are formally in a recession now. Q2 GDP came in at -0.9%. Good news, no more hawkish Fed! They knew the data yesterday, which is likely why Powell foreshadowed the pivot in rate increases.
OT: Stock and Investment Talk
- Thread starter RU-05
- Start date
Why is this? Because the stock tanks while I'm holding and selling calls?
I've certainly experienced this this year, but I didn't want to be completely on the sidelines, though looking back that would have been the better play.
Of course I can always lower the strike price, though that then risks losing the stock for less then my purchase price.
Without getting too far in the woods, a big drivers of option pricing are intrinsic value (in or out of the money), time value and implied volatility. Assuming you are selling out of the money calls, you have $0 intrinsic value. Then you are just selling time value and volatility. Therefore, if you are selling short dated calls (probably less than 45 days to expiration) on a stock with out much implied volatility, there is not much premium to be had. Throw in commissions and it can take you a long time to repair a trade that goes against you.
Good to see Microsoft roar back. After all, Fed rate cuts are right around the corner…
Down 7,500% today on the $19 strike call's I sold on my PLUG holdings.
Suffice it to say, that holding is going to be called away.
Still did all right there though. 20% plus the premiums in a month or so.
Will sell some puts early next week. See if I can't get it back.
Suffice it to say, that holding is going to be called away.
Still did all right there though. 20% plus the premiums in a month or so.
Will sell some puts early next week. See if I can't get it back.
I'm targeting volatile stocks with this strategy, and given most of these are stocks way off their highs and have found a bit of a floor, I'm setting my strikes off these levels.
If I had faith that these stocks, or the market in general, was ready to begin it's upward climb I'd just own the stocks(and maybe sell some out of the money calls) but doesn't seem we are there yet(interesting to see if we break out here or tumble back once again).
Certainly works best in a sideways to down market. Limits your upside in a bull market. It is a good way to generate income. Just be careful with your losses. One bad trade can easily wipe out profits from 10 good ones. To avoid this, one way you can hedge the long stock/short call is with a long out of the money put. Use some of your premium received for selling the call to buy some insurance with the put. You can also do this when you are starting out with the short put so you know what your floor is on the common stock. When you sell the initial put, use some of the cash to buy a lower price put as a hedge. But, this cuts in to your profit as well.
+1
AMZN goes KABOOM!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Amazon jumps on revenue beat and rosy guidance for third quarter
Amazon on Thursday reported second-quarter results that beat on the top line and issued rosy sales guidance for the third quarter.
AWS/Cloud is crushing it:
Amazon says cloud-computing revenue rose 33%, topping Wall Street estimates
Amazon continues to count on Amazon Web Services as a major source of profit given the unit's high margins.
IMO, those analysts that came up with those estimates should have been fired. Probably cost their firms and clients millions if not billions of dollars.
From the article:
Amazon recorded a $3.9 billion loss on its Rivian investment after shares of the electric vehicle maker plunged 49% in the second quarter ended June 30. That resulted in a total net loss of $2 billion, and brings its loss for the year to $11.5 billion on the Rivian investment.
Because of the Rivian writedown, analyst estimates varied dramatically, making it difficult to compare actual results to a consensus number.
Amazon jumps on revenue beat and rosy guidance for third quarter
Amazon on Thursday reported second-quarter results that beat on the top line and issued rosy sales guidance for the third quarter.
And batting clean-up --- Double Beat for AAPL, with guidance on growth to accelerate.
Also beat on gross margin and iPhone rev. Another great quarter!
www.cnbc.com
Also beat on gross margin and iPhone rev. Another great quarter!
Apple beats on revenue and profit, expects growth to accelerate despite 'pockets of softness'
Apple reported earnings on Thursday for its fiscal third quarter ending in June.
You mean, they possibility found a bottom (June 16). Up 13-14% since then. We shall see.
Yea they've rallied but it's always possible they come back down. I'm saying even if they come back down, maybe it won't be appreciably lower than the lows we've seen already. Possible consolidation for awhile.
All depends on the next set of inflation numbers. Those start going down and stocks start going up. Simple as that.
On the other side, ROKU crash and burns.....just like TDOC yesterday:
www.cnbc.com
Roku shares crater after company misses on earnings and warns of 'recessionary fears'
Roku shares plummeted more than 25% in extended trading on Thursday after the company missed expectations on the top and bottom lines for its second quarter.
Nah, sounds worse then it is, though I am missing about 10% of upside on PLUG. Though I imagine part of that will come back in short term.
I needed this one.
The market does too.
I dunno, but tough to see the market get back down to 3600-3300 after the response to earnings from AMZN and AAPL.
I disagree with that article's conclusion. Analysts on Wall Street are highly compensated, highly educated "experts" who should be able to dig into financial reports and come up with better estimates than they came up with.From the article:
Amazon recorded a $3.9 billion loss on its Rivian investment after shares of the electric vehicle maker plunged 49% in the second quarter ended June 30. That resulted in a total net loss of $2 billion, and brings its loss for the year to $11.5 billion on the Rivian investment.
Because of the Rivian writedown, analyst estimates varied dramatically, making it difficult to compare actual results to a consensus number.
Amazon jumps on revenue beat and rosy guidance for third quarter
Amazon on Thursday reported second-quarter results that beat on the top line and issued rosy sales guidance for the third quarter.
Were the analysts sandbagging or were they dupped by companies sandbagging? Either scenario is bad.
Predicting the future is a tough business, even for experts.
Consensus is always going to allow for an upside beat, or a down side miss.
ETH has been pumping. May have missed my opportunity for a quick ETHE play.
Still a long way to get back to ath. Opportunity is still there
Enjoying the AMZN pop. Truly. But bigger picture, I have to think the current overall market bounce is a classic bear market rally, maybe lasting a few more weeks. But ultimately settling down then retreating toward the low 3000s as fall approaches. Happy days are here again... until they're not....
If CPI pivots like the leading indicates suggest, this bear market rally will be the "rally" and lots of folks will miss out. That's what everything comes down to.....how quickly will inflation drop? The Fed announced their willingness to pivot, so the stars are aligned for kaboom. Will CPI light the match?
😁
I think the question is not only is inflation peaking (which it might be) but how much will it drop? The Fed target 2 and I don't expect that any time soon really but suppose it peaks and drops to say 4-6 and stays there. Is that good enough? Personally, I don't think so.
The market was a juggernaut last year while inflation at 5% and creeping up. Also, the Feds long term goal is 2% and since we were under that for so long, coming back down to 3%'ish will be fine (as per Powell). Fed happy, market happy.
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I would say some of both. Analysts get guidance from the company and also do some of their own digging and modelIng. I frankly don’t know what guidance was provided by the company in this instance but such guidance is generally a big factor—in my opinion.
I’ve been moving more assets into the market the last two weeks and now close to 37%. I believe many of the Tech stocks have hit their low for the year. It appears the Tech stocks have done very well the last few days which is encouraging. I guess the rate increase might lower the market again but feel people that wanted to sell have sold already. I am starting to doubt the 30% bottom and if it goes lower then 25% is the low.
I think the S&P and the mega Tech stocks have reached their bottom already. Time to move more into the market.
Throwing this out there for any advanced traders
VXX, which many of you know mirrors the volatility index has been out of whack since March ( they haven't been able to create new shares). This will be corrected on or around September 15. Currently, the premium over it's actual value is $3.20, this is guaranteed to go to ZERO when they make the announcement
Shares are hard to borrow, so be creative. Also, VIXY is a proxy for how VXX SHOULD act
Risk is that with little to no shares to short, we get a GameStop type squeeze in the next month, but given that this has a defined value and a defined end date, that would just be a game of Russian roulette for anyone foolish enough to try that
VXX, which many of you know mirrors the volatility index has been out of whack since March ( they haven't been able to create new shares). This will be corrected on or around September 15. Currently, the premium over it's actual value is $3.20, this is guaranteed to go to ZERO when they make the announcement
Shares are hard to borrow, so be creative. Also, VIXY is a proxy for how VXX SHOULD act
Risk is that with little to no shares to short, we get a GameStop type squeeze in the next month, but given that this has a defined value and a defined end date, that would just be a game of Russian roulette for anyone foolish enough to try that
