Hello Suckers ... http://hellosuckers.net Making 45% Annually Trading Options Against Dividend Growth Stocks Fri, 29 May 2015 04:03:55 +0000 en-US hourly 1 http://wordpress.org/?v=4.2.2 Nothing exciting before GDP data adjustment. http://hellosuckers.net/nothing-exciting-before-gdp-data-adjustment/ http://hellosuckers.net/nothing-exciting-before-gdp-data-adjustment/#comments Fri, 29 May 2015 04:03:55 +0000 http://hellosuckers.net/?p=2173 Continue reading →

This is a post from: www.hellosuckers.net. If you want to know more about investing in stocks and options or my Portfolio performance visit www.hellosuckers.net blog today. If you are reading this post anywhere else besides Hello Suckers! blog, then it has been shamefully stolen. Copyright © 2008-2015 www.hellosuckers.net

Nothing exciting before GDP data adjustment.

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The market did exactly what I expected. It went down and later recovered the selling. But the recovery wasn’t strong enough to push the market higher, so it ended down.

Tomorrow we will see GDP revised. This may be a market mover. Will it be taken positively or negatively by the investors? Normally, I would say the market would go higher tomorrow, but if the freaks at Wall Street get spooked and irrational again, the market would go down.

Let’s see tomorrow though. For now, I would call the market to go UP.
 

This is a post from: www.hellosuckers.net. If you want to know more about investing in stocks and options or my Portfolio performance visit www.hellosuckers.net blog today. If you are reading this post anywhere else besides Hello Suckers! blog, then it has been shamefully stolen. Copyright © 2008-2015 www.hellosuckers.net

Nothing exciting before GDP data adjustment.

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If you sell a put against dividend stock, do you pay a dividend? http://hellosuckers.net/if-you-sell-a-put-against-dividend-stock-do-you-pay-a-dividend/ http://hellosuckers.net/if-you-sell-a-put-against-dividend-stock-do-you-pay-a-dividend/#comments Thu, 28 May 2015 19:18:52 +0000 http://hellosuckers.net/?p=2172 Continue reading →

This is a post from: www.hellosuckers.net. If you want to know more about investing in stocks and options or my Portfolio performance visit www.hellosuckers.net blog today. If you are reading this post anywhere else besides Hello Suckers! blog, then it has been shamefully stolen. Copyright © 2008-2015 www.hellosuckers.net

If you sell a put against dividend stock, do you pay a dividend?

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Recently, I got this question from a subscriber of mine.

“Do you have to pay a dividend if you sell a put option against the dividend paying stock?”

It is a good question and short answer to that is no, you do not pay the dividend.

You are obliged to pay the dividend (its substitution) only if you sell the stock itself short. A put option is a completely different instrument, which although corresponding to the underlying symbol doesn’t carry any rights or obligations of a stock. Thus only a stock will give you the right to receive the dividend if the company decided to pay one.

With options you only have the right or obligation to either sell or buy the underlying stock at expiration and at a given price.

And of course, it is the same with call option. When you buy a call option, you will not receive the dividend either.

Happy trading and if you have a question, don’t hesitate to ask!

This is a post from: www.hellosuckers.net. If you want to know more about investing in stocks and options or my Portfolio performance visit www.hellosuckers.net blog today. If you are reading this post anywhere else besides Hello Suckers! blog, then it has been shamefully stolen. Copyright © 2008-2015 www.hellosuckers.net

If you sell a put against dividend stock, do you pay a dividend?

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FED Conundrum http://hellosuckers.net/fed-conundrum/ http://hellosuckers.net/fed-conundrum/#comments Thu, 28 May 2015 03:11:14 +0000 http://hellosuckers.net/?p=2169 Continue reading →

This is a post from: www.hellosuckers.net. If you want to know more about investing in stocks and options or my Portfolio performance visit www.hellosuckers.net blog today. If you are reading this post anywhere else besides Hello Suckers! blog, then it has been shamefully stolen. Copyright © 2008-2015 www.hellosuckers.net

FED Conundrum

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Sometimes I like to be wrong in my market move expectations. Like today. I expected the market to move lower yet it moved up. It recovered almost all losses from yesterday.

I have a few long positions so it obvious that I wanted to be wrong in my expectations.

It looks like, we have experienced yet another spooky day yesterday. FED mentions a possible hike rate and investors panic. What is funny on that interest rate hike frenzy is that it didn’t happen yet, no one knows whether it happens at all and yet Wall Street is rushing to the exit. Yellen and her cohorts are just speaking about the possibility of the rate hike and it is not clear whether she will really do it at all.

Spook em
Courtesy: Stefan Cheplick’s Tumblr

So why are Wall Street freaks trembling whenever you just whisper “interest rate” words?

Those freaks out there are scared of money being more expensive would make it harder to borrow for the companies and thus slow down company’s growth.

“Higher interest rates has investors nervous about higher borrowing costs, which are negative for company profits and ultimately stocks. There’s also concern about market liquidity – how easily investors will be able to meet client redemptions if they come suddenly.” John Stoltzfus, Oppenheimer chief investment strategist

If you look at the base of the fear, considering that it really had something to do with the selloff, you must agree that Wall Street is really crazy.

What challenges are in front of FED?

Economic growth

As of now, the US economic growth is sluggish and actually slowing down. The GDP fell in three consecutive quarters and there is no sign of improving. We have seen bad reports across almost all companies out there. The only thing which makes them look good is buybacks. Consumers who were expected to spend their windfall from cheap oil did the right opposite and used the money to either pay off their debt or saved them.

The work force participation is smaller every month, jobs are mostly temporary, part time jobs. Salaries are stagnant and actually lower (inflation adjusted) than they were in 2008.

With the sluggish economic growth would raising the rates help the economy? Yellen is trying to convince us that the slowdown is seasonal and that it was caused by bad weather, too good weather, or who knows what else.

Raising the rates would slow the growth or even kill it whatsoever as the Wall Street freaks are correctly worried about. If they know it, Yellen does know it too. Would she be that stupid and raise the rates to kill the dying patient?

Enormous debt

People seem not to be talking about this item or dismiss it as irrelevant. I cannot help myself but I still am thinking about interest rates from the ordinary Joe perspective. Who typically benefit from low interest rates? Debtors or savers? Just go to the bank and open a savings account. What interest rate would you get? A miniscule 0.80% if you are lucky. Maybe 0.90%. Would you be saving happily in such environment?

And now, go and borrow that money. Unless you go to a credit card predator you may get the rate somewhere at around 15%. I was even able to obtain a personal loan at 7%. Most rates are fixed and consumer debt is expensive, but the government is mostly borrowing for what the rates are through bonds. Now, bonds are bearing some 3% or 2.5% interest. If FED raises the rates, bonds will become cheaper and their rates will go up.

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Of course, this will not impact existing bonds, but the new ones. And how is the US government managing the debt (forget now for a moment that they manage it so badly that even a total idiot wouldn’t dare doing it the same way)? They refinance the debt. As the old bond coupons are to be paid, the US government uses taxes and new debt to pay the old bonds. So they issue new bonds. That’s a luxury Greece no longer possesses. And if we act irresponsibly, we will follow the suit. Can you imagine FED raising rates to 2% by the end of 2016? Bond rates would simply go higher too and bear 5% in lieu of 3%. With $17 trillion dollars debt the US government would have to refinance at some point (they will never refinance the entire debt at once but in small increments, mostly adding new debt) at a lot higher rates and that would be very costly.

Would Yellen sink the US government into deeper debt hole? I think she won’t dare doing it.

End of recovery, political failure

There will be many people telling me that I do not understand the modern economy and that is true. I don’t. I look at the economy from a simple perspective – accounts payable and receivable. Anything beyond this is just a hocus-pocus juggling.

If we pretend to believe that we have a recovery, raising rates now would end this recovery for sure. Mostly for reasons above – more expensive money would encourage savers rather than spenders. And the US economy is based on consumer spending not saving. If consumers start spending, the inflation starts rising. And it is not happening now and it will not happen after raising the rates for sure.

I think, Yellen sees it although she will not admit it.

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Another issue is political and I believe that is one of her most important items to watch carefully. She will not dare to create collapsing market as it would look bad for the current (and any of the future) government. For six years we have been listening about great recovery from politicians and now boom. A crash. It will happen one day, but now I believe it is not politically sustainable as well as Yellen doesn’t want the market collapse (and take the economy with it) under her watch.

So, she is releasing test balloons into the economic air to see how investors, market, and or economy would react to interest rates hike. She can clearly see, that it will be nasty. Will she dare doing it and raising rates?

We will see. She may do it. I hope, I will be ready by then and not in the long positions as it seems the market will see a storm.

Are low rates good for us?

Now they are not. But I am still convinced that it wouldn’t be good for economy to raise them. Yellen can do it and risk economic turmoil and Wall Street storm. Maybe she will survive it politically, but she will do the right thing and let the economy heal itself. But she is a leftist and that doesn’t go to her agenda.

The best reason why low rates are bad were expressed by Bill Gates in the video below:
 

 

Market expectation for May 28th

The market recovered almost all losses from yesterday. Yet we are not out of the forest and we may see more selling to come tomorrow. However, today’s trading “saved the trend” and I do not expect down trend continuation. However, tomorrow we may see some selling pressure in the morning to compensate today’s bullish pressure, but at the end we will most likely end up higher. I expect the market to go UP
 
 

This is a post from: www.hellosuckers.net. If you want to know more about investing in stocks and options or my Portfolio performance visit www.hellosuckers.net blog today. If you are reading this post anywhere else besides Hello Suckers! blog, then it has been shamefully stolen. Copyright © 2008-2015 www.hellosuckers.net

FED Conundrum

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$SPX market expectation for Wednesday, May 27th http://hellosuckers.net/spx-market-expectation-for-wednesday-may-27th/ http://hellosuckers.net/spx-market-expectation-for-wednesday-may-27th/#comments Tue, 26 May 2015 23:59:55 +0000 http://hellosuckers.net/?p=2168 Continue reading →

This is a post from: www.hellosuckers.net. If you want to know more about investing in stocks and options or my Portfolio performance visit www.hellosuckers.net blog today. If you are reading this post anywhere else besides Hello Suckers! blog, then it has been shamefully stolen. Copyright © 2008-2015 www.hellosuckers.net

$SPX market expectation for Wednesday, May 27th

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(05/26/2015 HS) – Market took a hit today. Quite large one, compared to the non-moves we have seen in previous days. The S&P 500 lost 1% today. It could have been more, but at the last hour the market rallied and erased some losses. Should we be worried?

Hard to answer that question. The market lost on renewed fear of FED rising interest rates. It all has been here already. We have all seen this. This is nothing new and yet investors are freaking about it.

Does the economy justify interest hike? I do not think so. But I am not an economist and I can’t say. I just use common sense to make this judgement. But common sense is no longer used and desired in today’s Wall Street game or the economic books cooking.

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We are seeing FED applying all sorts of monetary hocus-pocus, kicking the can down the street and yet we see us floating. They do things even a financially irresponsible person wouldn’t dare doing and it flies by. Well, maybe we will see consequences later on.

Is the selling, we experienced, good for the market? Will it continue? No one knows. What troubles me with this market though is the pattern I am seeing. When the market goes higher, it is usually on a low volume, but when it sells off, the volume spikes up. This is troublesome.

Analysts are expecting this market going higher. But who are they? These are people from Goldman Sachs or Merrill Lynch, for example. Is their prediction meant to be good for all or are they just pumping this market up so they can get out?

Today’s selling provided a lot of technical damage. Many of my indicators I watch turned down. But nothing is lost yet. We still may see a bounce and recovery. We may see a bouncy market.

The market is quite oversold now (note, I am looking at a short period of time now at a daily frame) and we may see a bounce. It may not be a big one, however. The good thing was that bulls stepped in at the end of the trading session and pushed the market higher. They may have some more power left and recover this market.

Unfortunately, I do not think this will happen tomorrow. We may see some buying in the morning, but the rest of the day will belong to bears and I expect this market to go DOWN.
 
 

This is a post from: www.hellosuckers.net. If you want to know more about investing in stocks and options or my Portfolio performance visit www.hellosuckers.net blog today. If you are reading this post anywhere else besides Hello Suckers! blog, then it has been shamefully stolen. Copyright © 2008-2015 www.hellosuckers.net

$SPX market expectation for Wednesday, May 27th

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$SPX market expectation for Tuesday, May 26th http://hellosuckers.net/spx-market-expectation-for-tuesday-may-26th/ http://hellosuckers.net/spx-market-expectation-for-tuesday-may-26th/#comments Mon, 25 May 2015 20:39:38 +0000 http://hellosuckers.net/?p=2167 Continue reading →

This is a post from: www.hellosuckers.net. If you want to know more about investing in stocks and options or my Portfolio performance visit www.hellosuckers.net blog today. If you are reading this post anywhere else besides Hello Suckers! blog, then it has been shamefully stolen. Copyright © 2008-2015 www.hellosuckers.net

$SPX market expectation for Tuesday, May 26th

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(05/25/2015 HS) – On Friday, last week, I expected the market to move higher. I expected FED to be taken positively by investors as they would see that FED will most likely postpone interest rates hike due to slowing economy. I didn’t have time to watch or read what actually Yellen said, but overall results would be that FED is ready to raise the rates, probably in September, this year. I think such step would be bad for the US economy and slow it even further, but I am not here to judge or predict that. It’s just my guts.

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However, the market acted mixed on the news. The investors took it positively at first and the market went up, but it didn’t have enough strength to sustain the move and by the end of the trading session, it fell down.

Such weakness can be detrimental for the recent break out and stop it where it began. Although I do not like it myself, I think this weakness will continue and investors will continue freaking out and selling equities. For tomorrow, I expect the market to go DOWN.
 

This is a post from: www.hellosuckers.net. If you want to know more about investing in stocks and options or my Portfolio performance visit www.hellosuckers.net blog today. If you are reading this post anywhere else besides Hello Suckers! blog, then it has been shamefully stolen. Copyright © 2008-2015 www.hellosuckers.net

$SPX market expectation for Tuesday, May 26th

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