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Posted by Martin December 24, 2008
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Happy Holidays

Happy Holidays

Merry Christmas






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All Dividend Investing,  Options Trading,  Personal Finance
Posted by Martin December 23, 2008
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Madoff’s lesson


America is shocked and people are angry, because they lost a lot of [tag]money[/tag] and the “government didn’t protect them”. Are we in socialism? [tag]Madoff[/tag] provided us with a very good lesson. One of the best actually. Unfortunately some people had to pay a large fee for it. A [tag]ponzi scam[/tag] is well known and one of the rules to recognize it would be: If something is too good to be true, do not trust it.
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All Dividend Investing,  Options Trading,  Personal Finance
Posted by Martin December 19, 2008
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Picks 12/15 – 12/19


No [tag]new picks[/tag].

There is nothing to buy out there.

Existing holdings:

100% CASH


Contribution this week: $200

Starting account value = $2,009.80

Account value = $2,009.80 (without margin)

Buying power = $2,009.80

[tag]Portfolio Gain/loss[/tag] this week = 0.00%

[tag]Portfolio[/tag] Gain/Loss for DECEMBER 2008 = 0.00%

Portfolio Gain/loss since inception = -19.19%

[tag]Annual Return[/tag] (CAGR): -19.19%

Now the portfolio is 100% cash, waiting for the new confirmed rally. I transferred all money to a savings account and I will be saving more money for the new upturn, study the market and wait.


Are you interested in Reverse Scale Strategy and see how it works when implemented to even a small account?

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Links:

$4.95 Trades + $.65 per Contract – Market or Limit, No Minimums. www.TradeKing.com

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TradingSolutions: Financial analysis and investment software that combines technical analysis with neural network and genetic algorithms.

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All Dividend Investing,  Options Trading,  Personal Finance
Posted by Martin December 17, 2008
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Stock Options review


On Monday, December 15, 2008 I filled my first [tag]stock option[/tag] [tag]covered call[/tag] trade. However it was very confusing for me and when I reviewed it I didn’t understand what I was doing. The [tag]account[/tag] results were confusing and I couldn’t see how I am supposed to [tag]make money[/tag] by covered calls.

This table was what I could see the other day and I didn’t get it.

Symbol Qty Cost Cost Total [tag]Market Price[/tag] Market Total [tag]Gain/Loss[/tag]
AFAM 100 $45.79 $4,579.00 $44.07 $4,407.00 -$172.00
.KQAAJ -1 $0.05 -$5.00 $2.0 -$200.00 -$195.00

These results were confusing and I wasn’t sure whether I did everything correctly or selected a correct [tag]option trade[/tag]. When you take a look at the trade I sold one [tag]call contract[/tag] for $0.05 and its price rose to $2 which created an [tag]unrealized loss[/tag]. I somehow could not see where the income should be generated from. I dug myself more into books and was searching what I was doing wrong. Suddenly I could spot it. I didn’t have to care what my Gain/Loss results were unless I was going to buy the option contract back. I am going for the [tag]premium[/tag] and then the option shall either expire worthless, so no gain or loss as seen in the last column in the table above will be realized, or the contract will be executed with no Gain/Loss as well. In this trade, the most important is the premium. I could see I chose wrong trade. I will collect only five [tag]dollar[/tag]s on this trade while the stock is showing a loss of $172. Quite bad result! I should choose a call contract with as high premium as possible and I do not have to care what the contract is doing during its life time.

To prove that I understand this correctly I opened more new trades the other day:

Trade #1

I selected AFAM again and I bought another 100 shares at $44.98

I sold 1 call January 2009 contract  .KQAAI of AFAM at [tag]strike price[/tag] $50.00 for $3.60 (now the premium should be $360.00; much better isn’t it?)

Trade #2

For this trade I selected a [tag]cheap stock[/tag]. Since I have to buy shares prior writing the call contract, why to spend too much money? I am thinking about trading [tag]stocks[/tag] within a price range 5.00 – 10.00 dollars.

I bought 100 [tag]Citigroup[/tag] [C] shares at $7.60
I sold 1 call January 2009 contract .CAI at strike price $9.00 for $0.47 (the premium should be $47.00)

Trade #3

I wanted to check how important it would be to select the proper [tag]OTM contract[/tag] and how close I could go to ITM level. So I selected the very first OTM contract:

I bought 100 Citigroup [C] shares at $7.60
I sold 1 call January 2009 contract .CAQ at strike price $7.50 for $1.05 ( the premium should be $105.00)

If my expectations are correct I should get $517.00 gross premium. If the market rises by that time so the stocks rise above or at the strike prices, shares will be sold and I should get some profit off of the stocks as well.

I will continue playing with the option trading on this virtual account for a while and I am planning to start trading real [tag]money[/tag] at the end of February 2009.


If you want to know, how my stock option trades are doing, click hereHello Suckers Feedto get regular updates.

Links:

$4.95 Trades + $.65 per Contract – Market or Limit, No Minimums. www.TradeKing.com

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TradingSolutions: Financial analysis and investment software that combines technical analysis with neural network and genetic algorithms.

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All Dividend Investing,  Options Trading,  Personal Finance
Posted by Martin December 15, 2008
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Stock option positions opened


Note: This is a [tag]virtual trade[/tag] for learning purposes.

This morning I have:
bought 100 AFAM @45.79, total [tag]market value[/tag] $4,579 and
sold 1 .KQAAJ @0.05, total market value -$5.00

I will write more about this [tag]trade[/tag] later.


If you want to know, how my stock option trades are doing, click hereHello Suckers Feedto get regular updates.

Links:

$4.95 Trades + $.65 per Contract – Market or Limit, No Minimums. www.TradeKing.com

Get The Wall Street Journal for 75% off!

TradingSolutions: Financial analysis and investment software that combines technical analysis with neural network and genetic algorithms.

Click Here to get 4 Bonus Weeks of Investor’s Business Daily Digital Edition!






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All Dividend Investing,  Options Trading,  Personal Finance
Posted by Martin December 14, 2008
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Stock options, the first kick off


As I said, I am not experienced in [tag]stock options[/tag] at all. I have never traded it, but I really want to. As many books or literature say [tag]options[/tag] can be a great [tag]source of income[/tag], among other [tag]strategies[/tag]. There are many option strategies, maybe hundreds or thousands of them. I am looking for only one: a [tag]strategy[/tag] which can provide me with a sustainable income, which I plan to reinvest back either into [tag]stock options[/tag] or [tag]stocks[/tag] themselves.
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All Dividend Investing,  Options Trading,  Personal Finance
Posted by Martin December 12, 2008
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Picks 12/08 – 12/12


No [tag]new picks[/tag].

There is nothing to buy out there.

Existing holdings:

100% CASH


Contribution this week: $0

Starting account value = $1,809.80

Account value = $1,809.80 (without margin)

Buying power = $1,809.80

[tag]Portfolio Gain/loss[/tag] this week = 0.00%

[tag]Portfolio[/tag] Gain/Loss for DECEMBER 2008 = 0.00%

Portfolio Gain/loss since inception = -19.19%

[tag]Annual Return[/tag] (CAGR): -19.19%

Now the portfolio is 100% cash, waiting for the new confirmed rally. I transferred all money to a savings account and I will be saving more money for the new upturn, study the market and wait.


Are you interested in Reverse Scale Strategy and see how it works when implemented to even a small account?

Stay updated with Hello Suckers Hello Suckers Feed

Links:

$4.95 Trades + $.65 per Contract – Market or Limit, No Minimums. www.TradeKing.com

Get The Wall Street Journal for 75% off!

TradingSolutions: Financial analysis and investment software that combines technical analysis with neural network and genetic algorithms.

Click Here to get 4 Bonus Weeks of Investor’s Business Daily Digital Edition!






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All Dividend Investing,  Options Trading,  Personal Finance
Posted by Martin December 11, 2008
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A bailout for automakers failed


Senators didn’t pass the [tag]loan[/tag] for automakers tonight, because [tag]UAW[/tag] didn’t accept lowering salaries of employees to the same level as Japanese [tag]automakers[/tag] in the US. The US [tag]manufacturers[/tag] have about $69/hour salary overhead per employee, Japanese producers manufacturing in the US are at about $48/hour level ([tag]Gross salary[/tag] with all [tag]benefits[/tag]). I have only a few thoughts regarding this situation:

1) UAW acts as stupids. They do not accept lowering company’s overhead to help the company in a [tag]crisis[/tag], which may potentially cause [tag]bankruptcy[/tag] of the company and a loss of all employees’ jobs.

2) No surprise that Japanese automakers are occupying a larger [tag]share[/tag] of the [tag]market[/tag]. With cheaper labor they can produce better cars for better price. If the US companies are not willing to do anything about it they deserve bankruptcy.

3) Tomorrow we may expect a great turbulence in the [tag]stock market[/tag], which may end up the rally attempt. Hold your hats, the roller coaster is speeding up.


Stay updated with Hello Suckers Hello Suckers Feed

Links:

$4.95 Trades + $.65 per Contract – Market or Limit, No Minimums. www.TradeKing.com

Get The Wall Street Journal for 75% off!

TradingSolutions: Financial analysis and investment software that combines technical analysis with neural network and genetic algorithms.

Click Here to get 4 Bonus Weeks of Investor’s Business Daily Digital Edition!






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All Dividend Investing,  Options Trading,  Personal Finance
Posted by Martin December 10, 2008
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Stock investing psychology

Stock investing psychology

During my learning period, even today I am experiencing one psychological trap every [tag]investor[/tag] probably went through and every new [tag]beginner investor[/tag] will experience. Some may handle this with a brilliance, some may suffer the similar way I do. I am talking about the psychology during [tag]investing[/tag] into a particular [tag]stock[/tag], which later, after you opened or closed a position, you may experience feelings involving double guessing the [tag]strategy[/tag].
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All Dividend Investing,  Options Trading,  Personal Finance
Posted by Martin December 08, 2008
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A new Rally Attempt in the stock market

A new Rally Attempt in the stock market

Today the [tag]stock market[/tag] provided impressive [tag]gains[/tag], which marked the status as “Rally Attempt”. It seems like the market has found its bottom. It could be a short live attempt however, and it still may fail. Recently the market hasn’t responded to bad news with further drops and it tried to rally three times in a short period row. It seems that the bull is eager to ride up and bring the end of this [tag]bear market[/tag]. It is said that the market has a predictive potential that it can predict improvement of the [tag]economy[/tag] (or worsening on the other hand) about six months ahead. Economists and market commentators speak about improvement during the first half of 2009 or at the half of the 2009. This rally may be the prediction of it.
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