Weekly Newsletter   Challenge account

Posted by Martin September 09, 2016


Will Yellen raise rates? We do not know but sell everything, just in case

Will Yellen raise rates? We do not know but sell everything, just in case

Friday trading was a carnage. I consider this quite funny.

Since FED’s chairman changed the policy of transparency some time ago now any Mr. Fed Unimportant can talk about FED policy publicly.

But what they do is not expressing the policy or what FED will do or will not, they rather express their opinions. Any Fed’s Governor, President of the Fed’s bank can now open their mouth and say whatever they want.

Unfortunately, their opinions, speculations, and guesses caused more confusion and frustration among investors and the entire world than transparency.

We now have an even bigger mess and noise of what will, should or may happen as far as the Fed’s policy. And so any Fed’s schmuck now-a-days even a Fed’s janitor can express his opinion about Fed’s policy and spook the markets as happened today morning when one Fed official Eric S. Rosengren, who was historically dovish suddenly changed his mind and expressed his opinion on the low rates and a need on raising them.


Yet, they are not united themselves on what they want to do. One says raise the rates and two others oppose it.

And, as is typical, in the today’s stock market, investors without judging and thinking sold off. They do not know whether the rates would go up or not. There is no sign and there is no economical need for it. It will actually hurt the economy. Yet they sold off.

And they sold everything.

There was no instrument which was saved or spared.


They were rushing into bonds which bear even less interest than what you can get in the stocks. And the more they are buying the bonds and pushing them up the lower interest these bonds will carry. And when FED raises rates, what happens to the bonds?

Indexes fell about 2.5% in average.
Gold erased about 3/4 of a per cent.
Silver lost 2.78%.

There is no way Yellen would raise rates before election in November and disrupt the whole world and the markets.

We know that Yellen wants to keep the market going so the Obama Administration can boast about it.

We know that Democrats want to make Clinton’s chance great pointing to Obama’s policy continuation.

We know that economy isn’t as rosy as they try to tell us. Until today, higher interest rates were always used as a breaker for overheating the economy.

Today, low rates are supposedly overheating the economy. Yellen was dovish, hawkish, dovish, hawkish, dovish… always saying that she was data dependent. If data is what matters, then apparently only data which matter to her are a bogus unemployment rate and stock market at all time high.

Last time when Yellen raised rates into slowing economy, the dollar got stronger (which hurts our already minuscule export) and the stock market plummeted. She wouldn’t risk upsetting the market again before election!

And investors apparently freak about it.

At least we can see an action on Wall Street, finally.

Many are taking gains of the table prior to election. I think if Trump wins, Democrats let the bubble burst so they can point finger on him telling the nation “see we told you so, he can’t manage the economy”. And there will be plenty of people who will believe it.

As of now the market dropped more than 2.40% in an uninterrupted downtrend. There was no single buying attempt to stop this selloff.


It is significant because the Bollinger Bands were quite tight until today for a period of a month. That always signals a calm before a storm. It only won’t tell you which direction the storm is heading. Today, we know. It is downside.

Now, we need to wait and see if it spills over into the next week (and I think this will) and how big the damage will be.

However, I think that due to a political demand on keeping the economy look rosy this downtrend will not last for long (maybe a few days or next week) and we will see a quick recovery again when bargain hunters and algos step in and buy the dip. Ultimately, this may be good for the markets as it refreshes the standing waters of our Wall Street pond.

Now the goal is to survive it and if it doesn’t reverse be ready to reverse your trading direction from bullish to bearish. I do not think this will be necessary though.

We all want to hear your opinion on the article above:

August 2016 trading, investing, and dividends results

August was a bit slow and my investments stalled. Many of my trades turned against me and I had to wait longer for them to end or expire than expected.

However, I expected August to be slow due to consolidating my trading. In July I made an all time high revenue when I pocketed $5,734.00 dollars in premiums. But such trading was a stretch as my account was not yet big enough to achieve such level of collected premiums. I was taking riskier trades, more trades than my money management allowed, and at several times during July I didn’t feel comfortable with my extended trading. The collected premium was nice but I didn’t like the way I did go for it.

In August I didn’t want to trade that way and I wanted to have my trades easy. I wanted to trade and feel comfortable with my trading. I think, I was successful with that plan in August although I had a few trades which made me uncomfortable. I still have too many trades open, in the money, and unable to get rid of them. I need to find a strategy how to prevent this situation and how to end my trades faster without taking a loss. So, in September, I will be working on consolidating my account, lowering the amount of trades open and improve my money and trade management.

In August, I made $2,528.00 in premiums trading options. It is however well below my original expectations as I planned on reaching at least $3,000 premiums this month. For September I am thus adjusting my expectations down and plan on making $3,000 in premiums.

August is a weak month in my dividend portfolio. My dividend income this month was lower than in July. But it was bigger than other weak months such as May and February. The dividend income this month was $59.16 vs. $86.21 last month.

Options Income = $2,528.00 (account value = $10,270.17 +304.38%)
Dividend Income = $59.16 (account value = $19,997.26 +32.08%)

If you wish to see details about each account, continue reading below.


You may be interested in:

Options Trade – Sold a Put in VOD By ADY with Average Dividend Yield

Dividend Update Preview – August 2016 Infographic By PIP with Passive Income Pursuit

The Next Big Rush – Getting Properly Educated in Mining Stocks By FI FIGHTER with FI FIGHTER

Cash Secured Put – Valero Energy By Will with Investment Hunting

Rolled Sept TLT Covered Puts By Alex with My Trader’s Journal

OAP 059: Short Strangle Case Study – Adjustment Strategy That Slashed Our Loss By 87% By Kirk Du Plessis with Option Alpha



Read More

We all want to hear your opinion on the article above:

Posted by Barney Whistance August 31, 2016
No Comments


Why an economic revolution is appealing to the US

To a lot of mainstream media, Bernie’s victory is just what it might appear to be: a one off without too much significance. But the ones propagating that message are the ones refusing to recognize a deeper reality of American politics that Bernie is effectively trying to counter. As a few sources say, though, Bernie’s appeal does not lie in upheaving politics but the way the US society works as a whole. Even now a lot of us have trouble understanding the rhetoric that Bernie is employing and it might help if we take a basic look down at a few things.

First of all, there is little doubt surrounding the fact that the US is in one of its worst financial eras and while there are plenty of ways in which the reasons for that can be discussed, it validation is without question. Despite Obama’s efforts, the college fees keep going up and loan figures keep increasing. Employment still is a question mark for many enterprising graduates whilst healthcare is still a contesting point. Bernie’s rhetoric for removing wealth from the “1%” seems idle at times but it’s important to note that it is not without its reasons.


 · Tax returns


One thing that many Americans misunderstand is the impact of the tax. Economically, it makes sense that your welfare and other government duties are pretty much carried out through effective tax collections. The current debate is whether those tax figures should go up or not. An effective plan would detail how that tax allocation is supposed to help and we will discuss that length a bit further. The problem is being unanimous about increased taxes. Though Americans agree that the government needs to be more active in healthcare and education, they are unwilling to give further taxes to have that.

The argument is not entirely without reason. If the government is supposed to give basic needs such as healthcare and education on taxes then it should do so without charging taxes that are astronomical. Unfortunately what many fail to realize is that tax collection becomes correspondent to the income of the people within the country. Without getting into the complicated economics of it, when the wealth concentrates amongst too few a number of people, the tax collection becomes steeper if it’s uniform. Even with a constant rate for income, it becomes impractical to keep collecting taxes and expecting the same level of return by the government.


 · Education and healthcare


This is the critical aspect of the US society currently. You know why there is an anti-immigration sentiment in the US because the narrative of “they’re out to steal your jobs” is running rampant. Interesting to note that this narrative would not exist if unemployment was not as high as it has become so you cannot ignore the problem. The issue is that the singular narrative fixates the problem on the wrong root. It is a no brainer that as education becomes more expensive in the US, the employment rate within the locals is steadily declining. Remember how we talk about the need for the middle class to exist otherwise, the country slides down the developing country’s line of growth.  That is the danger that modern America faces.

The effect is easy to see: tuition becomes more expensive so the unemployment rises and debt figures subsequently rise for those who are trying to get themselves a college degree. A new policy that seeks to make education more affordable is obviously a welcome gesture but for it to succeed, the people must also understand the narrative of why higher skilled workforce requires better education.

Similarly, with healthcare, there is this void that needs to be filled due to the polarizing views surrounding Obamacare. Even though figure wise the policy has done well around the country, there is the need to invest further in healthcare around the US.


 · In simple terms


A lot of factors surrounding the US can be boiled down and linked to its economic conditions. The whole need of redistributing wealth around the middle class has become a rallying cry amongst political activists and yet the pragmatic agree that a policy that includes more Americans in the educational process is vital for the US’s economy to become healthy again. Unfortunately, such efforts will always be in vain unless an active effort on rehabilitating student loans and decreasing the tuition fees is made.

We all want to hear your opinion on the article above:
No Comments

Posted by Barney Whistance August 23, 2016
No Comments


ESOPs Create Wealth and Encourage Job Dedication for Millions of U.S. Employees

ESOPs Create Wealth and Encourage Job Dedication for Millions of U.S. Employees

ESOPs Create Wealth and Encourage Job Dedication for Millions of U.S. Employees

Image Source

In the U.S. there are an estimated 10,000+ Employee Stock Ownership Plans, or ESOPs, making business owners out of some 11 million employees. Not only do these companies tend to outperform other comparable companies that aren’t employee-owned, but their workers are able to build up retirement savings at rates far surpassing the national averages.


 · Just ask Aaron King

King is a 60-year-old truck driver for Lowell, Arkansas-based Central States Manufacturing Company. In the 23 years he’s been driving for the Central States he’s seen the company steadily weather the recession, grow rapidly, and become solidly profitable for its employees. Additionally, King’s been able to save up about $1.25 million in his company retirement account.

Because of the ESOP model, and desire to maximize profits, King, known as the millionaire truck driver, has observed that much of the common wasteful and dangerous behavior is minimized by employee self-policing. “We hold one another accountable,” he says. “Somebody leaving a bundle of metal where it could be run over – a $3,000 bundle – we go and get the guy and talk to him. It’s going to come out of all our paychecks.”

Another employee at the Central States, 33-year-old production supervisor Marcus Hedrick, has worked with the company since he was 17. He’s already amassed $250,000 and is well on his way to an Aron King-like early retirement. Hedrick says of his friends doing similar work, “most of them don’t have anything for retirement.”

Central States’ open-book management approach does more than just turn workers into owners, “We teach people to be business people – what capitalism is,” says Rick Carpenter, chairman and former majority owner of Central States.

Business models like these and employee-owner stories like King and Hedrick prove that the so-called “retirement crisis” in America is manageable – if companies are willing to profit-share with their employees. However, what it will also take is a collective interest in making businesses benefit everyone long-term – including the employees.

Lakeland, Florida-based Publix Super Markets, a well-known grocery store chain and the largest employee-owned company in the world is far surpassing their competitors by creating a corporate culture of respect and advancement from within. With an annual voluntary turnover rate of only 5% – they are certainly doing something right.

ESOPs are the answer to our country’s retirement woes and can help fight high turnover in industries known for their quickly burnt out employees. The trucking firms are good candidates because employee turnover at some firms is as high as 100% – well above the national average of 16.4 percent across industries.

When employee-owners have a say in important company decisions, like whether to open a new store or close an underperforming branch, or even whether to purchase used trucks or new for their transportation needs, they feel more engaged and connected to the day-to-day workings of the business and more dedicated to their jobs and missions.

We all want to hear your opinion on the article above:
No Comments

Posted by Martin August 21, 2016


What is a rationale behind trading Jade Lizards and trade management?

Jade LizardJade lizard is a popular strategy yet not so very known among traders. I myself learned about this strategy just about a month ago although Tasty Trade performed studies on this strategy in 2013. But after I studied the strategy, I immediately fell in love with the strategy for benefits it provided.

If you have never heard about Jade lizard strategy, here is a quick review:

A Jade lizard consists of a short, naked OTM put and an OTM bear call spread. Let’s say, you want to trade this strategy against WYNN, then it would look like this:

Jade Lizard trade

In the example above I am selling 95 strike naked put and at the same time, selling 98/98.5 bear call spread.

 · When do you put on this trade?

  • This trade works best with high Implied volatility.
  • The stock was beaten down recently

  • It’s OK to trade this strategy during low IV if the premium is high enough to justify the trade.

 · Why to trade Jade Lizards?

There are a few benefits for trading Jade lizards compared to naked put trade only:

  • You collect higher premium
    Collecting higher premium does twofold service to you – it lowers your breakeven price on your put side, more than a naked put, and you get more money if the trade ends as a winner.
    If you take a look at the option chain above, you can see that opening a naked put only I would collect $4.10 premium while with the Jade Lizard I can collect $4.45 premium (+8.54% better result).

 · How to trade Jade Lizards?

When placing Jade Lizard on you must make sure that your collected premium is larger than the entire call spread width. If for example, you trade a lizard, your call spread is $1.00 wide and you collect $0.95 premium only, then such trade is bad and will not work.

If your call spread is 1 dollar wide, it means that you can realize 1 dollar loss on your call side (or $100 total loss). You want to collect at least 1.00 dollar premium or more to cover your upside.

In the example above I can collect 4.45 premium. My call side is only 0.50 wide. The call side is literally risk free. Even if the bear call spread gets in the money, I still will end up profitable.



 · How to manage Jade Lizards?

When I open a Jade Lizard trade I usually place a closing order right after the trade fill for 50% credit. So ideally, we want the trade to end as soon as possible for 50% of collected premium. It would look like this compared to a naked put only:

WYNN naked put trade opening for 4.10 credit, closing for 2.05 debit, 2.05 credit left
WYNN Jade lizard trade opening for 4.45 credit, closing for 2.225 debit, 2.225 credit left (+8.54% better result)

Let’s take a look at different situations which may occur:


Stock trades in between short put and short call


50% credit management: You do not have to do anything as both your puts and calls will be losing value and you will be able to close the trade for 50% credit (+8.54% better result).

At expiration: You do not have to do anything. All your options legs will expire worthless and you will collect full credit profit (+8.54% better result).

Assignment risk: There is no early assignment risk in this situation.


Stock trades in between short call and long call


50% credit management: You do not have to do anything. Your puts will be losing value and although your call spread short leg will be in the money, you will be able to close the trade for 50% credit (+8.54% better result).

At expiration: You let your puts expire worthless. Close your bear call spread. You will realize loss on your calls which will equal to the amount of how much the spread is in the money. If the stock ends at $98.30 for example, it is 0.30 in the money and you will see $30 dollars loss. Your overall trade will be $4.15 profit (4.45 – 0.30 = 4.15) or 1.21% better than naked puts only. You want to close the spread manually to avoid assignment fees which are usually high.

Assignment risk: There is no early assignment risk in this situation. No one would ever early assign an at the money option. A risk of assignment at expiration is avoided by closing the spread.


Stock trades above your call spread


50% credit management: You do not have to do anything. Your puts will be losing value and although your call spread will be in the money, you will be able to close the trade for 50% credit (+8.54% better result).

At expiration: You let your puts expire worthless. Close your bear call spread. You will realize loss on your calls which will equal to the amount of the spread width. In our example, it is 0.50 or $50 dollars loss (98.5 – 98 = 0.50). Your overall trade will be $3.95 profit (4.45 – 0.50 = 3.95) or -3.66% worse than naked puts only. You want to close the spread manually to avoid assignment fees which are usually high.

Assignment risk: There is no early assignment risk in this situation if the stock is trading fairly close to your spread. If however early assignment happens, then exercise your long call to cover your short stock. Your overall loss will still equal to the width of the spread. A risk of assignment at expiration is avoided by closing the spread.


Stock trades below your puts


50% credit management: You still may be able to get out of this trade for a profit by closing it early before gamma kicks in. Generally, however, you won’t be able to do much and the trade will stay open until expiration.

At expiration: You let your call spread expire worthless. Roll your in the money put into the next month and at the same time sell a new call spread against it creating a new jade lizard. Based on where the stock is if at the money but still in the money then roll into the same strike, if deep in the money then roll to a lower strike.

Assignment risk: There is no early assignment risk in this situation if the stock is trading fairly close to your naked put. Again no one would ever exercise at the money put. If the stock sinks too deep and an early assignment happens, then keep the stock and start selling covered calls. A risk of assignment at expiration is avoided by rolling the put away in time.

 · Conclusion

If you follow my blog and read regularly you may know that I do not predict the market or stock move. I believe it is a futile work to try predicting the market. Instead of predicting what your stock will do next, make a plan what you will do next.

Above, I tried to show you what everything can happen with a trade once you put it on and my plan what I would do with it. It is all you need to know. You need to know answers to all those situations before you place a trade.

Once you place a trade and know all the steps you would do, you will be trading with ease and in a comfort zone. You will no longer be worried what would happen with the stock. You will no longer be worried if you open a trade and you will be wrong and the stock tanks.

It is because no matter what happens you have a trading plan for that situation and you know what to do to make that trade still a winning trade.

And then it all comes to your money management instead. You do all these trades and trade adjustments without over-trading your account. If you keep enough cash reserve in your account then you do not have to worry about your margin, early assignment, or anything what jumps on you.

If you over-trade, however, you will not be allowed to do anything with your trade, you will see a margin call, and you will be forced closing your positions at a loss. And you do not want that.

We all want to hear your opinion on the article above:

Posted by Martin August 21, 2016
No Comments


Option Trader Interview

About a month ago I participated on a series of traders interviews on Amber Tree Leaves blog. I read all of them so far and I was pleased to see other investors and traders involved in options trading. I consider options as a great investing vehicle and excellent tool to supercharge your results. But it must be done right. If you do not trade options properly they can hurt you a lot.

Amber Tree Leaves

Speculation is not what you want to be involved, but consistent step by step trading, small at first, larger later, is what you want. If you start speculating, predicting, betting, then you start gambling and lose money.

I have seen people, my friends – traders, spending hours drawing charts, predicting the next move and convincing themselves that the stock or market was overbought or oversold and then “next week it definitely must reverse” and placing their bets against the market/stock. They lost money.

Trading is not about speculating and predicting the market. Trading is about being aware of what’s going on and being able to adjust and manage your trade accordingly.

Since no one can ever predict the future how do you deal with a trade? That is your goal to make a trading plan which answers this question for you.

I advocate on this blog, that you shouldn’t be predicting and trying to know what the stock or market will do next, but what YOU will do next.

This took me a long time to finally understand. But once you get it, your trading becomes easy, smooth, and consistent. This was my “aha” moment. Since then, I trade with an incredible ease knowing that I do not have to be always right to have winning consistent trades.

Continue reading the interview on Amber Tree Leaves >>>

We all want to hear your opinion on the article above:
No Comments

July 2016 trading, investing, and dividends results

When I finished June with $2,331.00 income I thought “that was it!” It was a great income and I haven’t expected that I could ever exceed it. I hoped, I could beat it by a thousand and finish July 2016 month at around $3,000 dollar income.

But by July 10 my account was making $2 dollars. Yes, I was making just two dollars and I was thinking what would I do when I start trading for a living and make only two dollars? Will two bucks pay my bills? So I was comforting myself saying that it would be OK to make less in July. That’s why I do not withdraw all I make but only 20% until I reach 1$0,000 monthly income when I start withdrawing 50%. So, if I make less in one month I still will be ahead.

But then it all started coming together and I made even more than in June. I made $5,734.00 in July in premiums trading options!

My dividend income this month was also higher than in June. It was actually the highest month I ever had. The dividend income was $86.21 vs. $81.68 last month.

Options Income = $5,734.00 (account value = $10,124.81 +293.04%)
Dividend Income = $86.21 (account value = $20,596.08 +36.04%)

If you wish to see details about each account, continue reading below.


You may be interested in:

August 2016 Stock Considerations By Keith with DivHut

Promising Canadian Aristocrats Companies By Mike with The Div Guy

8 Inexpensive Marketing Tools To Transform to a Business Owner By OCT with One Cent at a Time

Let your winners ride and your losers wither By Integrator with Get Financially Integrated



Read More

We all want to hear your opinion on the article above:

Development of Digital Technologies to Transform Trade and Investments

Development of Digital Technologies to Transform Trade and Investments

With the spread of digital technologies and innovation, it is transforming and changing the traditional dynamics of the stock exchange market as well as the flow of goods, services, investments, money and people. Digital trade is now on the verge to become an essential component in the global flow between international markets. As such technologies give a boost to digital trade as it grows at a fast pace and is asserting new forms to facilitate ways to measure through the development of new customized apps and online platforms for the purposes of production, exchange flow and consumption.

Development of Digital Technologies to Transform Trade and Investments

Image Source


More and more large and small companies, as well as entrepreneurs, retailers and consumers are largely affected by such fast-paced developments and constitute opportunities as well as challenges. The rapid transformation of the traditional methods to digital platforms enhances businesses, trade and investment and means of communication which could leverage data security, measurement, and growth.

This blog further explains the use of digital technologies and online platforms to give businesses a global reach to enable digital flows of online money transfers, trade flows, and cross-border e-commerce.


The Dynamism of Digital Platforms

Though the transformation towards more digital savvy forms of communication is in its earliest stages, more people are becoming more instantaneous to globally engage with one another. For example, more industrial development is being done on the basis on 3D printing for certain manufacturing parts and equipment in the form of physical objects. As the internet expands, the traditional and outdated forms to conduct businesses across border begin to fade away.


The Dynamism of Digital Platforms

Image Source

There is no doubt that digitization has lowered the prices in marginal production and distribution costs and given accessibility to global commerce. The cost reductions have occurred in trade, not just for large companies but for small entrepreneurial projects as well. Spurring financial innovations have taken place in light of newly developed apps, social media accessibility, and micro-multinationals and micro supply chains are now able to tap into global opportunities.


The Ability to Monitor, Forecast and Manage Objects Digitally

Digitalization has greatly influenced and transformed logistics, retailer management, and supply chain networks. Companies can now collect and track information about a transaction, product, place or time. With operating efficiency increasing in contrast with cost spending, many other industries in the stock market like oil and gas companies, automobile, telecommunication, IT sectors etc. are now seeing the payoff in their operations with the help of digitally savvy platforms. With digitally monitoring machines in the office, business owners or supervisors can track the progress of their shipment order, parcels, and containers as digital technologies help companies to get further ahead out of their physical confinements.


The Ability to Monitor, Forecast and Manage Objects Digitally

Image Source

The External Factors

There are further implications for the future of trade and investment in order to survive in the emerging markets. Soon, governments too would be forced to adapt to new innovations and deal with the upsurge in digitalization of trade and investments. Policymakers would address and be able to forecast sensitive issues beforehand. Trade agreements would be on the basis of the cross-border flow of data and communication. People, retailers, stock market intelligence would use digital and mobile connections to share ideas, communicate and collaborate to make business to business relations and social connections. An entrepreneur would easily make a product and use a patented idea to sell it globally thus digital platforms would enable a whole new array of revenue streamlines. This would also mean the more people would get the opportunity to outsource online platforms and businesses would start up with less up-front investment and scale up much quickly. Thus the development of digital platforms would strengthen global trade and investment opportunities and generate strategic analysis and recommendations for the stock market as well.

We all want to hear your opinion on the article above:
No Comments

Posted by Martin July 29, 2016
No Comments


$WYNN beat estimates yet gave me a headache

Today, I feel bitter about my WYNN trade.

Last week I decided to take a few trades against WYNN and stretch my account a bit because I was confident that I would be out of those trades before earnings. It was a great opportunity trade!

Brokers were listing that WYNN was going to report earnings on August 3rd. Put premiums were juicy and all set to expire this Friday. I would collect nice premium before earnings.

So I opened three trades and sold 3 put contracts per each trade (total 9 contracts):

-3 WYNN Sep2 87 put
-3 WYNN Jul29 96 put
-3 WYNN Jul29 97.5 put

Suddenly the company announced that they would report on July 28 end of the trading day. Ouch! Suddenly I was holding trades thru earnings!

Spooked Trader

I knew (expected) that WYNN would report great results but I wasn’t sure how would market react. Today, the market is driven by a crowd of morons. Crowd is stupid and primitive. It can get spooked by falling leaves from the tree in autumn and stampede for exit.

And sure enough. WYNN sold off after hours. It fell from 104 a share to 96 a share. I had a problem.

I had to manage those trades, but since I expected them to expire without being jeopardized by earnings I stretched my account and I was running low on cash. My account ran out of buying power at some point and that meant I couldn’t roll the trades. All I could do was close trades. And closing trades meant closing at a loss!

I had to day-trade and use market fluctuations to adjust the trades. I was successful doing it and I could close majority of the trades and roll two contracts into next week.

Although I closed those trades with profits, moved the last two contracts away in time into the next week I still have a “bad taste in my mouth”.

Below is my journal indicating all trades I made this week and today with WYNN to maneuver it out of a problem:

WYNN trading journal
Click to enlarge

This month, I was able to exceed all my expectation about my trading revenue.

Last month, I made $2,331.00 in collected premiums. I haven’t expected exceeding this number. I hoped for $3,000 revenue at best or at least matching June, mainly when for the first 10 days of July all I made was $2 dollars. Yes, two dollars.

I was thinking that this could be a blow to my plans trading for a living one day. I can’t live off of 2 bucks!

Yet, in July 2016, I made $5,734.00 dollars in collected premiums. This is more that what I make at my 9-5 job working 45 hours a week and having to deal with my boss and unreasonable clients!

But if WYNN ended as planned before they announced earnings reporting in July instead of August 3rd, I would end with premiums way over $6,000 dollars for the month. Maybe this is why I feel horrible.

And that’s wrong. This is emotions. Greed. Emotionally greedy. The best way to lose it all. I think I need to slow down. Yes the revenue for this month is gorgeous, but I stretched my account beyond all my rules. I acted like an idiot. Preach water, drink wine.

Now I will focus more on managing open trades and slow down in opening new trades to only one or two trades per week and considering all rolls as a new trade for that week. I also need someone to slap my hands when I get itchy trying to open a new trade because of an “irresistible one time opportunity right now” feeling. No way grasshopper, there will always be opportunities in Wall Street, no need to rush to all of them.

And the lesson? Even if a trade looks to be the safest trade on the planet, it doesn’t warrant breaking the rules.

Good luck guys and have an excellent weekend!

We all want to hear your opinion on the article above:
No Comments

How Billionth iPhone Sale May Not Be That Great for Apple

As Apple (NASDAQ: AAPL)reported its financial results for the third quarter of its fiscal 2016, it was also celebrating hitting a key milestone with its flagship iPhone. Its sales topped one billion this month.

While it celebrated that monumental news, the market was digesting something that was unheard of when it comes to Apple – a downgrade. The reason for the downgrade explains many of the concerns some market players are increasingly griping about more.

Before we get into the reasons behind that downgrade, let’s start with the good news first. That news stems from Apple’s earnings report that it released and discussed this week.

Apple posted quarterly revenue of $42.4 billion and quarterly net income of $7.8 billion. That equated to $1.42 per share. These results compare to revenue of $49.6 billion and net income of $10.7 billion, or $1.85 per share in the same quarter of fiscal 2015.

Its gross margin weakened a bit to 38% from 39.7% in the second quarter of fiscal 2015. Of note are Apple’s international sales, which accounted for 63% of the quarter’s revenue.

Apple’s services business segment grew 19% year over year. Its revenue from its app store also grew. In fact, it was the highest it has ever been.

 · Shareholder value

Apple has been notorious for sitting on piles of cash, as it raked in even more of it from record sales of its iPhone and iPad. Shareholders grew increasingly frustrated with that. In what could be seen as the extension of an olive branch, Apple began paying shareholders dividends in 2012. That put to an end a drought of Apple dividend payouts that reached back to 1995.

Apple has also stepped up its share buyback program over the past few years. However, not all are positive on these repurchases. Earlier this year, Fortune said the company had wasted billions of dollars in buying back its stock.

Fortune found that Apple had paid a 21% premium over the value investors were paying for its stock when it was trading around $95. It closed Wednesday, the day of Apple’s third quarter release, around $104.

BGC Partners, the firm that downgraded Apple, found that Apple’s share repurchases over the last six quarters have all occurred at higher average prices than where the stock is currently trading. The stock has lost approximately $235 billion in value while repurchasing $117 billion is shares, according to BGC.

No matter, Apple’s CFO told investors this week that the company returned more than $13 billion to investors through share repurchases and dividends.

Furthermore, he said the company has completed almost $177 billion of its $250 billion capital return program.

Apple provided the following guidance for its fiscal 2016 fourth quarter:
• revenue between $45.5 billion and $47.5 billion
• gross margin between 37.5% and 38%
• operating expenses between $6.05 billion and $6.15 billion

The $.57 dividend declared by the company is payable on August 11.

 · The downgrade

BGC downgraded Apple ahead of its earnings report release. The firm cut its rating to “sell” from “hold.” It also cut its price target to $85 from $110.
The reason for the downgrade stemmed concerns that the upcoming iPhone 7 won’t sale as well as the current iPhone SE model in the market now.

The whole “cool factor” thing that propelled iPhone sales in the past may not be “cool” to investors anymore. Yes, it’s great that the new generation phone may have new features that outshine previous models. However, it won’t have those infamous subsidies that made the previous phones attractive, AND affordable.

You may recall the wireless carriers constantly promoting free phones, or heavily discounted phones to attract customers to sign lengthy contracts with them. That practice began to go by the wayside as consumers began to opt for pay-as-you go plans. Many wireless carriers did away with the subsidies, and the like. This meant customers have had to absorb the full price of the phone.

In the minds of many consumers, it is ridiculous and economically foolish, to
shell out $600 on a new phone every few years.

So while Apple pats itself on the back for selling one billion of the phones, it is highly unlikely that it will reach that number within the same time frame in the future.

To BGC’s point, I too believe that Apple must step up its acquisitions. Its buy of a karaoke company of sorts drew laughs among market players this week. That announcement came on the heels of Soft Bank’s revealing that it is acquiring ARM Holdings for $32 billion.
This should have been a company Apple should have gone after to buy.

According to BGC’s note:
Apple acquiring ARM could make so much sense, it’s a high margin business with future growth, plus there is a national security interest benefit. It positions Apple for the growing IoT (Internet of Things) market. So disappointing! Perhaps management was focused on how to remove headphone jacks.

Clearly, all is not loss for Apple. Its resilience is fascinating. Just look at its high revenues despite the drop in its iPhone sales.

The key for the company stock moving forward does not just hinge on iPhone sales. The company must move big in acquiring something Big. While share buybacks generate some investor satisfaction, the programs don’t cause a stock to move higher.

We all want to hear your opinion on the article above:
No Comments

This site has been fine-tuned by 14 WordPress Tweaks