FAS / FAZ / Daily Discussions / Archives / 11-04-2011 / Tuesday June 7, 2011

Topie: Tuesday June 7, 2011
June 7th, 2011 07:37 AM
membar Nice premarket gap up for my variant of TSWSNBN (The Strategy Who Shall Not Be Named, formerly known as something Allen has banned us from saying.) I'm now at -5% on paper overall as opposed to -6% yesterday. I hope it holds up.

Gold is sneakily creeping up to its all-time high with no one noticing.
June 7th, 2011 08:16 AM
HeidiTwit Strange about gold, because my DUST paper trade is still up.
June 7th, 2011 11:10 AM
ISA_Coder AGQ i think is looking to bounce now, just hit a new low of the day just below 186, i've seen plenty of days like this with silver where it will bounce off the low and then go all the way back up to the high of the day, I'm hoping today is just like that.

remember, have those stops in place!
June 7th, 2011 11:29 AM
membar My TSWSNBN stop is 23.96. Still not stopped out yet.
June 7th, 2011 11:31 AM
membar
Quote:
ISA_Coder wrote:
AGQ i think is looking to bounce now

...

remember, have those stops in place!

Doh! My AGQ/ ZSL strategy is in ZSL! I looked at the chart and I think you're right. I think I'm going to get shredded.
June 7th, 2011 11:44 AM
ISA_Coder and there it starts to go....hoping for a steady climb in AGQ rest of the day
sorry to root against you membar but i gotta look out for number 1 :)
June 7th, 2011 11:49 AM
ISA_Coder ....or not heh heh
I'm out at 187.31, made just about 1%, done for today
June 7th, 2011 11:56 AM
BullDog My holdings, doing better today

F 13.96 +0.05 (0.36%) 53.02B
MO 27.24 -0.01 (-0.04%) 57.00B
COP 71.36 +0.44 (0.62%) 103.87B
GE 18.54 +0.08 (0.43%) 196.88B
AA 15.92 +0.31 (1.99%) 16.93B
T 30.39 +0.03 (0.10%) 179.97B
FAS 24.27 +0.50 (2.12%) 1.44B
JPM 41.08 +0.55 (1.36%) 163.24B
BAC 10.90 +0.07 (0.65%) 110.45B
C 38.01 -0.06 (-0.16%) 111.01B
DUK 18.49 +0.12 (0.65%) 24.62B
June 7th, 2011 12:09 PM
membar
Quote:
ISA_Coder wrote:
....or not heh heh
I'm out at 187.31, made just about 1%, done for today

Nice job. I still hope you're wrong, wrong, wrong.... :P
June 7th, 2011 12:11 PM
membar http://www.marketwatch.com/story/wall-streets-biggest-secret-2011-06-07
June 7th, 2011 12:13 PM
ISA_Coder
Quote:
membar wrote:

Nice job. I still hope you're wrong, wrong, wrong.... :P


well now that i'm out, i hope i'm wrong wrong wrong as well :) lets all win today!
June 7th, 2011 12:33 PM
BullDog Per article posted by Allen, it does not pay to take risk, but the reverse is true.
I am discovering that the hard way. I can clearly attest to that fact, if I look back 2 years.

I have to wait for FAS etc to go up. Then I'll adjust weight-age and add more to the less risky assets such as consumer staples.
June 7th, 2011 12:43 PM
BullDog Guys, what do u think about the following idea:
If you have cash available and were to buy FAS now at 24 and have the balls to hold. It is possible to earn $10 per share within 6 months?

Do the above in addition to isa quickies, membar xKos-es, Allen options, BugDog batch-Its.
June 7th, 2011 01:20 PM
membar
Quote:
membar wrote:
Doh! My AGQ/ ZSL strategy is in ZSL! I looked at the chart and I think you're right. I think I'm going to get shredded.

Ah, the sweet helplessness of a strategy trader watching himself get shredded and knowing that he has to stick to the strategy, otherwise he's not respecting the backtest....

Bulldog: sorry about your FAS tribulations. Your $10 things might work, unless it doesn't. This goes back to the directionality vs. volatility bets I talked about yesterday. Instead of buying a boatload of FAS, why not buy some OTM calls and puts several months out and cash in whatever jumps more than 50 to 100%? We all know it's going to happen - it baffles me why we haven't all started acting on this sooner.
June 7th, 2011 01:29 PM
BullDog membar - so u r saying, when FAS is low buy OTM calls 6 months out and when FAS is high buy OTM Puts 6 months out?
June 7th, 2011 01:37 PM
membar
Quote:
BullDog wrote:
membar - so u r saying, when FAS is low buy OTM calls 6 months out and when FAS is high buy OTM Puts 6 months out?

No. I'm saying forget trying to guess direction and no matter where FAS is, draw a line in the sand and buy both OTM puts and calls, then wait for one of the two to go up 150% or more, then sell and rebalance or keep holding the other in case of a reversion.

Another variant would be to buy equal amounts of ITM puts and calls with the current strike price if you want to be more resistant to the options decay.

I haven't backtested any of this, which is why I haven't started doing it.

June 7th, 2011 01:51 PM
BullDog suggestions:
ITM - good idea for stock replacement strategy
150 % is $12 at current price. Might be a bit too high.
FAS moves between 18 ish to 35 ish, more likely between 20 ish to 30 ish. So why not use this to only to buy either Puts or calls, instead of both together.
For example if u buy Puts now, might be difficult to get another $12 down.
June 7th, 2011 01:56 PM
ISA_Coder
Quote:
ISA_Coder wrote:
i've seen plenty of days like this with silver where it will bounce off the low and then go all the way back up to the high of the day, I'm hoping today is just like that.



lucky guess i suppose
June 7th, 2011 02:05 PM
ISA_Coder
Quote:
BullDog wrote:
Guys, what do u think about the following idea:
If you have cash available and were to buy FAS now at 24 and have the balls to hold. It is possible to earn $10 per share within 6 months?


The biggest problem that i have with an idea like this is that 10$ is completely arbitrary (or so it would seem). I hate to say it but I feel that most people who trade these ETF's always lose site that they move strictly based off of percentages and not dollar amounts. Would you have chosed 10$ if the price was at 18 also? One would think that if FAS went down to 18 that it's a better "price" to buy right?....wrong, fact is that it does not matter at all the current price of these ETF's, all that matters is how much the underlying index is going to move.

For example:
@ 24$, a 10$ increase is 41.666% increase
@ 18$, a 10$ increase is 55.555% increase

see where i'm going with this?
Just trying to help others, not trying to put anyone down. These are fundamentals about leveraged ETF's that I feel ABSOLUTELY need to be understood in order to make smart decisions in trading leveraged ETF's.

Quote:
BullDog wrote:
Do the above in addition to isa quickies, membar xKos-es, Allen options, BugDog batch-Its.


I like this :)
June 7th, 2011 02:14 PM
membar
Quote:
BullDog wrote:
suggestions:
150 % is $12 at current price. Might be a bit too high.

I'm talking about the price of the option, not the price of the underlying (FAS). 150% movement of an option price is routine. When AGQ tanked, I bought it for something like $21, sold it at $33 and it went all the way to $98 or something like that. That's almost 500%.
June 7th, 2011 02:15 PM
membar
Quote:
membar wrote:
When AGQ tanked, I bought it...

"it" meaning the $250 September put
June 7th, 2011 02:18 PM
membar
Quote:
membar wrote:
Ah, the sweet helplessness of a strategy trader watching himself get shredded and knowing that he has to stick to the strategy, otherwise he's not respecting the backtest....

Stopped out of ZSL. Now in AGQ (and slightly under water).
June 7th, 2011 03:24 PM
BullDog All stops getting blown off, sorry
June 7th, 2011 03:49 PM
membar
Quote:
BullDog wrote:
All stops getting blown off, sorry

It's all just a giant casino anyway.
June 7th, 2011 04:00 PM
membar
Quote:
membar wrote:
Nice premarket gap up for my variant of TSWSNBN (The Strategy Who Shall Not Be Named, formerly known as something Allen has banned us from saying.) I'm now at -5% on paper overall as opposed to -6% yesterday. I hope it holds up.

Out at 23.96, back in at 23.79.