"If you are going to be bearish and against this market, you are betting against the three richest people on the earth, Yellen, Draghi, and Kuroda," said market strategist, Ed Yardeni.
When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Bill Davis, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points. Read more
Global Market Comments
December 8, 2017
Fiat Lux
Featured Trade:
(A NOTE ON OPTIONS CALLED AWAY),
(BAC), (TLT), (FXE),
(THE TECHNOLOGY NIGHTMARE COMING TO YOUR CITY)
(TESTIMONIAL)
With the December 15 options expiration only five trading days away, we have the good fortune to have four profitable deep in-the-money options positions.
Those include:
The Bank of America (BAC) December, 2017 $25-$26.50 in-the-money vertical BULL CALL spread
The iShares Barclays 20+ Year Treasury Bond Fund (TLT) December, 2017 $129-$131 in-the-money vertical BEAR PUT Spread
The Currency Shares Euro Trust (FXE) December, 2017 $111-$113 in-the-money vertical BULL CALL spread
The Currency Shares Euro Trust (FXE) December, 2017 $116-$118 in-the-money vertical BEAR PUT spread
The probability is now high that all of these positions will expire at their maximum profit point and that you will close out December with another blockbuster month.
It is remotely possible that some of you may receive notices from your brokers over the next few days warning that your short call or short put positions may get called away.
Brokers have recently started doing this to avoid getting sued for failure to give notice, which they always do.
While it is theoretically possible that your in-the-money calls could get called away, it is highly unlikely.
Weird stuff happens on options expirations.
A call owner may need to cover a short position right at the close today and exercising his long calls (your short calls) is the only way to cover it.
There are thousands of algorithms out there, which may arrive at some twisted logic that the calls needs to be exercised.
And yes, calls get exercised by accident. There are still a few humans left in this market.
All of these fun and games happen right at the market close.
If you do receive such an exercise notice, take it as a gift. It means you don't have to wait until the expiration day to come out of you position with its maximum profit, you can exit RIGHT NOW.
When options owners exercise their positions before expiration day, they are giving up all of the premium in those options. That lost premium becomes your profit, as you are short.
If your calls or puts ARE called away, this is what you do.
Call your broker and tell him you want to exercise YOUR long calls or puts to meet the short position in your calls or puts. This is a perfect hedge.
This exercise process is now full automated at most brokers, but it never hurts to follow up with a phone call if you get an exercise notice. Mistakes do happen.
If any of you are the slightest bit worried or confused by all of this, come out of your position RIGHT NOW at a small profit! You should never be worried or confused about any position tying up YOUR money.
Professionals do these things all day long, and exercises become second nature, just another cost of doing business. If you do this long enough, eventually you get hit. I bet you don't.
Calling All Options!
Holly smokes! You really did it with the UNG trade earlier this year. Up 25% in two hours? How did you do that? It was the best trade you've ever done. It's the best trade I've ever done.
It was the right thing to do at the right time. And you had the balls to put it on after the (UNG) opened down a dollar. The follow up report was one of your best ever written as well. I will never again doubt your advice.
The next chicken fried steak at Billy Bob's is on me. Thanks a million!
George
Tampa, Florida
"Investing and investment is the one sphere of life where victory, security, and success are always to the minority and never to the majority. When you find anyone agreeing with you, change your mind," said the famous economist, John Maynard Keynes.
When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Bill Davis, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points. Read more
Global Market Comments
December 7, 2017
Fiat Lux
Featured Trade:
(MAD HEDGE WEBINAR Q&A FOR DECEMBER 6, 2017),
(NVDA), (TLT), (AAPL), (USO), (DAL), (XLK), (FXB), (M),
(WHY WARREN BUFFETT HATES GOLD),
(GLD), (GDX), (ABX)
