OptionPundit

Tag: POT

  • OPNewsletter (Aug’08) : +3.0% (Open)

    Another profitable week for OPNewsletter; both for income as well as speculative directional trades. Even though we increased out investment by 17% (to 48.3%) since last week, our returns also increased from +1.24% to +3.06% this week (including commissions). Considering what happened in the broader markets past week, I am pleased with these results. On a big picture basis, we didn’t make any significant adjustments to any of the portfolios since opening. No adjustment are expected for any portfolios till next week too.

    Other then income portfolio, all the directional trades also proved money maker with exception on ISRG intra-day. AMZN and AAPL both delivered > +20% for 1 day holding periods. POT 230 Put directional calendar is also profitable. In fact I shared a list of expected “Big Movers” that I was analyzing and POT, AMZN, WFR, AAPL, CMG, BIDU and many more moved huge %.

    Few testimonials from OPN current subscribers-

    I have been an OP Newsletter subscriber for about 3 months. I’ve been trading options for 2 years.

    I am extremely Happy with my subscription. I have taken most of OP’s suggested Income Strategy trades and they have been overwhelmingly profitable. The ones I did not take, due to travel or just plain second guessing, ultimately turned out to be profitable as well. LOL.
    Most of the spec trades that I’ve taken have been overwhelmingly profitable as well.

    OPN differs from other Newsletters in that OP provides timely, suggested adjustments for his Income Strategy recommendations. He, or other subscribers, are quick to answer my questions. This keeps you in the trade with an expert assisting you, and teaches you how to trade these strategies at the same time. In addition, I have found OP to be very responsive to questions as well as feedback.

    I’ll be happy to answer any questions you may have.
    Feel free to contact me at smrusso@aol.com.

    Sam Russo
    Boynton Beach, Florida

    Thank you for the vote of confidence Sam. It’s members like you who keeps the community growing and learning from each other.

    Hi OP,

    I find it hard to put into words the value of the service you (and the whole OP community) offer the individual retail trader and investor. In my opinion, this style of options trading is the only path to consistent and repeatable profitability. I also have not found another service that puts all of these strategies together the way that optionpundit.com does. It feels like a true group of friends and peers that are learning and growing together, not just someone taking our money and throwing out trade ideas. I sincerely appreciate the time and efforts you put into your service for your members, especially at the price you offer it for. True knowledge is priceless.

    Thanks Again,
    David Castello
    Ormond Beach, Florida

    Thank you David. I appreciate your feedback. I hope OPNewsletter continues to deliver rather exceed the expectation that members have from it.

    Another interesting learning happened while I was playing WFR earnings with a bullish perspective. I landed in the worst case i.e. Stocked gapped down hugely vs my expectations. To add to pain, I was also assigned on WFR 55s. Keep an eye on the blog posts for strategy concept and on the forum postings for specific trade with prices (OPN subscribers) where I shall share with you how I turned that worst case into a profitable trade.

    Profitable trading, OP

  • Where is the Bull?

    Amongst all the bearishness in the market you might think there is none except one obvious answer OIL. There are many areas that are just moving up with their own share of correction along the up way.

    I have been mentioning my “Fantastic Four” for quite sometime. Even since my last post, in just less than two weeks POT is up >+10%, MOS is up >+20%, CF is also up >+10%, and MON >+5% after touching 52wk high. In fact, Intrepid Potash (IPI) touched 52wks high today (My post here). But keeping them is not easy and requires guts, well more than guts it is how well one hedges against any sharp corrections on the way up. A very simple and popular way will be buy puts and fund the cost by selling calls. For instance POT is currently $223, so you buy 220 puts and sell OOM calls to offset the cost of puts. I shall cover this in more details some other day.

    Another sector on the roll is coal. Check out the PCX, ANR, BTU, FDG, and ACI. Oil has its impact of alternative energy fuels as well. As Oil prices are climbing higher, all other energy resources are becoming cheaper relative to oil. One may argue why Rails are falling apart, but there is more to rails than just oil’s rise. But still it’s not a beaten down sector if you look at short term horizon of say 3months.

    Above are just two examples. You may find even more. However, as these are moving-up, the risk of their fall is also increasing. So be careful about your entry and exit points.

    Last point, the bull is on the downside as well. It’s all a matter of perspective. Almost similar strategies can be created for the downward move. However, the risk is higher. Our human brain in general is “bullish” so at the first moment of upward move (assuming I am bearish), I am more “panicked” than if I would if I were bullish and if there was a reversal.

    Have fun, Profitable trading, OP

  • Fantastic Four Does it Again

    Mosaic (MOS), CF Industries (CF), Monsanto (MON) and Potash (POT) are my fantastic four of the agriculture and farming sectors. I mentioned those here and then again asked a question about a month ago, when the four were travelling earth from the sky. Whoever has the medicine to manage trading constipation did pretty damn good. And guess what, on Tuesday when crude slipped, it seemed as if these were dumped again. See today’s action and all four are flying CF up +10%, MON +5%, MOS +7% and POT +4%. Those may not sound big % gains, so look at absolute dollars, and if you are an option trader, I think you will be pleasantly surprised. POT has been my 4th biggest profit contributor of the 2008 (so far). They have a particular behaviour and in case, you are on the wrong side, these four could easily be money losing machines. That’s why I called in my last post “Hot is tough to handle, so handle carefully”. These continue to be on my watch list as long as agri and commodities business is booming. They will also be the first ones to get out any signs of “commodity bubble” bursting.

    It’s beautiful if a computer modeling can help you multiply your investments, but I shall be careful. Quant Asset Management, a Singapore- based hedge fund which uses computer models to pick trades, said it plans to double the assets it manages this year after beating its peers Oh btw, The top three countries to invest in now would be the U.S., South Korea and the U.K., according to Quant’s computers, and the industries, marine transportation, general mining and exploration. Read more.

    But I will not leave Vietnam behind. It has excellent potential. Read recent free economic paper from Goldman Sachs (GS) to understand more about the Potential country that could be the next Asian Tiger in the making. Be mindful this is the same Goldman sachs that coined BRIC and also told the world about N-11 so Ignore it at your peril.

    Food For thought– JPMorgan Chase & Co. analyst Kenneth Worthington became the latest to cut his fiscal second-quarter earnings estimates on Investment Banks. This includes Lehman Brothers (LEH), Goldman Sachs(GS) and Morgan Stanley (MS). As per Bloomberg, Lehman Brothers Holdings Inc., the fourth-largest U.S. securities firm, needs more capital even after raising $6 billion to recover from credit-market losses, said David Einhorn, a hedge fund manager who’s betting that Lehman shares will fall.

    Love it or hate it, it’s called WallStreet,

    Profitable trading, OP