Wednesday, October 19, 2016

On the Heels of Round 3

Let's see how debate 3 shapes up.  Debate 1 was such a disaster for Donald that Hillary rose up purely by the mere fact that she showed up, but the less she speaks and the less the camera is on her face the better.

Debate 2 on the other hand was a big victory for Donald.  The orange bozo was so buried in shit in the days leading up to that second debate yet he really turned things around and trounced all over Hillary, focusing all the scandals on her rather than him.  The worst moment of the whole debate was when they were asked to bring up one positive thing about the other candidate and Hillary bombed again, a terrible way for her to end a debate:  She complimented his offspring of all things. How lame is that!  Hillary always tries to take the "safe" way and lie through her teeth.  She doesn't have the balls nor the sincerity that Donald has.  Of course she doesn't like Donald's kids!  I mean, who does? That boring automaton Ivanka and Donald douchebag junior?  Cmon, really?  She shoulda replied that Donald's one positive quality is his hair.  That woulda been a great note to end it on, that if he keeps objectifying women, let him get a taste of it, and to drive further the point that if his intricate orange comb-over is his best quality, then he must have no redeeming quality whatsoever.

When Donald replied that Hillary's positive quality is that she just doesn't give up, that was obviously a quip rather than a compliment.  You could see he was driving home the point by adding that with all her jailworthy scandals, one after another, she still had the insanity to continue to run for president, when any normal person under the weight of that much criminality would step down. Big points for Donald here.  Funny enough, Hillary smiled when he "complimented" her, ever oblivious to the fact that he had absolutely nothing positive to say about her, and definitely not about her family, who Donald has repeated are all degenerates.

Wednesday, October 5, 2016

Debate HIghlights

Hillary and Donald Debate Highlights:

Well, I think Hillary was the clear winner here.  But let's be honest, all Hillary had to do was just show up, that's all she had to do.  And of course, not get carted out mid-debate in a coughing fit.  She did way better than that, she showed up, in all her polyester pantsuit glory, and didn't even cough once!

For every point Hillary brought up, Donald's retort dug his grave even deeper.  First of all, on the case of racism against blacks in his early landlord days.  He said that he settled that case by paying the hefty fine and "not admitting to guilt".  OK, everyone knows that in the legal system, if you can afford it, you can buy your innocence.  Donald didn't ever deny that he racially profiled African Americans.  His reply to Hillary was that he "didn't admit to guilt."  Also, he made the excuse that many other landlords racially profiled and that they were all defendants in the suit, therefore it was ok for him to do it because he wasn't the only one.  What a great precedent for someone who's supposed to be a leader and running for the highest office of the country!  This also harks back to the rowdy Trump rallies where Trump encouraged the crowds to bash up the protestors and it was OK because he would pay the victims' medical expenses.  Yeah, money buys everything.
Then we come to the case of Trump's treatment of women.  While I think Hillary just gabs at the mouth most of the time and rarely says anything meaningful, i have to say i was impressed when she brought up the beauty pageant and Trump's disgusting behavior around women.  
It's quite ironic that the Donald can parade around like a fat slob everywhere even though he's running for the highest office of the country, and yet a woman who wins a beauty pageant is not allowed to gain weight.  Such hypocrisy, but if you're a man, in Trump's eyes, and you're white and rich, then you can do whatever you want, but if you're a woman you're basically a pig unless you conform to Trump's chauvinistic viewpoint of what a woman ought to be.
The whole concept of the beauty pageant is disgusting, and to think a leader of a country would condone this, the clear objectification of one gender over another in such a domineering patronizing way.  Just look at Trump's kids, how he raised them, both his sons look like douchebags in the most classic sense.  Ivanka, geez, she looks like a cardboard cutout, she even talks like a robot.  Trump might be a big personality himself but his kids seems to have no personality at all and zero charisma, i think anyone can attest to that.

TraderSutra: Why Credit Spreads are a stupid idea if you don't know what you're doing, actual case study

TraderSutra: Why Credit Spreads are a stupid idea if you don't know what you're doing, actual case study

Why Credit Spreads are a stupid idea if you don't know what you're doing, actual case study

This is an email (copied and pasted below) that landed in my inbox yesterday, a day before gold broke below its 3 month support level of around 1308 and free fell over 2.5 standard deviations in just 1 day.  Yes, i got an email from "The Strike Price" and their "Chief Options Strategist" Andy Crowder on "How To Make 14.9% in gold over the next 2 weeks."  That was the title of the article, verbatim!  Well, this article very quickly proved "How to Lose 100% of Your Money in Just One Day".  I don't know who these people are, i never heard of "chief options strategist" Andy Crowder before and I'm sure I won't hear his name again.  You know these services, they're a dime a dozen and they all like to spam your inbox.  This one by far was the worst of the lot.  I'm sick of all these punters who talk about making measly percentage gains of a few percent claiming 80-85% success rate with credit spreads.  What Andy Crowder doesn't tell you in his spiel is that 14.9% return is based on your capital at risk, which means you are risking almost 7 times what your potential gain is, that's terrible risk reward.  Oh, but we're talking about an 85% probability of winning, so it's ok.  Gimme a break. This is just how dense these people are.  The probability of these trades working is actually far less, and Andy's analysis is so simplistic, obtuse, and uninformed.  His rationale was that oh gold is oversold, oh look at my trusted indicator the RSI....geez, what r u in 3rd grade????  you're gonna base risking 7 times the loss based on a frickin RSI?  Did you look at the COT report?  no... Did you look up the demand out of china and india?  no!  Did you read my article just a few days earlier about how the dam is about to crack any day now in gold and swing the floodgates wide open?  about how more calls were being bought and stacked on with every down move, sending up contrarian warning flags?  no your brain lacks that sophistication.  Did you even study the chart pattern of gold and acknowledge the clear bearish descending triangle?  of course you didn't even do that.  Andy Crowder, shame shame...

How to Make 14.9% in Gold over the Next Two Weeks
By: Andy Crowder
Tuesday, October 4, 2016
As a special service to our readers, I will be offering a free webinar tomorrow (Wednesday). It will be for educational purposes (with several live trades) to throw some light on my process and strategies when trading weekly options.

Today, I want to go over a trading opportunity in Gold (GLD). I will also go over the today’s trade in far greater detail in the upcoming webinar tomorrow, including my risk parameters. 
In this special issue I’ll also reveal some of the key aspects of knowing when to make a trade.

Trading Opportunity in Gold
Let’s examine how a weekly options trade works using one of my two approaches.
The commodities market – more specifically gold, is in a “very oversold” state again, according to my favorite mean-reversion indicator, RSI.
Once I see confirmation of an oversold state in one of the highly-liquid ETFs I follow, like GLD, I immediately look for a trade.

With GLD trading for roughly $125.11 and in a very oversold state, I want to use a strategy like a bull put spread. A bull put spread will enable me a margin of error just in case the current short-term directional trend – in this case a bearish trend – continues.

The next step is to choose the actual spread. I want to start by looking at the Prob.OTM column in search of a probability of success around 85%.
Above is the November options chain for GLD. I always start with the probability of success. I’m only interested in trades with a greater than 80% probability of success.

After I find the odds I like, I then look at the premium. I know lots of options investors struggle with how to choose a specific strike. My advice is always to calculate the yield on cash or yield on margin to gauge the percentage you’ll earn.

If I were to choose the strike price closest to 85%, I would need to sell the 119 strike. However, since I would need to buy the 117 strike which would only bring in a premium (bid price – ask price) of $0.18.

So, the next step is to move further up the options chain towards the 120 strike. This lowers my probability of success to roughly 81%, but it allows me to bring in an ample amount of premium to make it a worthy trade.
I can sell the 120/118 bull put spread for $0.26 ($0.59 – $0.33). By selling the strike with a slightly lower probability of success, I am able to make a return of 14.9%, compared to 9.9% by selling the 119/117 bull put spread. The margin of error on the 120/118 bull put spread is $4.89. Again, the decision always rests with how much probability of success you want to have on your trade. In this case, we are going with an 80.97% probability.
As long as GLD closes above the 120 strike at November expiration, the trade will receive the max profit of 14.9%. But remember, the goal is to take the trade off within a week or two, hence the weekly options trade. Yes, I will integrate weekly options trades with only 7-14 days left until expiration, but this has been my method as of late. Anyway…the break-even point is $119.74, which is the strike price of $120 minus the premium received of $0.26.
Again, given the extreme oversold nature of GLD, I am comfortable pushing forward with the trade. Again, I will go over this trade and most likely 3 to 4 more in the upcoming webinar on Wednesday.
As I said before, I do things a bit differently than most people when trading weekly options. I do not make a trade every week. I wait for overbought/oversold extremes to enter the market and then I begin to look for a trade.
All of the numbers can be confusing, but if you focus on the probability first, and then calculate the yield, you can more easily gauge whether the trade makes sense for your portfolio.
In this case, we’re looking at a 14.9% gain in 45 days, with an 80.9% probability of success.
I encourage you to familiarize yourself with the tools made available to you by your broker. If they don’t offer them, consider switching brokers. Once you get used to the kind of baseline income that’s available from different options scenarios, you will start to recognize the difference between good, average and bad opportunities – and you’ll become a better trader.
And one of the most important aspects of trading is being able to make that kind of informed decision.
For us to randomly select a trade based on the fact that it is Thursday or Friday, or any specific day for that matter, is irresponsible. The market doesn’t work that way. I mean, what’s the hurry? Why do we need to make trades every week, especially for arbitrary reasons? We are in this for the long haul, so let’s take a more methodical, long-term approach.
Again, on Wednesday I will be discussing in far greater detail my approach to weekly options. If you would like to learn more, please click here.

During this event, I’ll be going into much greater detail about this GLD trade, as well as 2-4 other income trades you can make live, during my event.
Andy Crowder
Andy Crowder
Chief Options Strategist