S&P 500 INDEX MEMBERS
CME GROUP INC
245.39
10.97
4.68
941,980
15:43
GOOGLE INC-CL A
349.36
6.67
1.95
2,914,596
15:43
GOLDMAN SACHS GP
106.60
6.14
6.11
21,833,487
15:43
MASTERCARD INC-A
166.99
3.94
2.42
2,610,808
15:43
Tuesday, March 31, 2009
Sunday, March 29, 2009
Friday, March 27, 2009
Banks: Did they get a cushy deal?
Top US bankers supported President Barack Obama's plan to rid financial institutions of bad debts on Friday, but said there was not agreement on all issues. Credit is not flowing and the big bounuses are still outstanding for the most part.
Mr. President: The American Taxpayer wants to know; When are you going to repay us our money?
Big Banks: It is our understanding that we have until credit is flowing again and we return to profitability.
Mr. President: Well, Big Banks per your statement you have been profitable for 2 months and we need this money back for other TRAF, TARP, programs and or other emarks.
Big Banks: Give us another month, no, no, make it 18 months. So we can get a even bigger rate of return for us from the interest rate we only reserved for the weathly and powerful.
Mr. President: Why so long a time frame?
Big Banks: We made more money from the S&L Bailout then you are paying us to clean up our mess again. You know Mr. President, we could just gave the money and pocket the weathly rate of return with our bonuses intact.
Mr. President: Ummm? Get me Sec. Treasury on the phone. Thank for coming and we will talk so again.
Mr. President: The American Taxpayer wants to know; When are you going to repay us our money?
Big Banks: It is our understanding that we have until credit is flowing again and we return to profitability.
Mr. President: Well, Big Banks per your statement you have been profitable for 2 months and we need this money back for other TRAF, TARP, programs and or other emarks.
Big Banks: Give us another month, no, no, make it 18 months. So we can get a even bigger rate of return for us from the interest rate we only reserved for the weathly and powerful.
Mr. President: Why so long a time frame?
Big Banks: We made more money from the S&L Bailout then you are paying us to clean up our mess again. You know Mr. President, we could just gave the money and pocket the weathly rate of return with our bonuses intact.
Mr. President: Ummm? Get me Sec. Treasury on the phone. Thank for coming and we will talk so again.
Wednesday, March 25, 2009
Important Scheduled News
8:30am USD Unemployment Claims
8:30am USD Final GDP q/q
8:30am USD Final GDP Price Index q/q
9:25am USD FOMC Member Lacker Speaks
10:00am USD Treasury Sec Geithner Speaks
10:30 USD Natural Gas Storage
12:30pm USD FOMC Member Lacker Speaks
8:30am USD Final GDP q/q
8:30am USD Final GDP Price Index q/q
9:25am USD FOMC Member Lacker Speaks
10:00am USD Treasury Sec Geithner Speaks
10:30 USD Natural Gas Storage
12:30pm USD FOMC Member Lacker Speaks
Sector Map
GS was dropping in the pre market, as the futures were closing up for a higher open. GS is one of the leaders and we should take note of the overall status of this leader. Mid Day Finanical were down cross the board as so the market. We make an amazing run into the close to close positive for the day. Pick your battles: day positions maybe better than a hold on the downside or upside.
Thursday, March 19, 2009
IV - GS Stock
As you can see the IV on GS is currently dropping pretty hard to the 75% level. Should help on the short side if the financials continue their pressure to the downside. AIG, C what are the think man!
Sector Map
Financial were a big drag on the markets today and should be more bounce to the ounce, for awhile. What will the "UpTick Rule" do? Slow things down a bit. Limit your losses and the profits will come.
Wednesday, March 18, 2009
Independent Professional Trader Rate
It can be difficult to establish an hourly rate as an Independent Professional Traders. We’re not, after all, like other industries. We aren’t selling widgets, and we don’t have specific costs of employees or raw materials to base our calculations on. Furthermore, as friendly as we all are with each other, we often have no idea how much other Independent Professional Traders are making. Consequently, I think the answer for most of us is usually: as much as I can get.
While it may be an acceptable (or at least common) to tailor our rates to the situation, let’s try to nail down a formula here that we can use to establish a standard base rate. Then we’ll talk about how to use this base rate.
How do other industries establish hourly rates?
Many freelance industries use what’s called a target return pricing strategy that may be helpful to us as Independent Professional Traders. With this technique you begin your calculations with what you would like as the end result. For instance, let’s say you want to make $50,000 a year. You simply calculate how many billable hours there are in a year and divide $50k by that number. Bam! - That’s your hourly rate.
In theory, this might (might) be a good way to establish a blanket hourly rate for all of your projects. If you assume a 40 hour work week and 52 work weeks a year, that would equal 2,080 hours. If you want to make $50k a year as an Independent Professional Trader, and if you were working 40 hours a week, you would need to charge $24/hour. But that’s not really how being an Independent Professional Trader works, right?
Target return pricing for an Independent Professional Trader
There is some debate, even in the regular business world, about the number of billable hours in a year. What about vacation weeks? Sick days? Holidays?
It’s probably more complicated in the industry. How many billable hours are there for each year? It’s a difficult question because our schedules rarely adhere to the 9-to-5 standard. I think a better question would be: How many billable hours do you expect to trade each year and how much do you want to make from them?
For example, let’s say you have a steady strategy that pulls in $30,000 a year and takes up 30 hours a week. You wouldn’t mind working another 10 hours a week (520 hours a year) and your target annual income is $45,000. To turn those 520 billable hours into $15,000, you’d have to charge $28.85/hour.
Certainly, many of our trades are not paid on an hourly rate. We are usually offered a flat rate per performance/service/trade and that’s that. However, you can use your calculated hourly rate as a standard against which you are able to tell a GOOD Trade from a bad trade.
For instance, let’s say, again, that you’ve decided you have 4 hours a week to trade and, again, you want to make $15,000 with that time. To start, your 4 hours a week, we should take into account not just the 4 hours you will spend trading, but also the time it takes to prep you’ll need during the week for the trades themselves. You determine that the average of 30 minutes of prep time each week. Altogether, that’s a 5 hour commitment a week. For the 5 total hours your trade profits are $120, or $24/hour overall.
You’ll remember that we already established that you would like to make at least $28.85/hour, so this is less than your ideal. You might still take the trades, of course, but at least this will give you a good idea of generally how valuable the trade is to you.
Let’s have another example. Say you traded. Let’s say the trade is 2.75 hours with minimal prep time. The trade profit is $200.
Altogether - assuming you have not traded again for this day – for $200, that would mean roughly $72/hour. If you have a minimum of $28 per hour that’s a good trade! You can feel good!
While it may be an acceptable (or at least common) to tailor our rates to the situation, let’s try to nail down a formula here that we can use to establish a standard base rate. Then we’ll talk about how to use this base rate.
How do other industries establish hourly rates?
Many freelance industries use what’s called a target return pricing strategy that may be helpful to us as Independent Professional Traders. With this technique you begin your calculations with what you would like as the end result. For instance, let’s say you want to make $50,000 a year. You simply calculate how many billable hours there are in a year and divide $50k by that number. Bam! - That’s your hourly rate.
In theory, this might (might) be a good way to establish a blanket hourly rate for all of your projects. If you assume a 40 hour work week and 52 work weeks a year, that would equal 2,080 hours. If you want to make $50k a year as an Independent Professional Trader, and if you were working 40 hours a week, you would need to charge $24/hour. But that’s not really how being an Independent Professional Trader works, right?
Target return pricing for an Independent Professional Trader
There is some debate, even in the regular business world, about the number of billable hours in a year. What about vacation weeks? Sick days? Holidays?
It’s probably more complicated in the industry. How many billable hours are there for each year? It’s a difficult question because our schedules rarely adhere to the 9-to-5 standard. I think a better question would be: How many billable hours do you expect to trade each year and how much do you want to make from them?
For example, let’s say you have a steady strategy that pulls in $30,000 a year and takes up 30 hours a week. You wouldn’t mind working another 10 hours a week (520 hours a year) and your target annual income is $45,000. To turn those 520 billable hours into $15,000, you’d have to charge $28.85/hour.
Certainly, many of our trades are not paid on an hourly rate. We are usually offered a flat rate per performance/service/trade and that’s that. However, you can use your calculated hourly rate as a standard against which you are able to tell a GOOD Trade from a bad trade.
For instance, let’s say, again, that you’ve decided you have 4 hours a week to trade and, again, you want to make $15,000 with that time. To start, your 4 hours a week, we should take into account not just the 4 hours you will spend trading, but also the time it takes to prep you’ll need during the week for the trades themselves. You determine that the average of 30 minutes of prep time each week. Altogether, that’s a 5 hour commitment a week. For the 5 total hours your trade profits are $120, or $24/hour overall.
You’ll remember that we already established that you would like to make at least $28.85/hour, so this is less than your ideal. You might still take the trades, of course, but at least this will give you a good idea of generally how valuable the trade is to you.
Let’s have another example. Say you traded. Let’s say the trade is 2.75 hours with minimal prep time. The trade profit is $200.
Altogether - assuming you have not traded again for this day – for $200, that would mean roughly $72/hour. If you have a minimum of $28 per hour that’s a good trade! You can feel good!
Wednesday, March 11, 2009
Sector Map for March 11, 2009
Mixed market close, however we are still below the 7k level and tomorrow will bring us more unemployment numbers with retail sales number which would probably move the markets more then the unemployment number; we know there are still layoff more and more these days.
GS - Earnings Run
Above is a GS: DAILY 3 MONTHS VOLATILITY CHART
GS is on it typical earnings run with the market, this position is closed as of the close of today. profit needs to be taken if it is big or small. Puts will expire worthless or you can cash'm in for some money, if the commission does not cost more.
GS (GOLDMAN SACHS GROUP INC)
93.10 +7.82
Mar 11, 2009 @ 15:57 ET
Bid 93.06 Ask 93.10 Size 1x17 Vol 34976740
09 Mar 85.00 (GS CQ-E) 10.50 +5.15 10.45 10.60 1951 8096
09 Mar 90.00 (GS CR-E) 7.00 +3.95 6.90 7.00 3467 22349
Tuesday, March 10, 2009
Market Rally on C?! Shot of C for Financials?
Well the call options were very much in the profit zone for today. Price closed on the daily chart above the 10-day, 50-day MA. There looks to be some minor resistance at the 20-day MA. Will see if this hold for Wednesday, there are alot of thing in the news on Wed. Market-to-Mark is to be look at; Ben stated this morning he would not support it. Asst Treasure is speaking at 10AM ET. VIX is below 50 and currently at time of writing in the 40's.
GS (GOLDMAN SACHS GROUP INC)
85.28 +11.33
Mar 11, 2009 @ 01:17 ET
Bid 83.25 Ask 0.0 Size 1x0 Vol 35007177
09 Mar 85.00 (GS CQ-E) 5.35 +3.60 5.30 5.40 3935 8717
09 Mar 90.00 (GS CR-E) 3.05 +2.15 3.00 3.10 4516 20662
Interesting thing about C is that if I was getting money from the government, I better show a profit in the first couple of months or weeks, if I had received this money, or I would likely not get more as my counterpart AIG did. Let back everything out "Government Money" and let see what we have; pretty much same thing.
Sunday, March 8, 2009
Its Greek To Me?! - Options Delta and Theta
DeltaDelta is a measure of responsiveness of an option's price relative to the change in price of the underlying security. For instance, if GS calls have a delta of 0.8, for every $1 that GS rises, the GS calls will rise by 80 cents per share, or $80 per contract. Sometimes an option’s delta is not listed as a decimal, but as a whole number - perhaps '60' in the previous case. However, a delta can never be greater than 1.00, or 100% ... that's just an alternative way of describing how responsive an option is to change in the underlying stock. The more conventional representation is in decimal form.
For put options, since they increase in value as the underlying stock or index moves lower, their delta is given as a negative number. Had a put been considered instead of a call in the above example, and the responsiveness was still 0.70 worth of change for every $1.00 in the underlying, that put would have been given a delta value of -0.70. In the case of put options, delta is expressed as a negative number.
Theta
Also known as time decay, 'theta' is the amount of daily reduction of an option contract's value as the expiration date approaches. The amount is generally expressed as a negative number, though some data providers simply display the amount of daily loss as a positive number. It's also important to understand that some data providers express theta for an entire contract, while others might supply a theta value simply for one underlying share. Since an option contract represents 100 shares of a stock, in the latter case the theta value would need to be multiplied by 100 to determine the daily value decline of a contract.
Using the GS call example again, a theta of -.10 would mean the contract loses $10 per day just due to the passage of time.
Like all option Greeks, theta is also usually listed as a decimalized figure. A theta value of 0.07 simply means that for each share of a 100 share contract, that contract loses 7 cents per day. Or, the entire contract loses $7.00 in value every day. This daily loss includes weekends.
Obviously theta and delta have an immediate impact - for better or worse - on an option's value.
For this reason, most traders compare several 'what if' delta and theta scenarios before choosing an option. For an option owner, the higher the delta, the better the likely dollar movement from the option as the underlying stock or index moves lower. However, high-delta options usually cost more (and are usually deeper in the money), which can offset the benefit of a strong delta.
There is no particular argument for or against high-delta options. The lesson to be learned is simply that not all options are the same. An individual trader must weigh the upside and the downside of a variety of option trading scenarios to determine which delta makes the most sense with respect to risk and reward.
Saturday, March 7, 2009
GS - Earnings Estimates Due March 18, 2009
GS
Q1 2009 Goldman Sachs Earnings Release
$ 1.35 EPS Estimates
$ 3.23 Prev. Year Actual
16-Mar-09 - 26-Mar-09 Date and Time (ET)
Earnings for GS are due out Before The Open on March 18, 2009. March options have a week left before expiration and we typical do not do the front month during earnings week, however, look at the charts and pick your battles. This is like a lottery ticket, which every side is profitable take your profits and move on. Straddle purchase as follows:
GS Mar 85 Calls for 2.73 with a delta of .31 for every dollar the underlying stock moves.
GS Mar 65 Puts for 3.00 with a delta of .25 for every dollar the underlying stock moves.
or
GS Mar 90 Calls for 1.52 with a delta of .20 for every dollar the underlying stock moves.
GS Mar 60 for 1.99 with a delta of .16 for every dollar the underlying stock moves.
Friday, March 6, 2009
Most Active By Vol - March 6
ExxonMobil (XOM)
47,092,171
64.03
AppleInc (AAPL)
36,109,637
85.3
Genentech (DNA)
34,726,071
90.86
GoldmanSachs (GS)
33,485,631
75.65
Chevron (CVX)
22,107,787
58.27
McDonalds (MCD)
18,188,340
52.12
PotashCp (POT)
16,731,259
66.31
IBM (IBM)
15,187,819
85.81
VISA ClA (V)
15,177,156
50.19
Amazon.com (AMZN)
15,093,753
61.69
RohmHaas (ROH)
13,305,065
63.8
Google (GOOG)
7,234,257
308.57
Gnzym (GENZ)
6,126,303
53.17
ApolloGp A (APOL)
4,352,344
64.69
GS - Daily and Weekly Chart
Trade of March 2 - March 6, 2009. GS was all over the place and it was a trade that deserved a watch over. We were able to make some profits on GS, however, we left a lot on the table -$3K. Strategy, is working however we need to focus on staying the course.
Sector Maps
Local Jobs vanish at faster clip, unemployment accrelerated at a record pace in January, based on data that date to 1990. That number exceeded the number of layoffs during the 1990s recession, when annualized jobs they are toast. Note: House Passes Mortgage Relief Bill. Banks/Finanicals are still the major players in this game. Investors are still worry about banks and GM.
Monday, March 2, 2009
Sector Map
The above charts do not do justice to what is happening here in the markets, we have not going anywhere but sideways. AIG is getting another handout, they should let them fail as we did with the other institutions. Small companies will be able to gain in market share and we will be one step closer the the prize in the sky. Red Rover, Red Rover, send AIG out the down and let put us all back on track again.
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