[capeman]

A word of caution: CFC could be a takeover target by WFC or BAC. Moreover, CFC may very well be "too big to fail".

 

Easy Cramer! 

[capeman]

A word of caution: CFC could be a takeover target by WFC or BAC. Moreover, CFC may very well be "too big to fail".

 

Easy Cramer! 

[capeman]

A word of caution: CFC could be a takeover target by WFC or BAC. Moreover, CFC may very well be "too big to fail".

 

Easy Cramer! 

[capeman]

I just stick to the basics… Stocks that I am very confident in going down (HBs, CFC, etc.) you look at the current price and what the option price is. Say CFC was at $35 (not anymore!) and an Oct. $30 put was $1.50 per contract, it would have to go down to $28.50 or lower by expiration to make money off of it at expiration. I was expecting it to make BIG moves down past $30 way before expiration so there would be multiples in the gains. I don’t stay in until expiration and try to get out way before on the big moves.

The last couple of weeks before expiration you can see Puts deteriorate greatly due to time factor.

Back to the point though. I saw CFC going to ~20 by October so $30 puts would make big money in that respect at only $1.50. If CFC had come down to $35 from say $70 in a short time before I decided to buy Puts the IV would likely have added a couple of dollars to their price before I bought them making them less appealing at ~3.50 estimating.

You have to take all of this into account when gambling with it (and it is gambling!). Buying BSC puts right now will cost you 3X more than they would have 3 weeks ago so unless you expect them to go down 3X as much it’s not a good bargain. I think they are going into the toilet so I am still considering those.

[capeman]

I just stick to the basics… Stocks that I am very confident in going down (HBs, CFC, etc.) you look at the current price and what the option price is. Say CFC was at $35 (not anymore!) and an Oct. $30 put was $1.50 per contract, it would have to go down to $28.50 or lower by expiration to make money off of it at expiration. I was expecting it to make BIG moves down past $30 way before expiration so there would be multiples in the gains. I don’t stay in until expiration and try to get out way before on the big moves.

The last couple of weeks before expiration you can see Puts deteriorate greatly due to time factor.

Back to the point though. I saw CFC going to ~20 by October so $30 puts would make big money in that respect at only $1.50. If CFC had come down to $35 from say $70 in a short time before I decided to buy Puts the IV would likely have added a couple of dollars to their price before I bought them making them less appealing at ~3.50 estimating.

You have to take all of this into account when gambling with it (and it is gambling!). Buying BSC puts right now will cost you 3X more than they would have 3 weeks ago so unless you expect them to go down 3X as much it’s not a good bargain. I think they are going into the toilet so I am still considering those.

[capeman]

I just stick to the basics… Stocks that I am very confident in going down (HBs, CFC, etc.) you look at the current price and what the option price is. Say CFC was at $35 (not anymore!) and an Oct. $30 put was $1.50 per contract, it would have to go down to $28.50 or lower by expiration to make money off of it at expiration. I was expecting it to make BIG moves down past $30 way before expiration so there would be multiples in the gains. I don’t stay in until expiration and try to get out way before on the big moves.

The last couple of weeks before expiration you can see Puts deteriorate greatly due to time factor.

Back to the point though. I saw CFC going to ~20 by October so $30 puts would make big money in that respect at only $1.50. If CFC had come down to $35 from say $70 in a short time before I decided to buy Puts the IV would likely have added a couple of dollars to their price before I bought them making them less appealing at ~3.50 estimating.

You have to take all of this into account when gambling with it (and it is gambling!). Buying BSC puts right now will cost you 3X more than they would have 3 weeks ago so unless you expect them to go down 3X as much it’s not a good bargain. I think they are going into the toilet so I am still considering those.

[capeman]

Doubled down on CFC Puts this morning. Thank you Ben.

[capeman]

Doubled down on CFC Puts this morning. Thank you Ben.

[capeman]

Doubled down on CFC Puts this morning. Thank you Ben.

[capeman]

I’m not one to actually go short shares of a company due to the risk and playing with only my lunch money and its gains. I go with some long PUTs say CFC or KBH January 08 puts and you can give yourself a lot of time to watch your speculation play out. The longer PUTs will cost you more due to the time value added into them but they can be a bit safer with short term volatility. Even WAY out-of-the-money puts can get you some good profits. I dropped my KBH Jan 08 $10 puts a bit ago because they were stagnating in my account. They have 5x’ed in the last week or so and they are still way out-of-the-money

If you happen to be In-the-money when the PUT expires I believe you become Short the stock automatically. CFC puts have been doing great and I may have the luck of riding them to oblivion. BSC puts were a great play about two weeks ago but there is now a lot of IV “Implied Volatility” cost in the puts that make them less appealing.

[capeman]

I’m not one to actually go short shares of a company due to the risk and playing with only my lunch money and its gains. I go with some long PUTs say CFC or KBH January 08 puts and you can give yourself a lot of time to watch your speculation play out. The longer PUTs will cost you more due to the time value added into them but they can be a bit safer with short term volatility. Even WAY out-of-the-money puts can get you some good profits. I dropped my KBH Jan 08 $10 puts a bit ago because they were stagnating in my account. They have 5x’ed in the last week or so and they are still way out-of-the-money

If you happen to be In-the-money when the PUT expires I believe you become Short the stock automatically. CFC puts have been doing great and I may have the luck of riding them to oblivion. BSC puts were a great play about two weeks ago but there is now a lot of IV “Implied Volatility” cost in the puts that make them less appealing.

[capeman]

I’m not one to actually go short shares of a company due to the risk and playing with only my lunch money and its gains. I go with some long PUTs say CFC or KBH January 08 puts and you can give yourself a lot of time to watch your speculation play out. The longer PUTs will cost you more due to the time value added into them but they can be a bit safer with short term volatility. Even WAY out-of-the-money puts can get you some good profits. I dropped my KBH Jan 08 $10 puts a bit ago because they were stagnating in my account. They have 5x’ed in the last week or so and they are still way out-of-the-money

If you happen to be In-the-money when the PUT expires I believe you become Short the stock automatically. CFC puts have been doing great and I may have the luck of riding them to oblivion. BSC puts were a great play about two weeks ago but there is now a lot of IV “Implied Volatility” cost in the puts that make them less appealing.

[capeman]

Nikkei is down 650 or 4%. I hope people are ready for some smelly stuff to hit the fan tomorrow.

now -800… gulp!

[capeman]

Nikkei is down 650 or 4%. I hope people are ready for some smelly stuff to hit the fan tomorrow.

now -800… gulp!

[capeman]

Nikkei is down 650 or 4%. I hope people are ready for some smelly stuff to hit the fan tomorrow.

now -800… gulp!

[Author]

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