What price did they cover? It looked like 750,000 shares executed and TQQQ opened $4 higher. Did Knight lose $3 MM?
I dunno where everyone covered. And if it was Knight running the box then they got whacked pretty good. I just heard the bits and pieces, so I don't know the whole story behind it since it didn't involve me. Supposedly the offer was sitting there for 5 minutes 4+ points below the previous close before anyone started hitting it. In situations like that the first thing you check is to make sure there was no dividend or some sort of corporate action. Normally, it would be reflected in the previous close data, but sometimes it can be wrong. You can also check the IV for the ETF, but sometimes those aren't updated correctly in the premarket. I have seen ETF and stock screw ups numerous times, so I have experience with them. It can take some time to get used to the idea that you are correct and not the idiot offering/bidding millions of shares at the incorrect price. Once you do have the confidence and experience to recognize when someone is an idiot you lay into the trade and hopefully profit.
Market up big on the potential Euro debt deal news. http://finance.yahoo.com/news/EU-Se...tml?x=0&sec=topStories&pos=main&asset=&ccode= European leaders cajoled bondholders into accepting 50 percent writedowns on Greek debt and boosted their rescue fund’s capacity to 1 trillion euros ($1.4 trillion) in a crisis-fighting package intended to shield the euro area. The 17-nation euro and stocks climbed while bond spreads narrowed after leaders emerged early today from a 10-hour summit in Brussels armed with a plan they said points the way out of the quagmire, albeit with some details still to be ironed out. “Overall the outcome is better than we anticipated one week ago,” Laurent Bilke, global head of inflation strategy at Nomura International Plc in London, said in an interview. “There are several issues left open, but I do believe that getting a more necessary debt relief for Greece is a pretty important step.” Last-ditch talks with bank representatives led to the debt- relief accord, in an effort to quarantine Greece and prevent speculation against Italy and France from ravaging the euro zone and wreaking global economic havoc. Greek Prime Minister George Papandreou will address the nation at 8 p.m. in Athens to outline the summit’s ramifications for the country at the eye of the two-year sovereign debt crisis. “The world’s attention was on these talks,” German Chancellor Angela Merkel told reporters in Brussels at about 4:15 a.m. “We Europeans showed tonight that we reached the right conclusions.” ECB Role Measures include recapitalization of European banks, a potentially bigger role for the International Monetary Fund, a commitment from Italy to do more to reduce its debt and a signal from leaders that the European Central Bank will maintain bond purchases in the secondary market. The euro advanced to a seven-week high against the dollar, rising above $1.40 for the first time since September. It was at $1.4007 at 11:48 a.m. in Brussels. The Stoxx Europe 600 Index surged 2.6 percent. “It’s long on words, short on detail,” said Peter Dixon, an economist at Commerzbank AG in London. “The solution that’s been put in place now gives us enough ammunition to stave off any immediate problems but we may well run into other problems down the track.” The summit was the 14th in the 21 months since Europe pledged solidarity with Greece, and came amid mounting global pressure for the bloc to deliver a credible anti-crisis toolkit before a Group of 20 meeting Nov. 3-4 in Cannes, France. Banks Summoned Europe’s leaders took the unusual step of summoning the banks’ representative, Managing Director Charles Dallara of the Institute of International Finance, into the summit to break the deadlock over how to cut Greece’s debt to 120 percent of gross domestic product by 2020 from a forecast of about 170 percent next year. Dallara squared off with a group led by Merkel and French President Nicolas Sarkozy around midnight after issuing an e- mailed statement that “there is no agreement on any element of a deal.” Sarkozy said the bankers were escorted in “not to negotiate, but to inform them on decisions taken by the 17 and then they themselves went on to think and work on it.” Luxembourg Prime Minister Jean-Claude Juncker said the banks’ resistance was broken by a threat “to move toward a scenario of total insolvency of Greece, which would have cost states a lot of money and which would have ruined the banks.” Insolvency Threat The resulting “voluntary” losses by bondholders were the key plank in a second bailout for Greece, which was awarded 110 billion euros in May 2010 at the outbreak of the crisis. The new program includes 130 billion euros of official aid, up from 109 billion euros envisioned in July. The Washington-based IMF, meanwhile, said it is ready to disburse its 2.2 billion-euro share of the next installment of Greece’s original bailout. The release of the euro zone’s 5.8 billion-euro share was approved last week. Greek, Spanish, Italian and French bonds all rallied today, with the spreads over benchmark German bunds narrowing. The yield on German 10-year bonds jumped eight basis points, the most in more than 11 weeks, to 2.11 percent at 10:05 a.m. London The yield on Greek bonds due in October 2022 fell 117 basis points to 24.15 percent, Spanish 10-year yields dropped 16 basis points to 5.32 percent and Italy’s 10-year bonds advanced for a second day, with yields falling 13 basis points to 5.81 percent. ECB President Jean-Claude Trichet, who has warned against the spillover effects of bond writedowns on the banking system, didn’t take part in the confrontation with bankers on the debt relief. He later praised the leaders’ determination to get ahead of the crisis. Trichet’s Call The measures agreed “have to be fully implemented, as rapidly and effectively as possible,” Trichet, who leaves office Oct. 31, said afterwards. Leaders tiptoed around the politically independent ECB’s broader role in keeping the euro sound, making no mention of its bond-purchase program in a 15-page statement. The Frankfurt- based central bank has bought 169.5 billion euros in bonds so far, starting with Greece, Ireland and Portugal last year, then extending the coverage to Italy and Spain in August. While Trichet didn’t mention the controversial purchases either, his successor, Mario Draghi of Italy, indicated that the policy will continue. Speaking in Rome yesterday, Draghi said the ECB remains “determined to avoid a poor functioning of monetary and financial markets.” Leaders backed two ways of leveraging up the 440 billion- euro rescue fund, which was designed last year to shield smaller countries such as Greece, Ireland and Portugal, and lacks the heft to protect Italy, the euro area’s third-largest economy. Leverage Options Under plans to be spelled out in November, the fund will be used to insure bond sales and to create a special investment vehicle that would court outside money, from public and private financial institutions and investors. Canadian Prime Minister Stephen Harper, speaking at a conference in Perth, Australia, called the agreement “grounds for cautious optimism,” and urged European leaders to work out details of the plan and implement it. Europe cast about for more international money to aid the rescue, with France’s Sarkozy set to call Chinese leader Hu Jintao tomorrow with the goal of tapping into the world’s largest foreign exchange reserves. While the mechanics are a work in progress, European Union President Herman Van Rompuy said the leverage effect would multiply the power of the fund by a factor of four to five. He compared it to normal banking business that needn’t entail excessive risks. ‘Detail Further’ “It will be important to detail further the modalities of how this enhanced EFSF will operate and deliver the scale of support envisaged,” IMF Managing Director Christine Lagarde said. Europe also struck a bank-recapitalization accord, setting a June 30, 2012, deadline for lenders to reach core capital reserves of 9 percent after writing down their sovereign-debt holdings. Banks below that target would face “constraints” on paying dividends and awarding bonuses, a statement said. The European Banking Authority estimated banks’ capital needs at 106 billion euros, with Spanish banks requiring 26.2 billion euros and Italian banks 14.8 billion euros. It gave them until Dec. 25 to submit money-raising plans to national supervisors. Banks that fail to raise enough capital on the markets will first tap national governments, falling back on the EFSF rescue fund only as a last resort.
What would happen if I read all 237 pages of this thread and devoted all my savings to following what I learned from it? My own philosophy of investing learned in the school of hard knocks. Diversify with market average indexes. Otherwise you say you can beat the average. To beat the average you have to compete with the professionals, who beat the average by taking money from the amteurs who think they can beat the average and try to compete with the professionals. The professionals have insider knowlege and superior tools, aside from working at it much harder.
I don't think there would be much to be learned that you could apply to the current market. It's fun to look at everything that has been said in this thread, but I dunno what can be learned from it all. The only thing I disagree with is that professionals take money from amateurs. That's just not true because amateurs don't have that much money.
One thing I thought that was interesting from today was how this whole Greek bailout deal was done by not triggering a credit default and not triggering the CDS contracts. Basically, by going that route the unintended consequence was actually causing a potential liquidity crisis for lower quality debt (Italy, Spain, Portugal) since they have found a way to circumvent the insurance people had bought on the lower quality debt.
Robbie, I am thinking of reopening long positions in Gold and Silver. I exited the market completely of my holdings last Wednesday (a day or two early) because I anticipated an upcoming final correction. I was wondering whether or not you had any markers that see the market continuing to drop in respect to those commodities or if it has possibly bottomed out and the time to buy is now. I appreciate the advice and thank you
I'd look to buy gold closer to that 200 day MA if you are looking to get in. I think it is going to be hard to expect gold to make a run to new highs anytime soon and I'd like to see some clearer support get put in. Silver's chart looks like crap. Maybe look to buy near 25-26? I mean silver is going to probably lag gold for awhile. It just went thru a massive blow off top and it should probably only be bought on weakness and panic and not on any kind of strength. Also, look for that 200 day MA in silver to serve as resistance until silver is able to find some sort of solid support. That's my quick thoughts on things.
For all you guys who love crappy "value" stocks you might want to check out RIMM here. They are actually trading below book value and still have no debt on their books. I'm going to be looking to sell puts and maybe buy calls tomorrow. I think I'll go after the 13 (about 50 cents) and 15 puts (about a dollar) in Jan and maybe buy some 19 calls (about 2.60) and sell some 25 (about a dollar) and 30 calls (about 40 cents) against that. There is just too much priced into the downside on RIMM and any sort of random buyout rumor would cause a nice pop.
robbie, would you mind taking 5 minutes and explaining exactly what calls and puts are? I have an idea, but it seems foreign to me.
Calls are a contract that you purchase that grants you the right to buy at an agreed upon price in the future. Puts are a contract that you purchase that grants you the right to sell at an agreed upon price in the future. For defintion...1 option contract (call or put) is equal to 100 shares of the underlying stock. You cannot buy or sell an option for less than 100 shares. 1 contract = 100 shares. There are a few stocks where there are 10 share contracts but they are very rare. So if you are looking at RIMM. It is trading at 18.85 currently. Let's say you don't want to purchase the stock either because you don't want to spend that much money to buy the stock or because you are afraid that the stock might drop more in the future. What you can do is purchase a call option. Let's say you decide to buy the January expiration (they expire on January 21st, 2012) $20 strike call option contract for $2.25. This means you have paid $2.25 per share to purchase RIMM at $20 on Jan 21, 2012. 1 call option contract = 100 shares. $2.25 * 100 shares = $225 you spent to purchase this option. This means that in order to profit by the time this contract expires RIMM must be above $22.25. That equates to the $20 strike you purchased plus the $2.25 you paid for that contract. Here are some of the benefits and drawbacks of using options. If you buy 100 shares of RIMM at 18.85 then you are using $1885. If you purchase 1 call contract you are spending $225. So you tie up much less cash, but you also need the stock to move much more for you to make money at expiration. If you purchased the stock and RIMM was at $20 by expiration then you would make $115 or a 6.1% gain. If you purchased the option and the stock was at $20. Then you lose $225 or the price you paid for that option contract...a total loss. If RIMM was at $24.50 by expiration then you would make $565 on your purchase or nearly a 30% gain. If you bought the call option then you would make $225 or a 100% gain at expiration. Now let's add in some more complicated things. The value of the option contract you buy or sell will change in value as the stock moves up or down. The major components that go into the value of an option contract are volatility of the stock, time left until the expiration of the contract, and how far out of the money the contract is. Whenever there is a lot of volatility then the option will be more expensive. Whenever there is more time til expiration then the option will be more expensive. If the price of the stock is far away from the strike price (the price where the option can be exercised aka $20 for the RIMM option we talked about) then the option will be less valuable. All of those components, along with some others, are put into a formula that determines the price of the option contracts. So let's say you bought those $20 call option contracts tomorrow for $2.25 and then on next Thursday let's say RIMM moves from $18.85 to $20. The value of that option contract would increase in value as well. I would guess it would probably be worth $3 if that happened. It would not move up as much in dollar value as the stock due to those things that factor into the price of the option. I hope I didn't get too confusing. Let me know if I need to clarify anything.
Calls and puts are for if you don't think trading stocks are gamble enough for you, you can leverage yourself even more until your nose bleeds and lose everything when you are wrong.
Much better understanding now. So you'd put a call option on a stock you see going up in the near future and a put you're hoping the stock is worse off when the contract is expired.
So for the first time ever I will be buying stock. Tell me what you guys think of these companies, if anything: Enbridg Energy Partners Flowers Foods Inc. Telular Corp Berry Petroleum Optical Cable Corp Venoco I chose income earners (dividends) except for one. I added the non-income earner Venoco because I have a feeling that their value will rise as California state issues permits to drill the Monterey. The Monterey is a shale oil formation with an estimated 15 billion barrels of reserves, the largest of its kind in the United States. However, their stock plunged a few days ago after their quarterly review; the owner seems either nuts, unpredictable or hessitant. He has attempted to buy back shares to take the company private. They have slightly less than a quarter of leases in the Monterey and have been public for less than 10 years.
Yes puts are purchased if you think a decline is coming and calls are purchased if you think the stock will appreciate in value. Another options trading strategy is to buy both a call and a put if you feel that volatility for the options is underpriced. There are many different strategies you can employ with options. They are pretty cool and flexible tools once you learn them, but I would discourage investors and people who aren't watching the market all the time from using them.
