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American Capital Agency Corp. Message Board

  • xionrevolutions xionrevolutions Jun 23, 2012 12:40 AM Flag

    OT: BMY Part Two ...

    My dear friends, today I exited my 1,889 BMY July $34 Calls @ 1.17. I know I left BMY a bit early, BMY can keep going up without me. I believe I have met my goal.
    My investment on this trade was 138k, I paid around 0.72 per each of the 1,889 calls in 2nd week of June. I was able to exit @ 1.17 today and my net balance is $219k after commissions.
    $219k - $138k = $81k net profit
    $81k / $138k = 0.59 x 100 = 59% return

    I'm heading back towards our beloved ship, the HMS AGNC. Good luck to everyone and I wish you the best always ( =

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    • Congrats. again X.

      BMY might have topped out for the qtr.(imo) today at 36.34.

      I have a buy and hold in my ira with BMY.
      With an $80 trade cost plus fees(86 a trade total), I didn't think I could make enough on a sell and buy-back to make it worthwhile.
      Where does BMY fall to this quarter?

      I'd hate to be head-faked out of my shares.

      BMY just made a strategic acquisition and its possible that its pps does not fall too far this quarter, imo.

      Anyone else have an idea on BMY's future movement?
      Thanks! FOXY


    • Hey Doc

      Nice buy.

      I have the July 21 $34 strike. Up 50% today!


    • Congrats Xion on a nice trade.

      Been waiting to get into BMY - finally got the July 34's yesterday at .47 for 1500 contracts with some of my AGNC profit from this past quarter. Gonna let ride till Ex.

      Maybe a second bite of the apple?


    • I'm back on board the HMS AGNC, I'm back my friends! I'm happy to be on board the best REIT ship in its class, manned by the best crew, and commanded by two brilliant captains, M. Wilkus and G. Kain.
      I purchased 777 AGNC $32 Sept 12 Calls @ 1.40 and am holding them long. I'm holding the other half in cash reserves, ready to exploit any SPO breakthrough. Anchors aweigh and may Godspeed our beloved AGNC! Woohoo ( =

    • Hey X! Wow Bmy is down over 1.50 in pre-market. I'm surely glad you sold your calls when you did. I'll bet you are too.

    • Alright, I've been henpecked into options. I can allocate about 10% to see what the fuss is about.

      And praying to God for money. That's like praying to God to smite your enemies. You've been very lucky, but luck runs out.

      God gives peace, a peace that nothing in this world can give.

    • Add to the list Doc's point about the number of options purchased as insurance.

    • Most option traders will agree, I think, that betting your entire liquid assets (or any substantial portion of them) on a single trade is not advisable. And doing it repeatedly even less so. So I think many of us admire those who do it successfully the way we admire daredevils that swim with sharks or do those motorbike leaps over dozens of cars.

      And we usually don't hear who do these trades without success.

      But the argument against option trading based on statistics that X% of options expire worthless is an old canard without merit. Some of the reasons:

      - Just by looking at an options table you can see that about half of the strikes will be out of the money at expiration. That is a result of how option strikes are created (about half in the money and half out of the money).

      - Many options are sold, not bought, by the public (especially as covered calls). In this case, traders who initiate the transactions want the options to expire worthless. They gain from it.

      - Options that expire in the money (not "worthless") are not necessarily profitable to the traders who initiate these trades. It depends which way they have moved since the initial trade.

      - Near expiration, out of the money options become very cheap (pennies each) and many traders buy huge numbers as wild (but cheap) bets. These usually expire worthless, but they do not represent the main activity of knowledgeable traders. They just distort the statistics.

    • Hi Olee,

      I first traded options on futures on the CME, which is the Chicago Mercantile Exchange, back in the early 90's. They deal in futures and options on futures. Totally different than security options. The numbers for security options is 60% are traded, 10% are exercised and the rest expire(30%).

      The " worthless" word is rather a misnomer because many of these are insurance, as hedges in arbitrage.

      Having said that, I have spoken more times than I can remember to X, about the fact that one trade gone bad means no moolah at all, when going "all in". He says he's young and can start again. So be it. I know X, through private communication, and can tell you he is an outstanding, ethical young man, and is kind to the bone.

      I fret for him on these huge stake gambles. I don't want to be around when the 500,000 " all in" trade goes bad. It eventually does, but until then, hey, let's party....;-) Old DocReits trades his 20-100 contracts and the young bucks trade 1,888-7,000 contracts. I'm still here after 22 years of trading options. At their current geometric, asymptotic growth curve, they'll outstrip my net worth, at their current pace in just a few more years...( if they don't crash and burn) what do I know?


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