I am thinking of doing a 3 way call spread. With UVXY around 28.75, sell March 30 call, buy March 29 call, sell March 50 call for a net credit of around 5.00
At exp, profit would be 6.00 with UVXY between 30-50. Profit would be 5.00 with UVXY under 29. Breakeven with UVXY at 56. Loss would begin with UVXY above 56.
This is an extensive article posted in Seeking Alpha on 12-13-2014.
The author feels CZR is now a buy with the potential to rise to $60.
He has a few recommendations for a reconstituted Caesars which includes selling the weakest properties and doing a prepackaged bankruptcy.
You may also want to read the comments for this article.
In 1990, the Wall Street Journal had disclosed that Donald Trump was in imminent defalult at Trump Castle Casino. Donald Trump had surreptitiously borrowed 3 million from his father Fred Trump to help him make a 18.4 million Castle Casino bond payment. A week before Christmas, Trump had Howard Snyder, an attorney for his father, walk into the Castle, go up to a cashier's window, and buy 3 million in chips and leave with those chips. With that 3 million, Trump had the money he needed to make the bond payment.
This was probably better than just directly borrowing the money from his father. By waiting to cash in the 3 million in chips at some future date, the casino would show an immediate profit which in turn would provide further confidence to the bond and shareholders.
The fact that large institutions or funds own a stock should not be a vote of confidence. Consider DNDN which just a few years ago was trading over $50. It recently went BK and is now trading under 25 cents. A lot of large institutions and funds rode this stock all the way down to BK. However, DNDN was only a very small % of their holdings, some as low as 0.1%
CZR is only around 1% of the holdings owned by Omega. For a retail investor having a portfolio with worth 100K, this would only amount to a risk of 1K. For a portfolio similar to funds holding over 1000 different stocks with CZR as 0.1%, this would only amount to a risk of $100. If CZR is only 1% or less of your portfolio, then it would not make any significant impact if it were to go BK. Maybe this is why the large holders are not concerned. This would just be considered the cost of diversification.
Unless CZR is a very small % of your portfolio, then you should be concerned about the risk.
S&P is down AH but still higher than yesterday's close. UVXY now at 29.18 AH.
Lower highs and lower lows for 2 weeks. Today's low of 22.95 is the same as yesterday's. Lets see if the traders will become bullish if this level can hold.
The share price of USO has decayed over the years as a result of Contango. USO does not actually own oil but instead relies upon oil futures contracts. In a contangoed market, when the futures prices are higher than the spot price, USO loses money each time it rolls contracts to a costlier later-dated contract by selling low and buying high. Eventually, it will have to do a reverse split to survive. For an extreme example of contango, take a look at the historical chart for UVXY.
Big move up for financials this week. C and XLF are at new highs. I have calls on BAC. Will 2015 be the year for financials?
There is a lot of volatility here so you may get whipsawed. It looks like a descending triangle is being formed. Although this pattern is generally bearish, the breakout in this case could go either way. I am considering scaling into a longer term position at this level but don't want to have a severe drawdown should oil fall down to around 50. I am thinking of buying OTM Jan2016 or Jan2017 call spreads. The drawdown would be minimal but with the potential to make around 300% profit. I would be doing this with the intent to add to my position with correspondingly lower strike spreads as the price declines.
Since they are trying for a location less than 1 hour from NYC, it should be a success. The casino Maryland Live, which is located between Baltimore and DC is do such good business that they are paying the state of Maryland around one million dollars per day in taxes.
Everyone should care. Commodities has the potential to go through extreme overbought/oversold conditions. These opportunities should not be missed.
Caesars Entertainment is a holding company, consisting of three primary units.
(1) Caesars Entertainment Resort Properties
(2) Caesars Growth Partners
(3) Caesars Entertainment Operating Company
It appears that Caesars Entertainment Operating Company is the unit which may file for Chapter 11 bankruptcy protection. I presume that the holding company CZR itself will not be filing for bankruptcy. Is this correct?
I remember back in Dec 1998 when oil was $10.86/barrel. Some of my friends bought in and did very well. I was too busy with my job at the time and did not want to get into the futures market. In hindsight, with oil being so cheap, I should have just bought a couple of futures contracts for cash and not worry about the margin.
"ETF Spotlight: United States Oil (USO) and Oil Futures Spot Price -- Can Investors Find A Sweet Spot?"
This is a more comprehensive article about when USO sometimes outperform the spot oil price and how to take advantage of this occurrence.
Let's estimate that for 2014, the net imports accounts for 25% of the oil consumed in the US. OPEC knows that this number is heading towards 0%.
If OPEC could drop the price to $50 and maintain this as a new reference standard, they could force many of the oil operations in the US to just shut down. This could then result in the net imports to rise to 50%.
For the Saudis, they would be happy with this number because 50% at $50/barrel would be the equivalent of 25% at $100/barrel
I found this info on the FXY site:
"JPMorgan Chase Bank, the depository for the trust, maintains a deposit account denominated in Japanese yen. Interest earned by the trust, if any, will accrue daily and will be used to pay trust expenses. Any excess interest will be distributed to shareholders monthly. If the trust’s expenses exceed interest earned, the trustee will withdraw Japanese yen held by the trust to pay the excess, thereby reducing the number of Japanese yen per share."
Since futures are not being used, you will not have the problems found in YCS.