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Freeport-McMoRan Inc. Message Board

tlee22202 362 posts  |  Last Activity: 1 hour 33 minutes ago Member since: Apr 3, 2010
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  • Reply to

    The way to settle this gap issue...

    by solve1enigma Apr 14, 2014 2:14 PM
    tlee22202 tlee22202 Apr 14, 2014 10:02 PM Flag

    Google may actually end up doing this if the spread becomes too wide. They will have to determine the proper amount. Just enough to narrow the spread Too large a dividend would cause the spread to go the other way.

  • Reply to

    Any thoughts on the GOOG-GOOGL gap?

    by way2retire Apr 13, 2014 7:07 PM
    tlee22202 tlee22202 Apr 14, 2014 3:52 PM Flag

    The spread has now widened to $13 in favor of GOOGL.
    If GOOG does become the preferred trading issue, do you think this spread will narrow?

  • Reply to

    Where do we go from here?

    by remate71 Apr 13, 2014 6:03 PM
    tlee22202 tlee22202 Apr 14, 2014 3:34 PM Flag

    Because of the lower delta for the June calls, you will not get max profit if it were to quickly reach 50. This is why I have multiple strategies going for VXX using different months. I also like to scale in and out as the price fluctuates with open options and spreads. Even if I am not getting max profit on a spread, I will still close it out if it has a reasonable profit. In the example above, if the price were to quickly rise to 50, you would show a profit of over $300. A quick 45% profit would be good enough for me, considering the risk of playing the long side of VXX.

  • Reply to

    Where do we go from here?

    by remate71 Apr 13, 2014 6:03 PM
    tlee22202 tlee22202 Apr 14, 2014 1:43 PM Flag

    I am expecting some form of a correction within the next couple of months. I am reducing my risk by just using call spreads on VXX and keeping my target price at 50 or less. But 55.55 is a very real possibility due to the long time period since the last correction.

    Are you serious about holding the 20k shares until 555.55? You mentioned that you are all in. I presume you will not be adding to your long position if VXX declines.

    With VXX now at 44.55, you will make 24% if it rises to 55.55

    However, if you were to buy the June 35 calls, you will only be paying around 1.00 for time premium, but you will make 100% if it hits 55.55

    Even better, the June 35/50 call spread could now be bought for around 6.80 This would give you a breakeven price of 41.80 and max profit of 120% if it hits 50.

  • Reply to

    Any thoughts on the GOOG-GOOGL gap?

    by way2retire Apr 13, 2014 7:07 PM
    tlee22202 tlee22202 Apr 14, 2014 9:31 AM Flag

    The sampling period may be too short to come to a valid conclusion, but it appears that the spread will narrow during rallies and widen during declines. It saw it move between 13 and close to 0.00 last week. The trade is to go long GOOGL and short GOOG when the gap is very narrow. I will be doing this with options. It will be a bit tricky to put on due to the quick price fluctuations and the bid/ask option spreads, but it could end up being a very profitable trade. I am almost certain that at least some of the big traders are already doing this spread trade.

  • Reply to

    Where do we go from here?

    by remate71 Apr 13, 2014 6:03 PM
    tlee22202 tlee22202 Apr 14, 2014 9:04 AM Flag

    For the past 6 trading days, the market has been alternating between 2 days down and 2 days up. If this trend continues, I will be buying VXX and UVXY calls during this 2 day rally. With VXX at 44.75, the June 35/50 call spread could be bought for around 7.50 which is midway between the strikes and a couple of dollars below the share price. My goal is to buy the VXX June 30/45 call spreads for less than 8.00

  • tlee22202 tlee22202 Apr 12, 2014 11:09 AM Flag

    Take a look at the 5 day chart for last week comparing GOOG to GOOGL.
    On Wed when the shares were rising, the spread narrowed.
    On Thursday, when the selling began, the spread widened.
    On Friday morning when the selling continued, the spread appeared to be the widest for the week when the panic selling was near it's peak.

    When the stock is being sold off, especially during panic selling, it appears that the spread will widen. Is this because those who own both shares will most likely sell their GOOG shares before selling their GOOGL shares dues to the perception that they are of lesser value?

    When the stock price is rising, it appears that the spread will narrow. Is this because of the perception that they are getting a bargain due to the discounted price of GOOG relative to GOOGL?

  • Reply to

    Options trade

    by tlee22202 Apr 11, 2014 3:17 PM
    tlee22202 tlee22202 Apr 11, 2014 3:22 PM Flag

    It looks like someone had done the Jan2016, long 7.00 call / short 12.00 call spreads
    This looks like another good trade.

  • tlee22202 by tlee22202 Apr 11, 2014 3:17 PM Flag

    I found this good trade using the Jan2016 options.
    Long 3.00 call / short 7.00 call for a debit of around 1.45
    Max profit would be 2.55
    Your effective price per share would be 4.45

  • tlee22202 tlee22202 Apr 11, 2014 11:25 AM Flag

    This is what I have been saying since the split occurred. This morning at one point, the spread was $13.00
    I had bought some GOOG calls a few days ago by mistake. I ended up converting them to call spreads.
    Options is probably the cheapest way to play this spread.

  • Reply to

    Long GOOGL - short GOOG

    by tlee22202 Apr 3, 2014 9:33 AM
    tlee22202 tlee22202 Apr 11, 2014 9:55 AM Flag

    The spread has now widened to $13
    Is it possible that this spread will widen to $50? Maybe even $100?

  • Reply to

    VXX 4/10/14

    by goodoptday Apr 10, 2014 4:08 PM
    tlee22202 tlee22202 Apr 11, 2014 9:23 AM Flag

    Take a look at the 3 year chart for NUGT. Last year it had 2 reverse splits. There is a downward bias to the share price probably due to the use of options to maintain the 3x pricing. This would be similar to UVXY which declines because of contango.

  • Reply to

    FDA Approval is Not a Given

    by bullandbear1953 Apr 10, 2014 11:38 AM
    tlee22202 tlee22202 Apr 10, 2014 11:17 PM Flag

    Back in 2008, I was holding a long position in KERX with an average price of $7.
    When the bad news came, it dropped below $1 and stayed there for over one year. Of course after I had sold it at this low price, it then proceeded to rise to a high of over $17.
    So yes, they are capable of extreme price moves.

  • Reply to

    VXX 4/10/14

    by goodoptday Apr 10, 2014 4:08 PM
    tlee22202 tlee22202 Apr 10, 2014 10:47 PM Flag

    I noticed that Brian Kelly on Fast Money today had recommended UNG as a buy. He did not give any reasons for his recommendation.

    Have you been shorting NUGT? Being 3X, it is capable of very large daily moves.

  • Reply to

    Zack today shows downward BX quarter revision

    by sam_0534 Apr 10, 2014 10:02 AM
    tlee22202 tlee22202 Apr 10, 2014 1:49 PM Flag

    The gap has filled!

  • Reply to

    Zack today shows downward BX quarter revision

    by sam_0534 Apr 10, 2014 10:02 AM
    tlee22202 tlee22202 Apr 10, 2014 11:28 AM Flag

    The traders may be waiting for the 30.40 gap to be filled before they buy in again.

  • Reply to

    Option strategy for MNKD

    by tlee22202 Apr 9, 2014 10:17 AM
    tlee22202 tlee22202 Apr 9, 2014 11:32 AM Flag

    This is called a bull call spread. You are simultaneously long the 4 call and short the 7 call.
    This is considered a very conservative strategy because your effective cost per share is only $5.55
    This is also a play for capturing option time premium. In the event of some good news and the share price were to rally, you could close it out for an immediate profit. Also, in case of a price decline, you could close out your short call position for a profit and then just hold the long call position.

    There are hundreds of different possible option strategies. Try doing calculations for some different strategies based upon risk/reward.

  • Here is a strategy I recommended to my friends for MNKD. This is intended to supplement to their long position.

    Long Aug 4.00 call / Short Aug 7.00 call
    With MNKD at 6.80, this spread could be bought for a debit of around 1.55
    Your effective share price and breakeven price is 5.55
    You will make 93% if share price is above 7.00 by exp.

  • Today's volume is actually about average so it may not be.
    But I did add to my position at 16.22
    Scary, but you just have to buy when there is panic in the market.

  • tlee22202 tlee22202 Apr 7, 2014 2:40 PM Flag

    Are you saying that the HF traders actually take a directional position, such as being net short?
    I thought their advantage is just being able to front run the orders.

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