I believe that current market rally will continue for a while, however I’m pretty confident that there will be a pretty good correction at the end. Predicting when this will happen in the tough part. Monday I saw the opportunity to play it both ways. I bought SPY at 116.65, sold-to-open S117 calls expiring this Friday at .78, and for every call I …
SPY’s 2010 price path for the 8th of October is about 3 points higher that the 2004 trend top line, but that is consistent with 2010’s considerably higher volatility. Recently there have been articles noting relatively low trading volumes, but compared to the normalized volume in 2004 (which at an absolute level was about 3.5x lower) volumes don’t look out of line. The rally that …
The recent report from the SEC and the Commodity Futures Trading Commission on the Flash Crash fingers an automatic sell program executed by a “Mutual Fund Complex” as the trigger of the crash. Starting at 2:32 p.m. EDT on the 6th of May this program, referred to as the “Sell Algorithm” automatically sold short 75,000 E-Mini S&P futures contracts (approx 4.1 Billion dollars worth, equivalent …
I’m back into USO after selling my shares and buying back my 24-September S33 calls last Friday for a net credit of $32.97 per share. Bought USO this morning at 33.01, sold-to-open S33 calls at $0.44. Breakeven is 32.57, maximum profit is $0.43 per share. Best case this is a 1.3% return for a 5 day investment.
Some people have been hyperventilating about the high short interest many ETFs are showing. XRT for example recently had 95 million shares in short interest with only 17 million shares in shares outstanding. If you want a detailed response to these fearmongers I found this article to be very helpful. If all of the people that were short XRT decided that they wanted …
