Disqus - Latest Comments for maximumleverage

Re: Stress Test Today

Max Leverage — Fri, 24 Apr 2009 11:37:05 -0000

It's rumored that the stress tests were designed t0 go easy on the big banks at the expense of the regionals. Also, I thought the public release wasn't for another week. (Naturally the results, if favorable, will be leaked.)

Re: Rebalance This

Max Leverage — Fri, 24 Apr 2009 04:38:37 -0000

I was actually thinking of playing the eventual melt down in the SPX by going ultra-long Treasuries, or long volatility, or both. It's really just a question of picking the right entry point. If only there were options chains on the 3x bear, I'd be writing naked calls on it right now.

Re: Rebalance This

Max Leverage — Thu, 23 Apr 2009 07:03:08 -0000

Direxion has launched 3x Treasury ETF's.

http://tinyurl.com/ckkg2t

With the lack of volatility in Treasuries (so far) these might be worth trading. Unfortunately, no options chains yet.

Re: More Technical Perspectives

Max Leverage — Fri, 17 Apr 2009 16:09:59 -0000

For retail investors who don't have enough stock to make a difference in shareholder votes, it's all speculation unless your ownership of stock translates to earnings (dividends) in the here and now. If dividends are or will soon be cut, you're speculating on the possibility of dividends being reinstated at some future date. The mass psychology of speculation translates to somewhat predictable patterns, just predictable enough to lure in more speculators trying to outguess the other speculators. Hence, stock prices go up in the worst business conditions of the last few decades. If the second, third, and later waves of speculators believe there is 'underlying demand' (previous waves of speculators), they'll stay in the game and bid stocks up much higher.

Re: The Twitter PULLBACK is at Hand.

Max Leverage — Fri, 17 Apr 2009 04:07:56 -0000

I am not sure, I think a simple initial interface and an accessible API led lots of people to create tiny killer apps that drew more people in, who create their mini killer apps... etc. Even a series of clever bon mots that attract the attention of a few dozen followers is a micro killer app in Twitter.

There's a tendency to geometric growth as long as the network accommodates all newcomers. Since Twitter is pretty open, I don't see a pullback in Twitter unless it's pulled down by the greater Web, like a hot stock getting pummeled on a major leg down in the SPX.

There's a natural advantage to bigness, users prefer a big social space that everyone in the world plays in to multiple non-intersecting spaces, although the latter is better for aggregators (i.e. dedicated clients). Aggregators don't see the kind of explosive growth that a simple web site can; you don't have to install anything to hop on a web site.

It's Twitter's game to lose. All they have to do is keep up with evolving user expectations.

Re: The false Chinese driven rally in copper

Max Leverage — Thu, 16 Apr 2009 22:54:50 -0000

China moving to a copper standard?

http://www.telegraph.co.uk/...

Save your pennies...

Re: What A Day For .....GOOG Options

Max Leverage — Thu, 16 Apr 2009 16:12:12 -0000

That 400/420/430 1/3/2 call spread is looking really good. Unless you get disastrous earnings from C, GE, GOOG looks set to open at the 410-420 range tomorrow, and that spread should be worth 10 easy, up from 2.8. Good call from Steve Smith.

Re: Breaking: Buying Options Sucks

Max Leverage — Thu, 16 Apr 2009 13:17:31 -0000

"THAT is the part I'm trying to wrap my head around..."

By adjusting the spread that way, you get as much cash back as possible betting against a big move, but no matter what happens you can't lose more than what you put in. What you're really doing is selling X narrow call spreads (maximum loss X), and buying one wide call spread spanning $X (maximum gain X).

Re: Breaking: Buying Options Sucks

Max Leverage — Thu, 16 Apr 2009 12:55:21 -0000

If you're just using option selling to juice up a stock trade, that is selling options you're willing to have assigned and collecting the premium, I think it's a low risk strategy for an active trader. Gives you some wiggle room thanks to time decay, and you can still use all the risk management techniques you'd use on the underlying.

Maybe you've seen that MIT analysis of hedge funds where they observe a hedge fund can exclusively sell deep OTM uncovered calls, model the blowup as a 25-sigma event, and market itself as a low risk investment vehicle... it's the institutionalized Rio trade.

Re: Breaking: Buying Options Sucks

Max Leverage — Thu, 16 Apr 2009 12:43:12 -0000

I like it a lot. OPEX directional plays are priced in, and crowded; spreads like this let you bet on a direction at a lower cost than the competition.

Re: Google On Deck

Max Leverage — Thu, 16 Apr 2009 08:14:39 -0000

Net credit ratio spreads. That's what I'm looking at.

Re: Scandal: Weil Gotshal Demands $55 Million For 4.5 Months Of Lehman Liquidation Work

Max Leverage — Thu, 16 Apr 2009 05:29:23 -0000

Check out a cost plus construction project sometime... this behavior isn't exactly unique to lawyers either.

Re: The Dow's Weight In Gold

Max Leverage — Thu, 16 Apr 2009 02:36:12 -0000

I'll go out on a limb here and say that if economic activity falls off a cliff like it seems poised to, gold isn't going to be worth much. Likewise if They jumpstart the economy, other commodities will benefit much more from the resulting inflation than gold. Gold is really about insurance/protection from Governments Gone Wild; most of the time, you're better off using the scraps of paper they print up. Since the gold:DJIA ratio has gone up dramatically since Clinton left office, I think one has to be wary of a significant retrace in this ratio. Again... I'd be looking at other commodities. China's buying oil and base metal mining capacity, not gold miners.

Re: Scandal: Weil Gotshal Demands $55 Million For 4.5 Months Of Lehman Liquidation Work

Max Leverage — Thu, 16 Apr 2009 02:27:09 -0000

Some other hard workers:

Garrett Fail, admitted 2004, billed $530-$580/hr for over 1150 hours;
Naomi Munz, admitted 2006, billed $570-$630/hr for over 770 hours;
Cassie Waduge, admitted 2007, billed $355-$415/hr for over 870 hours;
Sunny Singh, admitted 2007, billed $415-$465/hr for over 930 hours;
Amanda M. Hendy, admitted 2008, billed $355/hr for 1012 hours;
Christopher A. Stauble, paralegal, billed $210/hr for over 900 hours;
John A. Ellsworth, paralegal, billed $205/hr for over 900 hours.

I'm guessing if you took any of them aside and asked, "So, what is it exactly you did in that case?" while it's still fresh in their minds, they wouldn't have much to tell you about what they did to justify several hundred dollars an hour. But at that age, they're so cute! It's hard to stay mad at them.

Re: Stopped out of FAZ @ 9.85

Max Leverage — Wed, 15 Apr 2009 21:53:15 -0000

If you'd put that 22K in FAS and FAZ at inception (November '08), it'd be worth less than 4K now. It only makes sense to buy into both if a big move is coming soon, but you don't know which way. If you "know" that financials are about to rocket upwards, why would you bother with FAZ at all?

An arb means you are taking free money off the table, but there's no free money here. You're making a particular kind of directional bet when you're putting equal amounts of money into FAS and FAZ.

Re: CNBC Banned from Stocktwits

Max Leverage — Tue, 14 Apr 2009 21:23:55 -0000

The tizzy over StockTwits is really funny considering that what you've done is to reinvent the chat room - one general chat room and thousands of topic-restricted chat rooms - layered on top of the Internet trend du jour, Twitter. Not that I'm putting you down. Grabbing a tiger by the tail deserves recognition.

What all this fuss really says to me is that Twitter is huge. For the MSM to attack StockTwits while driving viewers to Twitter shows some pretty serious cluelessness.

Re: New Indicator We Can Soon Hyper Analyze

Max Leverage — Tue, 14 Apr 2009 13:19:47 -0000

I like it, but they need a better name for it. "Option Skew Index", OSI, works for me. Just hurry up and bundle it into a CBOE futures product so I can sell strangles on it.

Re: Long at 9.40

Max Leverage — Mon, 13 Apr 2009 14:10:47 -0000

Since this is an extremely short term trade, wouldn't it make more sense to buy in the money XLF April puts (with stops)? You'd get even more leverage. XLF April 13 puts cost 2.00, that's better than 5-1 gearing.

Re: The end will be astonishing !

Max Leverage — Sat, 11 Apr 2009 22:23:49 -0000

Check out covestor.com. They can publish all your trades in real time for free - alternatively you can allow people to piggyback on your trades and collect commissions from your followers.

I can't believe you aren't all over this.

Re: The end will be astonishing !

Max Leverage — Sat, 11 Apr 2009 14:37:48 -0000

There's more to these gaps than just a coin toss. The big gaps we've been seeing every day for the past two weeks indicate prices are being set at the margin; there is no real support for this rally.

Re: Twitter Eats World

Max Leverage — Wed, 08 Apr 2009 19:46:07 -0000

Covestor is way better at this (in theory; I haven't tried them) in that it not only supports online chest pounding, it also lets people tag along and execute your trades alongside you, paying you fees for the privilege.

Of course there's the risk that some entity will abuse social investing platforms to get people to take the opposite side of its trades, but first covestor has to get popular enough for abuse to be profitable.

Anyway, I agree with a recent guest commentator on Naked Capitalism who said radical financial transparency is needed, and Twitter integration is baby steps in that direction.

Re: Covered remaining 50% ES / SP @ 811

Max Leverage — Tue, 07 Apr 2009 17:39:09 -0000

The uptick rule isn't a short selling ban. In theory, it is supposed to prevent short selling waterfalls and reduce volatility.

(If you want to play the uptick rule, consider selling VIX calls.)

Re: Opening Day Foreclosure Special

Max Leverage — Mon, 06 Apr 2009 22:08:28 -0000

Re: covered 10% more ES / SP @ 819.5

Max Leverage — Mon, 06 Apr 2009 18:58:51 -0000

Right, stockholders are going to pre-emptively bail to avoid taking a haircut, they're not going to be able to go to the marketplace to raise new debt. So the question is whether they'll be considered deserving of a bailout, and that's where all the hot money will be placing its bets, once GE shares get into the $3-$5 range.

Re: covered 10% more ES / SP @ 819.5

Max Leverage — Mon, 06 Apr 2009 13:44:43 -0000

It has to get down to the sub-$5 range to bottom out, at which point it can't dilute any more. At that point it's all about government bailout action.

Wonder if AIG wrote credit default swaps on GE bonds?