"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Post your picks for standard, trackable, fungible securities with published prices before the calendar changes to 2013, and let them run throughout the year.
I dont know much about bonds but it looks like it might be interesting. It could yield well if the quasi bailout continues or go to absolute zero if they default
Well, I bot S at a little over 2 earlier in the year, still got it and I'm going after it again. FB, thinking that those smart kids will figure a way to make it work, it's a new world out there and they only have about a bazillion eyes on their advertising. F is still good for me, I love the last of the solvent, old timey American auto makers...not a trip to the moon like my S was but I'm in and I'm still pizzed I didn't get it at 2...what a bozo. Silver, who can ignore a poor man's gold...lots of signs point up in my simple way of thinking. So, put me in coach.
Those Dart Throwers aren't invited this year are they?
MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Allright, I'll stick with last year's pick for most of it, and try this option spice on the nasdaq biotech ETF just to make it interesting and see how it plays out, since we're allowed to sell naked puts how can I not give it a shot?
Thanks for doing this again Wingsrule, looks like a big job with lots of interesting entries, best of luck to all in both your real and imaginary investments
Oh, how I love comments like this. The margin requirement for 1 short AAPL Jan 250 put is $2500.
FWIW---If AAPL is at about $500 this time next year I will have a return of about 98%. But like many have said before you, I don't know much. >>
Nope, guess again. And again I ask, what level options trading are you at since you have no clue? Generally, the requirements differ based on trading level. How are you even securing the position? As a basic primer, if you're securing it on a cash secured basis, you are required to carry the full potential cash obligation of the trade in your account. Thats $25k, NOT $2500. 1 contract is 100 shares, 100x250strike = 25k. At higher options trading levels and brokers, the burden can be less. As an example from Schwab its the following: (25% of the underlying stock’s market value + the option ask price – any out-of-the money amount) x 100 (per contract) x the number of contracts.
And yes, you don't know much as your 98% return again ignores the actual net return on the 9k balance. Even if you found some broker that would allow you to naked sell 1 250 AAPL put with the 9k cash balance(let alone 3 as you suggest for exposing the broker to a $75k obligation against your 9k cash, LOL) and you collect your $3 in premium. After one year, the stock is still above 250 and you keep your $3 premium and the option you sold expires worthless. Your account is now at $9300 from $9000 so you've only gained 3%+ despite the one position gaining 100%. You shouldn't confuse the net account gain with the position gain. Have you EVER sold naked puts before? I have.
For the contest, put me down for 50% AAPL shares and 50% TNA.
<< <i>Redtiger..anyone can trade the aapl puts for the same margin requirement. It matters not the size of ones account. >>
Of course the real question is why would you be foolish enough to cap your potential gain? Even in some magical world where some broker allowed you to naked sell 3 250 AAPL put contracts, your max gain given todays price of ~$3 means your net account value can only gain 10% MAX. So you've turned $9000 into $9900 which would've placed you in 11th place in last years contest. Worst case scenario would be having a negative balance of almost $70,000 which is why its so laughable for you even to suggest your trade as noone should be allowed to go negative let alone to that degree. Is there a booby prize if someone gets a negative return of over 500%? Lol.
Tiggs I think you're right that there needs to be some limit to the number of naked puts one can sell in this (hoping they expire worthless and you pocket the premium) but disagree ion the potential downside, yes theoretically Apple could go to zero in a year and he'd be on the hook for the [250 * 100 * X where X is the number of contracts] but realistically, it's not going to happen (AAPL going to zero), however if it drops below $250 for some reason, he'd get the stock put to him, meaning he'd have to buy it at $250 (offset by the premium he pocketed) but the stock would still be worth $230 or $180 or whatever it dropped to, but then he'd own the stock (and might be negative in his cash balance, as the guy who shorted sears holding was for a while last year) and the underlying might rebound by year's end. Alternatively, he'd buy the offsetting puts back at whatever they cost at the later time (12/31/13) and get out of it that way. I think that's what he's referring to with the margin or reserve balance required to make this trade, I'll be interested to know the number of naked puts we can sell for this, and how his balance looks as we go along, since he's selling puts he keeps his $9000 and also gets how much credit for selling how many put contracts?
Heeeeere we go! Edit: Since there are so many more contestants this year (2x+ compared to 2012), it looks like I'll need to find a better way to display the individual picks.
Initial margin requirement: 100% of option proceeds, plus 20% of underlying security value less out-of-the-money amount, if any minimum requirement is option proceeds plus 10% of the put’s aggregate exercise price (number of contracts x exercise price x $100) proceeds received from sale of puts(s) may be applied to the initial margin requirement after position is established, ongoing maintenance margin requirement applies, and an increase (or decrease) in the margin required is possible
Position Short 1 Jan 250 puts(s) at $3.00 Underlying stock at $530.00 Minimum applies in this case
Initial Margin Margin requirement: $2,800.00 Proceeds from sale of short put(s): $300.00 Margin call (SMA debit): $2,500.00
Also, I couldnt care less about the account balance. The strategy is to have the greatest % return on the investment. I fully expect AAPL to be greater than $250 at year end and my investment return should be nearly 100%. Thats the objective im going for--highest % return.
I could have done something like Baley and used the proceeds from the sale of the put to finance the purchase of a call. What would be my net investment then?
The goal is highest % increase in one calendar year. ----------From the OP. Highest % return, not highest $$$ return.
Wings should start with $10,000. He should get a head start for his time and effort.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>I guess I am naive...I do not understand how "betting" could ever be called "investment". >>
a gamble is a gamble no matter what you call it.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Initial margin requirement: 100% of option proceeds, plus 20% of underlying security value less out-of-the-money amount, if any minimum requirement is option proceeds plus 10% of the put’s aggregate exercise price (number of contracts x exercise price x $100) proceeds received from sale of puts(s) may be applied to the initial margin requirement after position is established, ongoing maintenance margin requirement applies, and an increase (or decrease) in the margin required is possible
Position Short 1 Jan 250 puts(s) at $3.00 Underlying stock at $530.00 Minimum applies in this case
Initial Margin Margin requirement: $2,800.00 Proceeds from sale of short put(s): $300.00 Margin call (SMA debit): $2,500.00 >>
Per your own math in terms of stating only $2500 margin requirement needed for 1 contract. 9k total cash hence can only 3 contracts total with $1500 left over. Your max gain is now capped at the proceeds from the puts so after one year thats still $9000 + $900 for the 3 contracts, 9900 total so net 10% gain for the year.
<< <i>Also, I couldnt care less about the account balance. The strategy is to have the greatest % return on the investment. I fully expect AAPL to be greater than $250 at year end and my investment return should be nearly 100%. Thats the objective im going for--highest % return.
I could have done something like Baley and used the proceeds from the sale of the put to finance the purchase of a call. What would be my net investment then?
The goal is highest % increase in one calendar year. ----------From the OP. Highest % return, not highest $$$ return. >>
And again, this shows how you have misread it. Its highest % return on the initial 9k investment. Your capped at 10% return total. FYI, highest $$$ return is the same as the highest % return in this case as everyone starts out with the same initial 9k.
<< <i>Tiggs I think you're right that there needs to be some limit to the number of naked puts one can sell in this (hoping they expire worthless and you pocket the premium) but disagree ion the potential downside, yes theoretically Apple could go to zero in a year and he'd be on the hook for the [250 * 100 * X where X is the number of contracts] but realistically, it's not going to happen (AAPL going to zero), however if it drops below $250 for some reason, he'd get the stock put to him, meaning he'd have to buy it at $250 (offset by the premium he pocketed) but the stock would still be worth $230 or $180 or whatever it dropped to, but then he'd own the stock (and might be negative in his cash balance, as the guy who shorted sears holding was for a while last year) and the underlying might rebound by year's end. Alternatively, he'd buy the offsetting puts back at whatever they cost at the later time (12/31/13) and get out of it that way. I think that's what he's referring to with the margin or reserve balance required to make this trade, I'll be interested to know the number of naked puts we can sell for this, and how his balance looks as we go along, since he's selling puts he keeps his $9000 and also gets how much credit for selling how many put contracts? >>
Realistically, I don't know of any US broker that would even open such an account with only 9k cash and allow the position let alone several contracts. If they did, he could easily get a margin call and the 9k would get wiped out of the account in a forced liquidation. So no, he wouldn't own the shares. Negative net account balances generally don't go over well. Of course, if he knew anything about options or traded in them, a far better option would be to go into a bull put spread but I digress.
<< <i>...derryb is up 8% and the markets haven't even opened for the year! >>
Off to a good start last year but it didn't hold.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Comments
Spreadsheet complete up to this point.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I'd like to get into the contest with 100% in 2 year greek bonds but I'm not sure if it will work within the rules.
I found a symbol GGGB2YR:IND on bloomberg . It looks like its meant to be a basket of different 2 year greek bonds.
greek 2 year bond benchmark
I dont know much about bonds but it looks like it might be interesting. It could yield well if the quasi bailout continues or go to absolute zero if they default
We'll give it a shot!
S 40%
F 30%
FB 15%
SLV 15%
XOM 30% @ $86.55
X 25% @ $23.85
Please reinvest dividends on all 3.
Edit:
Was told by WR it's ok to edit to put in the starting price only for my sake to keep track of. I will not edit again.
This might be the year they get gobbled up by their neighbors.
Thanks Wingsrule and Happy New Year everyone!
30% JOEZ
30% PPHM
30% HSOL
The Whisker Cheek Collection - Top 50 Peace VAM Registry
Landmark Buffalo Collection
all 9K in stock of STEM (Stem Cells Inc.)
Alll.. innnn.
$8000 in USLV and $1000 in GDXJ.. JUST SO DERRYB. CAN BEAT ME.
Now its time for a
I'm in this year.
Thanks much for doing this. I know it takes quite a bit of work and dedicated effort to pull it off.
I'll take:
25% FPX
25% LNCO
25% IP
25% RIMM
All with dividends reinvested.
CLCT
Apple
LULU 20%
Those Dart Throwers aren't invited this year are they?
MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
CME, LB. 30% up
CBOT (Corn) 33.3%
LTHU (Lithium tech corp.) 33.3%
Physical silver 33.3%
Click on this link to see my ebay listings.
CYH- COMMUNITY HEALTH SYSTEMS
PHM- PULTEGROUP
MO
LINE
CLCT
80% HALO
10% Sell Jan2014 IBB $115 Puts (IBB140118P00115000)
10% Buy Jan2014 IBB $115 Calls (IBB140118C00115000)
Thanks for doing this again Wingsrule, looks like a big job with lots of interesting entries, best of luck to all in both your real and imaginary investments
Liberty: Parent of Science & Industry
<< <i>100% AAPL >>
Can we start today?
Apple up $22, 4+%!
<< <i>
Oh, how I love comments like this. The margin requirement for 1 short AAPL Jan 250 put is $2500.
FWIW---If AAPL is at about $500 this time next year I will have a return of about 98%. But like many have said before you, I don't know much.
Nope, guess again. And again I ask, what level options trading are you at since you have no clue? Generally, the requirements differ based on trading level. How are you even securing the position? As a basic primer, if you're securing it on a cash secured basis, you are required to carry the full potential cash obligation of the trade in your account. Thats $25k, NOT $2500. 1 contract is 100 shares, 100x250strike = 25k. At higher options trading levels and brokers, the burden can be less. As an example from Schwab its the following: (25% of the underlying stock’s market value + the option ask price – any out-of-the money amount) x 100 (per contract) x the number of contracts.
And yes, you don't know much as your 98% return again ignores the actual net return on the 9k balance. Even if you found some broker that would allow you to naked sell 1 250 AAPL put with the 9k cash balance(let alone 3 as you suggest for exposing the broker to a $75k obligation against your 9k cash, LOL) and you collect your $3 in premium. After one year, the stock is still above 250 and you keep your $3 premium and the option you sold expires worthless. Your account is now at $9300 from $9000 so you've only gained 3%+ despite the one position gaining 100%. You shouldn't confuse the net account gain with the position gain. Have you EVER sold naked puts before? I have.
For the contest, put me down for 50% AAPL shares and 50% TNA.
<< <i>Redtiger..anyone can trade the aapl puts for the same margin requirement. It matters not the size of ones account. >>
Of course the real question is why would you be foolish enough to cap your potential gain? Even in some magical world where some broker allowed you to naked sell 3 250 AAPL put contracts, your max gain given todays price of ~$3 means your net account value can only gain 10% MAX. So you've turned $9000 into $9900 which would've placed you in 11th place in last years contest. Worst case scenario would be having a negative balance of almost $70,000 which is why its so laughable for you even to suggest your trade as noone should be allowed to go negative let alone to that degree. Is there a booby prize if someone gets a negative return of over 500%? Lol.
Liberty: Parent of Science & Industry
Please show me where I mention the number 3.
Short Put
Initial margin requirement:
100% of option proceeds, plus 20% of underlying security value less out-of-the-money amount, if any
minimum requirement is option proceeds plus 10% of the put’s aggregate exercise price (number of contracts x exercise price x $100)
proceeds received from sale of puts(s) may be applied to the initial margin requirement
after position is established, ongoing maintenance margin requirement applies, and an increase (or decrease) in the margin required is possible
Position
Short 1 Jan 250 puts(s) at $3.00
Underlying stock at $530.00
Minimum applies in this case
Initial Margin
Margin requirement: $2,800.00
Proceeds from sale of short put(s): $300.00
Margin call (SMA debit): $2,500.00
Knowledge is the enemy of fear
I could have done something like Baley and used the proceeds from the sale of the put to finance the purchase of a call. What would be my net investment then?
The goal is highest % increase in one calendar year. ----------From the OP. Highest % return, not highest $$$ return.
Knowledge is the enemy of fear
Double check my ratio. Should be split evenly in thirds. $3000 ea.
Happy New Year!
The Whisker Cheek Collection - Top 50 Peace VAM Registry
Landmark Buffalo Collection
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>I guess I am naive...I do not understand how "betting" could ever be called "investment". >>
a gamble is a gamble no matter what you call it.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
its how you manage it like everything else in life
thanks wings Happy New Year all
ps this could be a wreck waiting to happen but "nothing ventured nothing gained"
<< <i>I guess I am naive...I do not understand how "betting" could ever be called "investment". >>
I think the term "betting" is often used figuratively.
Knowledge is the enemy of fear
<< <i>let alone 3 as you suggest
Please show me where I mention the number 3.
Short Put
Initial margin requirement:
100% of option proceeds, plus 20% of underlying security value less out-of-the-money amount, if any
minimum requirement is option proceeds plus 10% of the put’s aggregate exercise price (number of contracts x exercise price x $100)
proceeds received from sale of puts(s) may be applied to the initial margin requirement
after position is established, ongoing maintenance margin requirement applies, and an increase (or decrease) in the margin required is possible
Position
Short 1 Jan 250 puts(s) at $3.00
Underlying stock at $530.00
Minimum applies in this case
Initial Margin
Margin requirement: $2,800.00
Proceeds from sale of short put(s): $300.00
Margin call (SMA debit): $2,500.00 >>
Per your own math in terms of stating only $2500 margin requirement needed for 1 contract. 9k total cash hence can only 3 contracts total with $1500 left over. Your max gain is now capped at the proceeds from the puts so after one year thats still $9000 + $900 for the 3 contracts, 9900 total so net 10% gain for the year.
<< <i>Also, I couldnt care less about the account balance. The strategy is to have the greatest % return on the investment. I fully expect AAPL to be greater than $250 at year end and my investment return should be nearly 100%. Thats the objective im going for--highest % return.
I could have done something like Baley and used the proceeds from the sale of the put to finance the purchase of a call. What would be my net investment then?
The goal is highest % increase in one calendar year. ----------From the OP. Highest % return, not highest $$$ return. >>
And again, this shows how you have misread it. Its highest % return on the initial 9k investment. Your capped at 10% return total. FYI, highest $$$ return is the same as the highest % return in this case as everyone starts out with the same initial 9k.
<< <i>Tiggs I think you're right that there needs to be some limit to the number of naked puts one can sell in this (hoping they expire worthless and you pocket the premium) but disagree ion the potential downside, yes theoretically Apple could go to zero in a year and he'd be on the hook for the [250 * 100 * X where X is the number of contracts] but realistically, it's not going to happen (AAPL going to zero), however if it drops below $250 for some reason, he'd get the stock put to him, meaning he'd have to buy it at $250 (offset by the premium he pocketed) but the stock would still be worth $230 or $180 or whatever it dropped to, but then he'd own the stock (and might be negative in his cash balance, as the guy who shorted sears holding was for a while last year) and the underlying might rebound by year's end. Alternatively, he'd buy the offsetting puts back at whatever they cost at the later time (12/31/13) and get out of it that way. I think that's what he's referring to with the margin or reserve balance required to make this trade, I'll be interested to know the number of naked puts we can sell for this, and how his balance looks as we go along, since he's selling puts he keeps his $9000 and also gets how much credit for selling how many put contracts? >>
Realistically, I don't know of any US broker that would even open such an account with only 9k cash and allow the position let alone several contracts. If they did, he could easily get a margin call and the 9k would get wiped out of the account in a forced liquidation. So no, he wouldn't own the shares. Negative net account balances generally don't go over well. Of course, if he knew anything about options or traded in them, a far better option would be to go into a bull put spread but I digress.
just a thought
–John Adams, 1826
<< <i>Thanks for doing this! I think you started me off with $83 more than everyone else. >>
And me with 7750 less.
You guys just needed a head start.
<< <i>...derryb is up 8% and the markets haven't even opened for the year!
Off to a good start last year but it didn't hold.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey