Thought it had something to do with the Chinese government cracking down on stocks, such as forcing banks to prevent people from borrowing money to buy stocks.
Slew Foot
Lifer
- Sep 22, 2005
- 12,379
- 96
- 86
Anyone hear of this (something from another website):
there is a historical correlation between today?s record volume (4.24 Bln. shares, previous record 3.8 Bln. shares) and the crashes of 1929 and 1987. Both 1929 and 1987 crashes were preceded, by two days, by a NEW record volume day. If today bore any historical correlation, and I believe it likely will, the big fall will be THURSDAY.
there is a historical correlation between today?s record volume (4.24 Bln. shares, previous record 3.8 Bln. shares) and the crashes of 1929 and 1987. Both 1929 and 1987 crashes were preceded, by two days, by a NEW record volume day. If today bore any historical correlation, and I believe it likely will, the big fall will be THURSDAY.
Slew Foot
Lifer
- Sep 22, 2005
- 12,379
- 96
- 86
OUCH, asian markets down another 3-7% in early trading.
Slide getting worse:
http://biz.yahoo.com/rb/070227/markets_global.html?.v=4
Miramonti
Lifer
- Aug 26, 2000
- 28,653
- 100
- 106
Program trading curbs were in effect this morning due to the dow opening down more that 150 points from yesterdays close.
Man, China is insane. Up almost 4% even after that 9% lost.
They are so freaking overheated that people rushed out and bought even more since prices had gone down. They are going to crash really big sometime soon.
They are so freaking overheated that people rushed out and bought even more since prices had gone down. They are going to crash really big sometime soon.
iversonyin
Diamond Member
- Aug 12, 2004
- 3,303
- 0
- 76
Doesn't seem to be staying higher, however. Markets opened at +60 and, after just 15 minutes, it's already come down to +15.
funboy6942
Lifer
- Nov 13, 2001
- 15,368
- 418
- 126
Im waiting for the next massive crash to hit bringing stocks down to pennies, then I can afford to buy a butt load of them with all my pennies. When it finally rises again, will become a millionaire and jump ship ASAP with my millions. I am actually ready for a recession, all my stuff is paid for, I have no credit cards, house payments, or car payments, so bring it on I say. As soon as it hits its low Im gonna jump in and take it near the top and jump off, wont be too greedy 
In the mean time, I think I might want to learn to speak Chinese.
In the mean time, I think I might want to learn to speak Chinese.
It's still early, wait till afternoon to see how things unfold. I predict it should be up in the late trading hours.
iversonyin
Diamond Member
- Aug 12, 2004
- 3,303
- 0
- 76
Looks natural to me, but I could be wrong. I can't imagine he dyes his hair but is too lazy to dye his beard.
can you give me some helpful pointers on options trading and writing covered calls?
any info would be appreciated
Golgatha
Lifer
- Jul 18, 2003
- 12,400
- 1,076
- 126
Nothing really tricky about it, I wrote a covered call on the March $20 strike price call options. Essentially, I sold short a quantity of 10, March $20 call contracts while keeping ownership of 1000 shares of Intel stock. This allows me to keep ownership of my stock and make some money while the stock drops in price since I get the time premium from the time of the short sell, which was about $0.20*1000 or $200.
What this does is guarantee I'll make money while the stock decreases in value (and I still get to keep my stock unless the options are exercised) and the short sell also increases in value as the time value drops day by day. Now the reason I ran into a snag when the price dropped below $20 is because my call options now only have time value left and won't continue increasing in value since the call only has time value left in it. At this point I have two choices (if I believe the stock will decrease more, which is my supposition here). I can write put contracts to preserve the value of my stock that I own, or I can sell short 10 more contracts at the next strike price down.
Now the next strike price down at $17.50 has almost no time value, but the $22.50 March put options also have almost no time value. I actually changed my mind on shorting the $17.50 calls because if the stock eventually rebounds or has some awesome news, then I can just keep on loosing money (actually breaking even day to day because the stock increases and short call option decreases at nearly the exact same rate). I opened 10 March $22.50 put options, so that I am guaranteed to not loose value in the stock (except for the premium which amounts to about $80-$90 with fees).
To summarize, I am basically sitting pretty as long as the stock price stays below $20.
1) Up until March 16th my short March $20 calls will increase in value each day due to time value loss, provided the stock's price stays under $20. Max profit is ~$180 due to fees.
2) If the stock price continues to drop, then my March $22.50 puts increase in value while my stock decreases in value, essentially breaking even and I lose the premium I paid at the end. Max loss here is ~$80-$90 due to lost premium. Again this assumes the stock stays below $20.
3) I retain ownership of my stock, have voting rights, and get paid dividends.
Risks above $20/share price.
1) If the stock increases past $20, then I'll need to sell the puts (sell to close 10 contracts), because at that point my short sold calls will begin decreasing in value along with the long $22.50 puts, so I'll have a loss of double the gain that my shares of stock would make. So if the price shot up say $2.00 overnight, then I'd lose twice what I made on the stock above the $20 mark. That would suck, but it's a risk I'm willing to take given the current market conditions.
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