My Stock Value Strategy Starts Now (2 Viewers)

[St. Louis Bob]

Oh and come on $2.30.

 

[Mark Davis]

Oh and come on $2.30.

Did you get it? I show a few trades at $2.30.

 

[St. Louis Bob]

Oh and come on $2.30.

Did you get it? I show a few trades at $2.30.

Damn, no.

 

[The Sniper]

Profit today = $448 (PRGN)

Year to date profit = $17,565

I hold these positions into tomorrow:

7,000 shares of UCO @8.70 (added 1,000 shares today)

1,000 shares of ESEA @5.49

2,500 shares of EXM @8.25

3,000 shares of SBLK @3.04

At current prices, I am upside down on these securities to the tune of $6,650. As I type this, I am riding this out without stop losses. I hate being upside down, but frankly don't believe the evaluations are correct. I have 6,000 shares set to sell when UCO hits 9.25. I am not going to put sell orders in on Dry Shipping until the BDI shows signs of slowing down.

Now down by about $11,500. Gulp.

Now a loss of about $12,500. Hope he's not watching this.

At the risk of being called a buzzkill, the loss is now ~ $14,500. I'm long oil myself, so this is not fun.

 

[Random]

I found this at the UCO message board on yahoo. It explains why UCO sucks went down today but oil went up. Hope it helps.

I hope this thread is helpful to some people, and I have also have a question I hope someone can answer. So I hope folks respond in the spirit this is written - it's meant to be educational and helpful to investors in UCO including myself, and I hope it avoids a lot of yelling at other people that (you think) know less about UCO than you do. "Read the prospectus" is good advice, but even after doing that, I'm sure some folks could use additional help.

First, here's my understanding of UCO. As people have pointed out, UCO is based on underlying oil futures. So the current (spot) price of oil or even next months futures price of oil does not impact UCO's daily price. UCO holds oil futures that are more like two months out or longer. You can see UCO's daily holdings at:

http://www.proshares.com/funds/uco.html?...

Each month, UCO has to "roll over" its holdings. Which means it swaps each nearer term options (say April futures) for further out options (May options). It does this on a continual basis at the same time each month, so UCO’s price is ALWAYS based on oil futures.

When there is contango (whereby farther out oil futures are higher priced than nearer-in oil prices), UCO has to effectively roll over each month from LOWER priced futures to HIGHER priced futures. This is expensive / costly and puts downward pressure on UCO. In other words, if the price of oil in March is lower than in April (“contango”), then when UCO each month rolls from March futures to April futures, it's effectively selling a lower priced future and buying a higher priced future -- and it loses this spread between the two in terms of downward pressure on UCO price.

You can see what "contango" means by going to yahoo quotes and typing in the next few months of US Oil futures:

CLH09.NYM

CLJ09.NYM

CLK09.NYM

Today, the price of spot and March futures jumped big, BUT the price of April / May futures dropped. Effectively investors are saying, “Okay, demand is low today -- but not so low that the current price should be as low as it was yesterday. Therefore, the current / March price went up big time today. But they are ALSO saying that the current demand will STAY at current low levels for the next few months that the oil futures several months out shouldn't be as HIGH as they were yesterday. So April / May went down bigtime. This crushes UCO because it's based on the futures several months out (as several people have pointed out).

Finally, it appears the forward futures got crushed today because there is so much excess inventory in the US strategic reserve (that's growing each week – and includes the Cushing facility everyone keeps talking about). People think this US oversupply will still exist in April / May and so those future prices went down.

So here's my question: If you look at UCO's current holdings at:

http://www.proshares.com/funds/uco.html?...

Yes, they hold a lot of CLK9 (May futures), but their biggest holding is DJ-AIG SWAP.

Does anyone know what the underlying holdings for "DJ-AIG SWAP" are. In other words "DJ-AIG SWAP" itself is an index of futures (I believe) -- so does anyone know what the composition of those futures across the next 2/3/4/etc. months is?

Hope that was helpful to some, and I appreciate in advance any answers folks may have to my question. Thanks and good luck.

 

[Cromedog]

I found this at the UCO message board on yahoo. It explains why UCO sucks went down today but oil went up. Hope it helps.

I hope this thread is helpful to some people, and I have also have a question I hope someone can answer. So I hope folks respond in the spirit this is written - it's meant to be educational and helpful to investors in UCO including myself, and I hope it avoids a lot of yelling at other people that (you think) know less about UCO than you do. "Read the prospectus" is good advice, but even after doing that, I'm sure some folks could use additional help.

First, here's my understanding of UCO. As people have pointed out, UCO is based on underlying oil futures. So the current (spot) price of oil or even next months futures price of oil does not impact UCO's daily price. UCO holds oil futures that are more like two months out or longer. You can see UCO's daily holdings at:

http://www.proshares.com/funds/uco.html?...

Each month, UCO has to "roll over" its holdings. Which means it swaps each nearer term options (say April futures) for further out options (May options). It does this on a continual basis at the same time each month, so UCO’s price is ALWAYS based on oil futures.

When there is contango (whereby farther out oil futures are higher priced than nearer-in oil prices), UCO has to effectively roll over each month from LOWER priced futures to HIGHER priced futures. This is expensive / costly and puts downward pressure on UCO. In other words, if the price of oil in March is lower than in April (“contango”), then when UCO each month rolls from March futures to April futures, it's effectively selling a lower priced future and buying a higher priced future -- and it loses this spread between the two in terms of downward pressure on UCO price.

You can see what "contango" means by going to yahoo quotes and typing in the next few months of US Oil futures:

CLH09.NYM

CLJ09.NYM

CLK09.NYM

Today, the price of spot and March futures jumped big, BUT the price of April / May futures dropped. Effectively investors are saying, “Okay, demand is low today -- but not so low that the current price should be as low as it was yesterday. Therefore, the current / March price went up big time today. But they are ALSO saying that the current demand will STAY at current low levels for the next few months that the oil futures several months out shouldn't be as HIGH as they were yesterday. So April / May went down bigtime. This crushes UCO because it's based on the futures several months out (as several people have pointed out).

Finally, it appears the forward futures got crushed today because there is so much excess inventory in the US strategic reserve (that's growing each week – and includes the Cushing facility everyone keeps talking about). People think this US oversupply will still exist in April / May and so those future prices went down.

So here's my question: If you look at UCO's current holdings at:

http://www.proshares.com/funds/uco.html?...

Yes, they hold a lot of CLK9 (May futures), but their biggest holding is DJ-AIG SWAP.

Does anyone know what the underlying holdings for "DJ-AIG SWAP" are. In other words "DJ-AIG SWAP" itself is an index of futures (I believe) -- so does anyone know what the composition of those futures across the next 2/3/4/etc. months is?

Hope that was helpful to some, and I appreciate in advance any answers folks may have to my question. Thanks and good luck.

Glad this is so simple...I can tell you one thing for sure UCO will not move today.

 

[Lord of Football]

Premarket UCO at 6.74

 

[Mose]

What is up with Sirius? Should everyone jump in now that bankruptcy isn't gonna happen? SIRI is up over 100% premarket.

 

[eoMMan]

DXO

Pre-Market: 2.04 -0.32 (-13.56%) - Feb 17, 9:11AM EST

If there was ever a time to get in on an oil play, today is that time.

 

[eoMMan]

What is up with Sirius? Should everyone jump in now that bankruptcy isn't gonna happen? SIRI is up over 100% premarket.

Liberty Media loaned them money.

 

[Mose]

What is up with Sirius? Should everyone jump in now that bankruptcy isn't gonna happen? SIRI is up over 100% premarket.

Liberty Media loaned them money.

Yea, but shouldn't this dillute the stock with additional shares? Why is it up 100%?I'm debating on jumping in in the next few minutes for a quick buck.

 

[Keerock]

What is up with Sirius? Should everyone jump in now that bankruptcy isn't gonna happen? SIRI is up over 100% premarket.

Liberty Media loaned them money.

Yea, but shouldn't this dillute the stock with additional shares? Why is it up 100%?I'm debating on jumping in in the next few minutes for a quick buck.

Buy the rumor, sell the news. The open will likely be the day's high.

 

[Mose]

What is up with Sirius? Should everyone jump in now that bankruptcy isn't gonna happen? SIRI is up over 100% premarket.

Liberty Media loaned them money.

Yea, but shouldn't this dillute the stock with additional shares? Why is it up 100%?I'm debating on jumping in in the next few minutes for a quick buck.

Buy the rumor, sell the news. The open will likely be the day's high.

So I should short it then?

 

[Keerock]

What is up with Sirius? Should everyone jump in now that bankruptcy isn't gonna happen? SIRI is up over 100% premarket.

Liberty Media loaned them money.

Yea, but shouldn't this dillute the stock with additional shares? Why is it up 100%?I'm debating on jumping in in the next few minutes for a quick buck.

Buy the rumor, sell the news. The open will likely be the day's high.

So I should short it then?

I haven't looked at it, but I wouldn't touch it

 

[Mark Davis]

Premarket UCO at 6.74

I feel the same way. The next covered calls I write will have to have a strike of 8 instead of 9 to get any value. Now it's all about reducing my basis as best as possible to limit the downside.

 

[Mose]

I shorted 20,000 shares of SIRI at .22 just now.

 

[PatsWillWin]

DOW drops 200 points in the opening 10 minutes.

 

[FavreCo]

What is up with Sirius? Should everyone jump in now that bankruptcy isn't gonna happen? SIRI is up over 100% premarket.

Liberty Media loaned them money.

Yea, but shouldn't this dillute the stock with additional shares? Why is it up 100%?I'm debating on jumping in in the next few minutes for a quick buck.

Buy the rumor, sell the news. The open will likely be the day's high.

So I should short it then?

Tell me you are just joking. Short a 10 cent stock. I thought I had heard it all and then you asked that.

 

[FavreCo]

I shorted 20,000 shares of SIRI at .22 just now.

 

[St. Louis Bob]

Oh and come on $2.30.

Did you get it? I show a few trades at $2.30.

Damn, no.

Holy crap.I got my 1500 shares.AT $2.09

 

[Mose]

Tell me you are just joking. Short a 10 cent stock. I thought I had heard it all and then you asked that.

Nope, I did.

 

[Mose]

I shorted 20,000 shares of SIRI at .22 just now.

? please elaborate.

 

[Mark Davis]

I shorted 20,000 shares of SIRI at .22 just now.

? please elaborate.

How much are you trying to make? Risk/reward seems out of whack on that trade to me.

 

[FavreCo]

Tell me you are just joking. Short a 10 cent stock. I thought I had heard it all and then you asked that.

Nope, I did.

While this may work for you, you are simply gambling. Eventually you will lose all your $ with this technique. You have no idea what is going on with the company. You are simply making a bet. A proven losing technique as far as investing.

 

[Mose]

Tell me you are just joking. Short a 10 cent stock. I thought I had heard it all and then you asked that.

Nope, I did.

While this may work for you, you are simply gambling. Eventually you will lose all your $ with this technique. You have no idea what is going on with the company. You are simply making a bet. A proven losing technique as far as investing.

oh, I agree. I won't be in it by lunch today. I stated in my first post it was just a quick buck type thing for a few bucks.I'm mainly a mutual fund type guy.

 

[Mose]

I shorted 20,000 shares of SIRI at .22 just now.

? please elaborate.

How much are you trying to make? Risk/reward seems out of whack on that trade to me.

I have under $4500 invested, if I get $500-$1000 in a few hours I will be jumping for joy. If it goes up to 25 cents, I'm out. with my $600 loss.

 

[Sand]

Tell me you are just joking. Short a 10 cent stock. I thought I had heard it all and then you asked that.

Nope, I did.

While this may work for you, you are simply gambling. Eventually you will lose all your $ with this technique. You have no idea what is going on with the company. You are simply making a bet. A proven losing technique as far as investing.

Didn't you just pretty much define this whole thread?

 

[FavreCo]

Tell me you are just joking. Short a 10 cent stock. I thought I had heard it all and then you asked that.

Nope, I did.

While this may work for you, you are simply gambling. Eventually you will lose all your $ with this technique. You have no idea what is going on with the company. You are simply making a bet. A proven losing technique as far as investing.

oh, I agree. I won't be in it by lunch today. I stated in my first post it was just a quick buck type thing for a few bucks.I'm mainly a mutual fund type guy.

Way too much risk for me....either side.

 

[Mose]

Way too much risk for me....either side.

I'm hoping this horrible decline overall today will bring SIRI back down soon. It is already down to .19 from the .22 I bought at 15 minutes ago.

 

[FavreCo]

Tell me you are just joking. Short a 10 cent stock. I thought I had heard it all and then you asked that.

Nope, I did.

While this may work for you, you are simply gambling. Eventually you will lose all your $ with this technique. You have no idea what is going on with the company. You are simply making a bet. A proven losing technique as far as investing.

Didn't you just pretty much define this whole thread?

Yeah I did, huh? I'm actually still standing at the FAS table waiting to make a bet. Everyone roll craps out though. FAZ table is on fire.

 

[FavreCo]

Way too much risk for me....either side.

I'm hoping this horrible decline overall today will bring SIRI back down soon. It is already down to .19 from the .22 I bought at 15 minutes ago.

Take the win while you can.

 

[Mose]

Way too much risk for me....either side.

I'm hoping this horrible decline overall today will bring SIRI back down soon. It is already down to .19 from the .22 I bought at 15 minutes ago.

Take the win while you can.

yea, I have a sell in at .18 if it gets down there. $800, which is happy for me.

 

[Mose]

and it just went! $800 in 20 minutes!!

down to .175 now already....oh well, I'm not gonna regret my quick profit!

 

[FavreCo]

and it just went! $800 in 20 minutes!!down to .175 now already....oh well, I'm not gonna regret my quick profit!

Be happy. You were playing with fire even as much as I think this turd should be zero.

 

[Mose]

only 10 more trades like that and the wife gets her new boobies!

 

[BR33ZE]

Tell me you are just joking. Short a 10 cent stock. I thought I had heard it all and then you asked that.

Nope, I did.

While this may work for you, you are simply gambling. Eventually you will lose all your $ with this technique. You have no idea what is going on with the company. You are simply making a bet. A proven losing technique as far as investing.

similar to bets on UCO?

 

[FavreCo]

Tell me you are just joking. Short a 10 cent stock. I thought I had heard it all and then you asked that.

Nope, I did.

While this may work for you, you are simply gambling. Eventually you will lose all your $ with this technique. You have no idea what is going on with the company. You are simply making a bet. A proven losing technique as far as investing.

similar to bets on UCO?

I'm not touching Oil on long or short either. Once the economy :X turns around....if it ever does. Then I will consider going long on oil. Until then it's not worth my time.

 

[SecondCity34]

only 10 more trades like that and the wife gets her new boobies!

future pics?

 

[Mose]

only 10 more trades like that and the wife gets her new boobies!

future pics?

If you make with the stock picks, I'll make with some stock pics.

 

[The Sniper]

Profit today = $448 (PRGN)

Year to date profit = $17,565

I hold these positions into tomorrow:

7,000 shares of UCO @8.70 (added 1,000 shares today)

1,000 shares of ESEA @5.49

2,500 shares of EXM @8.25

3,000 shares of SBLK @3.04

At current prices, I am upside down on these securities to the tune of $6,650. As I type this, I am riding this out without stop losses. I hate being upside down, but frankly don't believe the evaluations are correct. I have 6,000 shares set to sell when UCO hits 9.25. I am not going to put sell orders in on Dry Shipping until the BDI shows signs of slowing down.

Now down by about $11,500. Gulp.

Now a loss of about $12,500. Hope he's not watching this.

At the risk of being called a buzzkill, the loss is now ~ $14,500. I'm long oil myself, so this is not fun.

Down $23,675.

 

[Jason Wood]

I don't think the strategy has failed, however I don't think that it fit your time horizon. All of the criteria that you searched on were fundamental/valuation criteria. Unfortunately cheap stocks can get cheaper--you just have to be willing to wait it out. If you wanted a shorter-term strategy, then it should be based on technical indicators. I'm not a big proponent of technicals, but you can't expect short-term performance based on fundamentals. It will be interesting to see what you would have made on this portfolio if you'd held it for a year.

As you know Gudes, I'm not a technician either but have come to have tremendous respect for technical analysis. We've layered in technical analysis in several ways as a means of counterbalancing our fundies approach and it's, knock on wood, served us well.

There is a futures market that trades oil. February 2010 contracts right now TRADE for 55% higher than the price right now. So people trading on both sides of that contract have equalized the price to be 55% higher than it is right now.

It's been awhile since I studied for CFA exams, but isn't there an easy opportunity to lock in a risk-free profit if this is true? Why couldn't you sell a futures contract, buy oil, and invest the price difference in treasuries? Why wouldn't I borrow billions of dollars to do this trade repeatedly right now? Obviously I'm missing something, but a 55% automatic profit seems pretty nice.

I am likely out of this thread for awhile. I don't feel like selling these securities at a loss. And I also don't feel like staring at the screen waiting for a giant bounce when all likelihood it may not be coming for awhile. So I have set limits to sell that will expire within 60 days if they are not met. So since the computer will execute these without my watching, I doubt I check in very often as there will be nothing to report. Here are my limits I set:Sell 2,000 EXM @8.75Sell 1,000 EXM @ 9.25Sell 1,000 ESEA @ 5.50Sell 1,000 SBLK @ 3.35Sell 1,000 SBLK @ 3.50Sell 1,000 SBLK @ 3.75Sell 4,000 UCO @ 9.25Sell 2,000 UCO @ 9.50Sell 1,000 UCO @ 9.75It looks like I might be in some of these for a bit. Even though it feels like oil is dirt cheap, I have enough shares. If it bounces back I will be happy with my profit. I have made $17,500 to date this year. Hopefully I don't lose more here by trying to wait this out.

I just saw this thread for the first time and am

 

[Cromedog]

UCO is not looking good...interesting article.

http://seekingalpha.com/article/119316-dou...-etfs-decay-t...

 

[Mark Davis]

Profit today = $448 (PRGN)

Year to date profit = $17,565

I hold these positions into tomorrow:

7,000 shares of UCO @8.70 (added 1,000 shares today)

1,000 shares of ESEA @5.49

2,500 shares of EXM @8.25

3,000 shares of SBLK @3.04

At current prices, I am upside down on these securities to the tune of $6,650. As I type this, I am riding this out without stop losses. I hate being upside down, but frankly don't believe the evaluations are correct. I have 6,000 shares set to sell when UCO hits 9.25. I am not going to put sell orders in on Dry Shipping until the BDI shows signs of slowing down.

Now down by about $11,500. Gulp.

Now a loss of about $12,500. Hope he's not watching this.

At the risk of being called a buzzkill, the loss is now ~ $14,500. I'm long oil myself, so this is not fun.

Down $23,675.

That truly is Hoping for Dodds' sake this reverses course.

 

[krista4]

Belated .

 

[Mark Davis]

UCO is not looking good...interesting article.

http://seekingalpha.com/article/119316-dou...-etfs-decay-t...

Anyone else having trouble with the link? Crome I'd be interested in reading this one.

 

[SecondCity34]

UCO is not looking good...interesting article.

http://seekingalpha.com/article/119316-dou...-etfs-decay-t...

Anyone else having trouble with the link? Crome I'd be interested in reading this one.

Wouldn't open for me either.

 

[The Z Machine]

Uf... this thing is going sour and fast.

Time to hold my shares and wait for the turnaround. It's really my only option.

 

[kip stabone]

EXM to suspend dividend.

http://www.reuters.com/article/marketsNews...20090217?rpc=44

 

[BR33ZE]

Belated .

please no.

 

[videoguy505]

UCO is not looking good...interesting article.

http://seekingalpha.com/article/119316-dou...-etfs-decay-t...

Anyone else having trouble with the link? Crome I'd be interested in reading this one.

Wouldn't open for me either.

Try: http://seekingalpha.com/article/119316-dou...aster-by-design. The usual "don't hold a double ETF past the bell at the end of the day" rule.