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My Stock Value Strategy Starts Now (3 Viewers)
- Thread starter David Dodds
- Start date
David Dodds
Administrator
bought 500 UNG at 13.92
David Dodds
Administrator
Much like when crude oil was trading at $35-40/barrel and we knew it would be higher in the summer, I think this is a slam dunk if you hold until the start of the heating season (Sep/Oct).
David Dodds
Administrator
Ahhh... the perils of limit sales. FSIN was having problems breaking thru the $9 barrier so I put a limit in for $8.80 to sell today and try and rebuy in the low 8's. I literally went to the bathroom and came back and it has blown all the way thru to $9.16. Barely on any volume though. This is one I will watch and try to rebuy as it is so small it has wild price swings.Gain of $704.77
SkyRattlers
Anti-aliai
Sounds like it's time for me to switch positions then. I bought 130 units of OIL back in early Feb for $19.19, and it's now sitting at ~$25. It hasn't risen in line with the price of a barrel of crude as much as I was hoping. So short of another climb back to $100+ per barrel I don't know how much higher OIL can climb.If you guys can figure out which is the better buy between UNG and CHK in the next day or two then I'll likely buy into that and hold it as David recommends.On a side note, I also bought 2100 units of GKK back in early Feb. at $1.19. This is one of the original stocks that David listed when this thread was first created. It didn't treat David very well during his experiment but the numbers on it intrigued me and I decided to buy and hold. It's been trading ~$2 for the last two months and from my meager investing experience the numbers still look good on it and it's only a matter of time before it starts climbing back to where it was before the economic collapse...+$10 (cross my fingers). So a big thanks to David for bringing it to my attention, even if it was inadvertent.
David Dodds
Administrator
What the market thinks about the longterm prospects of Natural Gas (UNG)
Jan 2011 Options
This is the oil contango all over again. Everyone knows these stockpiles are a short-term issue. For people that are looking to buy and hold this is about a safe an option as there is in the markets. This is also a very good hedge against a weakening dollar.
Jan 2011 Options
This is the oil contango all over again. Everyone knows these stockpiles are a short-term issue. For people that are looking to buy and hold this is about a safe an option as there is in the markets. This is also a very good hedge against a weakening dollar.
Random
Footballguy
Otis
Footballguy
Come late Fall/Winter, this should be dyn-o-mite. I may dump out of my Oct calls at some point and move on to Jan calls, and continue to do so as time passes and NG runs up (assuming it does).
Jene Bramel
Footballguy
This was my initial conclusion.CHK, without the contango issues, may move more quickly than UNG, but both are solid long term commodity options. Considering long term plays in both, but if one has much higher 12 month potential than the other, I'd be interested to hear it. My guess is that both are so closely tied to NG prices that there's little difference, but I was curious what those who were further along than others in doing their research were thinking here.
Mark Davis
Footballguy
Is UNG the same as USO when it comes to IRA's? I'm thinking it gives off some type of partnership income that makes this one for your regular account only. That's the reason I went with DBO over USO on my IRA account.
Mark Davis
Footballguy
That was me. I wasn't aware you couldn't short them. I made my play by writing call options on FAZ. It's essentially the same play betting against the stock. I had no problems doing that over at ThinkorSwim.
St. Louis Bob
Footballguy
In for 2300 FAZ at $4.30.
siffoin
Footballguy
One way to buy UNG on the cheap would be via synthetic stock.
So the position looks like this:
Buy Jan 2010 14 Calls at:$3.00
Write the Jan 2010 14 Puts for: $2.75
Total cost is : $.25 per share or $25.00 for 1 contract.
Risk profile in this position is VERY close (about 95%) to the same as long stock...so for every $1.00 UNG goes up you make $100 per contract. For every $1.00 UNG goes down you lose $100 per contract.
So lets say you enter in a 10 contract trade (=1000 shares) here with UNG at $14.10. And UNG is trading at 20 by Jan 2010 expiration...you'd make approx: $5780. Going long stock you'd make $5900.
But your gain would be at a fraction of the initial investment.
If UNG was trading at $9.00, your loss would be $5100 on the synthetic stock play vs $5100 long stock.
So the position looks like this:
Buy Jan 2010 14 Calls at:$3.00
Write the Jan 2010 14 Puts for: $2.75
Total cost is : $.25 per share or $25.00 for 1 contract.
Risk profile in this position is VERY close (about 95%) to the same as long stock...so for every $1.00 UNG goes up you make $100 per contract. For every $1.00 UNG goes down you lose $100 per contract.
So lets say you enter in a 10 contract trade (=1000 shares) here with UNG at $14.10. And UNG is trading at 20 by Jan 2010 expiration...you'd make approx: $5780. Going long stock you'd make $5900.
But your gain would be at a fraction of the initial investment.
If UNG was trading at $9.00, your loss would be $5100 on the synthetic stock play vs $5100 long stock.
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None_More_Black
Footballguy
The problem with CHK is that some people say they are poorly managed and the CEO got paid 100 million last year. The company has a lot of debt and could have some short term liquidity issues. They might be forced do an equity offering or cut the divi or both.
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FavreCo
Footballguy
That sounds highly likely because if I am not mistaken, Cramu absolutely loves CHK's CEO and has had him on the show pumping CHK in the past. I'd rather go with UNG. Standing at the table with chips in hand.
David Dodds
Administrator
I still have not filled out the forms to have an option account. But this posting here is going to get me off my butt. This is a way to gamble up with pennies on the dollar yet still reap all the rewards if this thing goes up as expected.
David Dodds
Administrator
I am going to take a shot with both, but I would agree that UNG is the more pure play to the commodity. That seems a ton safer to me as well.
Jene Bramel
Footballguy
What's the contango with NG likely to do to UNG? Are we talking the same silliness we saw with USO and the like when contracts roll over?
Mose
Footballguy
siffoin
Footballguy
I bought UNG today around $13.90 for my wife...and I'm attempting to put on the synthetic trade for my company at $.20...I got greedy and now the position costs $.30.But agree...when you have a position that is not going to be a LT primary holding...with an expected move over 6-12 months...synthetic stock makes a lot of sense.So take a PRGN...you think it will be $8.00 by Dec expiration...you can go long the stock for $5.00...or buy the synthetic Buy 5 calls write 5 puts for $.03. Sometimes...you can get them to pay you to put the position on...meaning you can put the position on for a credit instead of a debit.Just another way to look at how to enter positions instead of long or short stock.I still have not filled out the forms to have an option account. But this posting here is going to get me off my butt. This is a way to gamble up with pennies on the dollar yet still reap all the rewards if this thing goes up as expected.
Jene Bramel
Footballguy
I've read a lot of siff's stuff on options, but could someone put together a short primer or link to something that a moron like me might understand. I have a ridiculously big mental block on option trading.
Cromedog
Footballguy
UNG is the pure play, but that's not always the best option...depends if you are really trying to reduce risk. The upside is better with stocks like CHK or DVN, APA. All have held much better than UNG over the past year and YTD.
siffoin
Footballguy
start here:https://www.thinkorswim.com/tos/displayPage...rainingProductsI've read a lot of siff's stuff on options, but could someone put together a short primer or link to something that a moron like me might understand. I have a ridiculously big mental block on option trading.
Mark Davis
Footballguy
I decided to join the UNG party on a limited basis. Most of my funds are in my IRA account so had to play this one in my small regular account. Wrote one June 14 put and received $.55/share. I'll either buy in at $13.63 (after fees and commissions) if the stock ends below 14 on options expiration day or I'll pocket $52.
NYG Endzone
Footballguy
Added 750 HEB at $2.76If I hadn't sold half my HEB when I did I would be nauseous. Just got hammered again down to 2.6x and then came back to 2.8x. This can't be legal.eta: Or maybe this is the stock we should be day trading
u999spf
Footballguy
BDSI is a biotech stock that is expected to get FDA approval in the next 4 days. It has been running up steadily from $3 over the last 4-6 weeks. Its about $6 now after some sell-offs but it's expected to pop on the good news. You can read up on it, but its one I have been long in for over 2 years waiting for it to come in. It could go to $12 or more on the FDA approval and eventually most likely be purchased by a large drug company as they have other drugs in the pipeline.
ctriopelle
Footballguy
My buddy wrote this up for Morningstar, and sent it to me when I asked him some options questions...Morningstar OptionsI've read a lot of siff's stuff on options, but could someone put together a short primer or link to something that a moron like me might understand. I have a ridiculously big mental block on option trading.
Intro to the article is in the link, and the rest of it is free to download as well.
St. Louis Bob
Footballguy
The treasury is selling 15&30 year bonds tomorrow. I don't think anybody (hello China!) is going to be buying them and that will send the market down. 
FavreCo
Footballguy
Hot potato.....CATCH!!!!Added 750 HEB at $2.76If I hadn't sold half my HEB when I did I would be nauseous. Just got hammered again down to 2.6x and then came back to 2.8x. This can't be legal.eta: Or maybe this is the stock we should be day trading
FavreCo
Footballguy
So you are only risking $50 on 200 shares of UNG but in order to make $ UNG has to get to some level (strike price?) before some date or you lose the $50. Do I have that right? You can also sell the contracts to someone else before the options expiration date, right?siffoin said:
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None_More_Black
Footballguy
He has similar risk to buying UNG outright but he is controlling shares at the cost of .25 a share instead of 14.
kinda suprised here. I think you're right in that who the hell is going to be buying these bonds....but, banks agreed to pay back $68b in bail out money, that has to show they believe some sort of strength in financial markets. g'luck here.And I'll take a ride on the UNG express. I do see a bit of a bump in ng prices, especially when taken into account the price ratio vs oil. Both ng and oil have huge surpluses around, so there is some concern that the price increase may be a slow time coming, but.....I like the odds here of a rebound here. also own a little apa, though I've held that for a while now.St. Louis Bob said:BR33ZE said:The treasury is selling 15&30 year bonds tomorrow. I don't think anybody (hello China!) is going to be buying them and that will send the market down.
optionmaven
Footballguy
I'm going to do a little write up about options as that is what i primarily play(penny and cheap stocks usually have no options). I spent about a year educating myself on them but Siffoin has mastery knowledge from what i've read. I have no knowledge of how writing of options and puts works, but is something i am going to be looking into. You are correct on your assumption Favre. If you buy xyz option at 5 dollar strike price with a .25 premium, you need to clear 5.25 to make money. Option can be sold at anytime. Profit or loss. There is also time value and intrinsic value in options if playing them out for a longer time. i'll get to a write up tonight.
