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Post by fas550 on Nov 8, 2012 14:34:40 GMT -8
Hey after hours are up lol
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Post by mbeauch on Nov 8, 2012 14:37:51 GMT -8
applemuncher, institutions do not buy calls. I actually think there are laws preventing institutions from participating in the option market. Hedge funds and retail are where you find the option players. The market makers are the ones selling calls and puts and they always win. I would not be surprised if in a few months there is a story about a couple of rouge hedge funds who conspired to make this happen. BTW, I am a card carrying member of the tin foil hat club. Love a good conspiracy.
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Post by mbeauch on Nov 8, 2012 14:39:19 GMT -8
Hey after hours are up lol We were up nice this morning in the pre-market. Lot of good that did us.
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Post by appledoc on Nov 8, 2012 14:41:06 GMT -8
applemuncher, institutions do not buy calls. I actually think there are laws preventing institutions from participating in the option market. Hedge funds and retail are where you find the option players. The market makers are the ones selling calls and puts and they always win. I would not be surprised if in a few months there is a story about a couple of rouge hedge funds who conspired to make this happen. BTW, I am a card carrying member of the tin foil hat club. Love a good conspiracy. They clearly don't always win. The weekly put writers have been getting absolutely destroyed.
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Deleted
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Post by Deleted on Nov 8, 2012 14:43:48 GMT -8
Why are Gregg's post showing as Guest now? I think with all the grumpiness around here we must be reaching the lows. Of course I've been thinking that for 100 points already, so what do I know.
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Post by greedynoob on Nov 8, 2012 14:46:23 GMT -8
In this case though it might be seen as being a little different if the tax rate is set to rise so that one could sell to declare long term gains at a lower rate, thus the attractiveness of selling now, which creates a feedback loop. No, it's not different, because the laws have not been changed in the immediate past in order to prevent one from paying this year's rate in this extremely unusual circumstance.
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Post by bryanyc on Nov 8, 2012 14:56:06 GMT -8
In this case though it might be seen as being a little different if the tax rate is set to rise so that one could sell to declare long term gains at a lower rate, thus the attractiveness of selling now, which creates a feedback loop. No, it's not different, because the laws have not been changed in the immediate past in order to prevent one from paying this year's rate in this extremely unusual circumstance. Care to clarify? If you sell now you will likely pay a lower long term capital gains tax, and a much lower short term gains tax compared to next year (which is what may be really driving this downward spike). That is a lot of incentive to sell now rather than later. There have been plenty of articles out about realizing capital gains this year as opposed to next year.
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Post by greedynoob on Nov 8, 2012 15:05:30 GMT -8
No, it's not different, because the laws have not been changed in the immediate past in order to prevent one from paying this year's rate in this extremely unusual circumstance. Care to clarify? If you sell now you will likely pay a lower long term capital gains tax, and a much lower short term gains tax compared to next year (which is what may be really driving this downward spike). That is a lot of incentive to sell now rather than later. There have been plenty of articles out about realizing capital gains this year as opposed to next year. I think you're confused as to what post I was initially replying to. I understand the incentive full well. The question was whether there is any regulation limiting one from selling now to pay the lower taxes on current gains and immediately re-buying in order to be positioned to collect future gains. That is what I was addressing. Of course I'm not anybody's CPA, but 1) as far as I know there is no rule covering the inverse of a "wash sale", 2) under normal circumstances it would not even make sense for the gov't to have such a rule, and 3) (not mentioned before) if there were such a rule, then there'd be one rule covering gains and losses, not the current "wash sale" rule applying only to losses and some other rule covering gains...
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Post by lovemyipad on Nov 8, 2012 15:13:07 GMT -8
Why are Gregg's post showing as Guest now? I think with all the grumpiness around here we must be reaching the lows. Of course I've been thinking that for 100 points already, so what do I know. He capitulated on us.
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Post by bryanyc on Nov 8, 2012 15:18:37 GMT -8
The point is that there are reasons to sell now to lock in a lower capital gains tax rates. More selling equals downward pressure. Apple is one of the biggest large cap gainers in the market in the past year. The dynamic is fairly clear.
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Post by lovemyipad on Nov 8, 2012 15:22:50 GMT -8
I don't believe that to be possible. The volumes on decline we are seeing cannot be attributed to individual investors alone. They are simply too high. I agree, retail investors cannot make up for 30+ mio shares. The big boys dumped that stock badly this week. My guess: margin liquidations.
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Mav
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Post by Mav on Nov 8, 2012 15:25:21 GMT -8
Why give up on AFB? Seriously, we're all suffering here, but stay sharp and stay sane about it. Deleting one's account here...why?
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Post by lovemyipad on Nov 8, 2012 15:28:14 GMT -8
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Mav
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Post by Mav on Nov 8, 2012 15:28:19 GMT -8
There's FEAR in the air about AAPL. But it can only sell off so much. That tree can't have many scared longs still hanging on. They've had so many chances to make like a bear and give it up for the winter. Or...something.
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Post by greedynoob on Nov 8, 2012 15:29:13 GMT -8
The point is that there are reasons to sell now to lock in a lower capital gains tax rates. More selling equals downward pressure. Apple is one of the biggest large cap gainers in the market in the past year. The dynamic is fairly clear. Yes, it is. But there were questions here about when one could buy back in--at least one member seemed to be searching for a regulation which I believe not only does not exist, but would not even make any sense. In the past I've seen members here work hard to tie themselves in knots trying to misunderstand the wash sale rule, and this seems to be related--not understanding the wash sale rule leading to some superstition that if you sell now, there must be some mysterious rule somewhere limiting when you can buy back without being subjected to... well subjected to what I'm not sure--having to pay capital gains tax again on the same gain next year??? That's what I'm arguing with, not the idea that one might want to lock in current gains at current tax rates.
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Mav
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Post by Mav on Nov 8, 2012 15:29:27 GMT -8
Note: Pendola doesn't get AAPL. At all.
Though price action wise he may have a point.
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Post by rickag on Nov 8, 2012 15:30:46 GMT -8
Gregg you are a wealth of knowledge and I love learning from you, but in the same sense you are making some big claims too. You've gotten smoked as much, or more, than a lot of us too by having very bullish trades on the table, so if it's so easy and simple that this is what is happening, why would you not have used that earlier? I feel like only in the past few days have you talked about 'figuring out' how the institutions trade. Knowing that would be worth instant millions. I began trading with $500 in November of 2004. My net worth today is well over $3,000,000 (post tax). In the interim I learned and changed my thinking several times. Each time getting closer to where I am today. What I espouse today is a refinement of things I began stating several months back. Specifically Investor Sentiment and Institutional Sentiment. What has changed for me as of today, is my ability to see the changes in that Sentiment real time (or very nearly so). I've laid out, it is up to the reader to agree, or disagree. But for me, the evidence is unequivocal. For the past couple of weeks the institutions have been in accumulation mode. They did not lose on the fall. To the contrary, they made money. How did they do that? Going back to the P/C ratio you can clearly see that somebody (and the biggest somebody out there are the institutions) was accumulating Puts up until Sept 21. On Sept 21 AAPL hit it ATH and began its current descent. Institutions believe in Apple's story, and the future of AAPL. LONG TERM. In the short term AAPL is going to be subject to Apple's short term performance (make or miss numbers). When, after doing their channel checks the Institutions saw that Apple was going to miss its numbers for the second consecutive quarter, they began accumulating PUTS. At the ATH they began selling shares, with AAPL dropping as a result. The drop increased the value of their PUTS such that they did not lose anything on the sell off, of which they participated. To the contrary, they used capital gained when selling at $700 to pay for shares PUT to them at $630. When AAPL hit $630 the institutions began accumulating Calls. In the numbers I've already posted, you can see the decline in Put OI interest that ended on 22 OCT. Since that date the institutions have been accruing Calls (it appears to be a mix of Jan 13 and Feb 13 Calls, I can't tell exactly because OX doesn't give me that much detail). The deal is that I do not cease learning from my mistakes, always seeking the knowledge I needed to make the last bad trade a success. It has taken time, and I ave always explained the reasoning for my beliefs. That reasoning has followed a consistent path of trying to understand, in advance of moves like this, what the institutions are doing. Like separately developed technologies, each needed to make the whole widget work, my efforts have yielded pieces of the overall picture, that now forms the whole. Each piece made my trades better, but not perfect. I will never achieve perfection BECAUSE I'm following the institutions. Now if they were to share with me what they are going to do, before they do it, I will achieve perfection. But I doubt that will ever happen. Thank you for the explanation. I may be dense, probably am, but I have to ask. Where do you get Investor and Institutional Sentiment. Are they from your own formulas or are they from published sources? I understand your distain for the term EOs, but what you describe fits my definition. EOs don't necessarily illegally manipulate the stock but the actions you describe certainly suggest a form of manipulation. Again thank you for your continued contributions to the board.
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Mav
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Post by Mav on Nov 8, 2012 15:35:12 GMT -8
Uh, he's gone Jim
Er rickag. (/Bones from Star Trek)
ISM is Gregg's version of the P/E multiple.
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Post by lance on Nov 8, 2012 15:47:33 GMT -8
Buying shares when I get this dividend payout. When does it come into our accounts?
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Post by valere on Nov 8, 2012 16:03:05 GMT -8
Hi All , I have a stupid newbie question.... Is there any reason why I should not sell my common which I acquired under 300 , take the lower cap gain and immediately buy 2 Jan 15 , 300 leaps for $248 each . I basically get two leaps for each common and some spare cash Am I correct that the time value for these leaps is less then 20 dollars for 2 years ?? I understand that I will miss out on the dividend , but this seems like a fairly risk free trade, unless apple is under 300 in Jan 2015 Am I missing something here ?
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Post by jcaron on Nov 8, 2012 16:15:01 GMT -8
Hi All , I have a stupid newbie question.... Is there any reason why I should not sell my common which I acquired under 300 , take the lower cap gain and immediately buy 2 Jan 15 , 300 leaps for $248 each . I basically get two leaps for each common and some spare cash Am I correct that the time value for these leaps is less then 20 dollars for 2 years ?? I understand that I will miss out on the dividend , but this seems like a fairly risk free trade, unless apple is under 300 in Jan 2015 Am I missing something here ? Not Risk fee as nothing is risk free. The risk is moderate in comparison to shares as you still have an expiration date. The advantage is that you will have some leverage that will more than compensate for loss of a dividend assuming that the stock resumes its upward travel..
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Post by aapl4kiki on Nov 8, 2012 16:21:06 GMT -8
Why are Gregg's post showing as Guest now? I think with all the grumpiness around here we must be reaching the lows. Of course I've been thinking that for 100 points already, so what do I know. He capitulated on us. Wow. Things are getting tense in here. First our beloved Nate. Now GT. People are really wound tight after an excruciating seven weeks.
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Post by bryanyc on Nov 8, 2012 16:36:09 GMT -8
Hi All , I have a stupid newbie question.... Is there any reason why I should not sell my common which I acquired under 300 , take the lower cap gain and immediately buy 2 Jan 15 , 300 leaps for $248 each . I basically get two leaps for each common and some spare cash Am I correct that the time value for these leaps is less then 20 dollars for 2 years ?? I understand that I will miss out on the dividend , but this seems like a fairly risk free trade, unless apple is under 300 in Jan 2015 Am I missing something here ? Valery. Your break even on that option is 548, below you lose money, below 300 you lose all. You can do the calculation to see what the relative gain loss is at different price points. For instance I would look at a share price of 1000, 750 and 500.
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SomeJuan
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Post by SomeJuan on Nov 8, 2012 16:39:30 GMT -8
I have an opinion or two, first off, take a nice long breath. Options are manipulated to the nth degree recently, and that will not stop in the near term, ie. 60 days. We are getting the out of favor sentiment on all channels, mainly due to pure ignorance. Ignorance is the keyword, and the EO's are shaking the tree's with all their might. The Doug Cass's of the world are getting the spotlight, and they who know not, at least for now are in control.
All option plays are out the window in the near term, and you could, and have taken a mighty beating. Every member of this board is in the same boat. Tankage…
I do not do spreads, I do not do blind call's, nor puts. I buy common's, and for the better part of the last decade, commons win. Buy low, and do not sell. When WTF buy opportunities come along, double down. We are in WTF buy signals now, one of many that has occurred many times in the last 12 quarters. I sell some covered calls in the near term when crap is hitting the fan, and I sell some covered puts when it is going gangbuster. All of the Call/Put action is weekly, and pays a nice nest egg of usually several 2-300 basis points on a weekly basis. Money in the bank. I have yet to have a call/put pulled away from me. I just add to the weekly accumulation of capital, and the loss to those that are foolish enough to buy my put/call options. I still own all the underlying commons.
I never sell more covered calls than 25% of the commons, and I never sell more than 25% of the covered puts.
Each week, I take the profit from either side of the covered, to add to the common basket. Accumulation at it's best, with someone else's dollars.
We are about at the bottom, and if you are not in accumulation mode, you should be. We are at fire sell/WTF moment right now. I am also adding to this via any spare cash at 2-3 shares a week in common. I pay for some of them, and the covered put/calls pays for the rest.
We will probably hit the 520 PP in the near coming days. Then we begin the repeatable parabolic upward swing when the EO's have shaken out all the "Nate's"
This trend is by far a repeatable event. Get shaken out, or shake the tree, and buy more. Commons is the key to wealth, neigh, The Oracle dictates it, and he has a very good track record on the following. Buy commons on the instruments you believe in, and have faith in, and the fundamentals are aligned, and you too can make a millionaire out of your wisdom. I have the utmost belief is all things AAPL, though it is only 20+/- of my net worth. It was once 2%.
Just a collection of my pennies
Best to all on the board, and buyer beware on the BCS/BPS arena in the short term.
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Post by greyfox15 on Nov 8, 2012 16:46:01 GMT -8
Humbly an old timer dating back to the Tommo days. Understandable the amount of value dropped is sickening especially with no respite visible. Realize in life, nothing is all black or all white. For those with a long term profitable aapl position, this drop can provide some interesting tax angles. BTW spent 30 min. with Fidelity and they say on a profitable position, one can sell it and buy it back at any time. On a position that is losing, if sold, must wait 30 days, if I recall correctly, before re-purchasing. If you believe as many and I do that the capital gains rate is going to increase in '13, you should consider selling, taking and paying the tax now. Position sold can be re-acquired at the same time, giving your aapl position a higher value for future tax gain. This, of course means paying the tax on the gain. If you own the share outright, at worse, cover the tax with margin. For some, this is a ray of sunshine in the middle of a storm.
Re: EO's. Assuming they bought low, aapl price must rise for them to profit. All is not lost. Sometimes it just looks and feels that way.
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Post by alice on Nov 8, 2012 16:48:32 GMT -8
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mark
fire starter
Posts: 1,555
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Post by mark on Nov 8, 2012 16:55:29 GMT -8
Going back to the P/C ratio you can clearly see that somebody (and the biggest somebody out there are the institutions) was accumulating Puts up until Sept 21. On Sept 21 AAPL hit it ATH and began its current descent. Who exactly sold them these puts and absorbed billions in losses on them?
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Post by adamthompson32 on Nov 8, 2012 16:57:06 GMT -8
When he says insituations are buying he means they are net buyers. If they buy 100 million shares and sell 95 million they are net buyers. Then if retail is a net seller buying 50 million shares and selling 60 million the net result is the stock goes down with institutions "buying" and retail "selling".
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mark
fire starter
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Post by mark on Nov 8, 2012 16:59:44 GMT -8
because I think this tax increase is overblown (perhaps 5% increase on long term gains) For many people, the tax on long-term capital gains is going from 15% to 23.8% in January. That's a 58.66% increase!
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SomeJuan
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Post by SomeJuan on Nov 8, 2012 17:13:38 GMT -8
Mark,
That only reflects non IRA, tax non deferred accounts. If you trade in IRA/SEP/ROTH accounts, there are no tax ramifications. All taxable accounts are about o be spanked, big time. This is a tenant of Obama.
And for all that think light political talk has no place on the board, Wake up and smell the roses, reality bites! A modicum of politics is relevant to any investing ideology. It should be tolerated, and welcomed, to a rather fine point of crossing the line.
2 pennies
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