Friday, January 4, 2008
Why can't Congress get anything done?
I had a conversation last night about the difficulty in fixing anything in politics. We often ask ourselves why Congress can't get anything done. I think part of the problem is this: http://www.nytimes.com/2008/01/05/sports/baseball/05clemens.html?ref=baseball. What the fuck does Congress have to do with baseball?
Friday, December 21, 2007
Ron Paul Campaign Contribution
I've been highly tempted recently to donate to the Ron Paul campaign. I have many reasons to do so:
- He's the only candidate that I believe when they speak.
- He's seems to have an understanding of the issues - and more in depth than any of the other candidates, or at least more understanding than they are willing to show to the unsophisticated masses.
- He will work to eliminate the IRS - my contribution could even be viewed as an investment in this light.
- He's the only one trying to make the country freer. Less interference and monitoring sounds good to me.
- Most of his other issues found at RonPaul2008.com
- I have more money than I really need.
Sunday, December 16, 2007
Music and Parties
I went to a great party tonight. It was a graduation party for an old friend from high school (and a bit in college). The thing that made it a hit, though, was the live music. People brought guitars, a banjo, bass guitar, upright bass, harmonicas, shakers, and voices. People would start playing a song and whoever knew the lyrics would sing aloud.
I only wish I were musical in some way. I don't play any instruments and I have no rhythm for even shakers. I can sing (poorly and never in public), but I know no lyrics. It makes me want to keep a guitar in the house, though, so other people can play when they come over. It'd be kind of like how I keep alcohol strictly for the enjoyment of others.
It also got me thinking about how seldom this happens anymore. I can't personally attest to the good ol' days, but the old movies often show impromptu musical fun at neighborhood gatherings. Really, neighborhood gatherings have also stopped, for the most part - maybe an occasional block party if you happen to live on a social block. I'm going to ask my brother if he has a spare guitar he'd like to leave at my place. Perhaps we can revive this tradition.
I only wish I were musical in some way. I don't play any instruments and I have no rhythm for even shakers. I can sing (poorly and never in public), but I know no lyrics. It makes me want to keep a guitar in the house, though, so other people can play when they come over. It'd be kind of like how I keep alcohol strictly for the enjoyment of others.
It also got me thinking about how seldom this happens anymore. I can't personally attest to the good ol' days, but the old movies often show impromptu musical fun at neighborhood gatherings. Really, neighborhood gatherings have also stopped, for the most part - maybe an occasional block party if you happen to live on a social block. I'm going to ask my brother if he has a spare guitar he'd like to leave at my place. Perhaps we can revive this tradition.
Dining Room Set
I went to Nebraska Furniture Mart with my mother and my little brother, Jake. I decided to take advantage of their 30 months of 0% interest financing and fill up my dining room, finally. We walked the floor for about an hour with a sales lady before setting in on 4 sets. They weren't all next to each other, so it was a long process of taking a mental picture of one and then running over to compare it to another. I'm sure that sales lady loved us.
I found pictures of things online!
My table and china hutch thing!
My sidebar/buffet/server! (The chair shown in this picture is like mine - the wooden back.)
It's exciting, most definitely. And surprisingly expensive. I had priced tables before, but I hadn't counted on having to buy two extra chairs for when the leaf is in (always for a lazy bum like myself), a sidebar/buffet/server, and a china hutch thing. I understand that it's necessary to fill the room with something, and that these things probably have an actual purpose, but I hadn't considered them until my style consultant (my mother) said I needed them.
I found pictures of things online!
My table and china hutch thing!
My sidebar/buffet/server! (The chair shown in this picture is like mine - the wooden back.)
It's exciting, most definitely. And surprisingly expensive. I had priced tables before, but I hadn't counted on having to buy two extra chairs for when the leaf is in (always for a lazy bum like myself), a sidebar/buffet/server, and a china hutch thing. I understand that it's necessary to fill the room with something, and that these things probably have an actual purpose, but I hadn't considered them until my style consultant (my mother) said I needed them.
Options Update: Savient (SVNT) (again)
Whatever news Savient (SVNT) released on Thursday ended up being good news. I only skimmed the release and saw something about gout. Gout didn't seem to be a big deal in the episode of House M.D. that it played a role in. Oh well, the important thing is that SVNT is up to $18.90, which is well above the $12.50 it needs to be at in order for my shares to be called away and for me to be done with this. I don't particularly like being invested in a company I know nothing about. But for a 25% return in a few weeks, I'm willing to make an exception every so often.
Tuesday, December 11, 2007
Options Update: Savient (SVNT)
So, it's been awhile since I've updated things on the financial side. I realize it's not anything people read in detail, but tonight I have nothing else I can write about.
So, if anyone happened to check up on Hythiam (HYTM), they'll quickly realize that it is far below my $5.80 break-even price. Yes, I seem to be losing money on that. But, this hasn't stopped me from experimenting with highly volatile options writing. Enter Savient, another small pharmaceuticals company. They apparently have some data coming out sometime in December, but I have no idea when. No matter when the data comes out, though, it is causing the implied volatility to be in the 220% range, which is ridiculously high. I bought 300 shares at $12.10 a couple weeks ago and was able to sell 3 covered call options for $2.60 each. Thus, I made roughly 21% for the month of December.
It is possible that whatever news is coming out will be negative and the underlying stock price will plummet, but there is more call interest than put interest, and I do have 20% downside protection. Plus, the stock price has reached $15.40 today, so any plummet starts from a profitable position. I see it as much more likely that my shares will be called away at $12.50 and I will be done with the matter. Of course, now that I've said that, the exact opposite will happen, as with Hythiam. I should learn to keep my fingers from typing such things. Well, wish me luck.
So, if anyone happened to check up on Hythiam (HYTM), they'll quickly realize that it is far below my $5.80 break-even price. Yes, I seem to be losing money on that. But, this hasn't stopped me from experimenting with highly volatile options writing. Enter Savient, another small pharmaceuticals company. They apparently have some data coming out sometime in December, but I have no idea when. No matter when the data comes out, though, it is causing the implied volatility to be in the 220% range, which is ridiculously high. I bought 300 shares at $12.10 a couple weeks ago and was able to sell 3 covered call options for $2.60 each. Thus, I made roughly 21% for the month of December.
It is possible that whatever news is coming out will be negative and the underlying stock price will plummet, but there is more call interest than put interest, and I do have 20% downside protection. Plus, the stock price has reached $15.40 today, so any plummet starts from a profitable position. I see it as much more likely that my shares will be called away at $12.50 and I will be done with the matter. Of course, now that I've said that, the exact opposite will happen, as with Hythiam. I should learn to keep my fingers from typing such things. Well, wish me luck.
Wednesday, November 28, 2007
New Cat
Monday, November 19, turned out to be a fairly eventful day. It all started when my brother, Brian, called about 10am letting me know that he was in the neighborhood tutoring math with Aimee and they'd be happy to stop by in about an hour, if that was alright. For some reason, this didn't strike me as particularly odd, so I naturally agreed.
About an hour later, they arrive at my front door. When I open it, Aimee greets me with "We brought you an Apple," while handing me a gray kitten. She was extremely tiny, especially given that she was supposed to be about 3 and a half months old. The vet said she was probably the runt and had her food stolen, but that it shouldn't affect her overall development much. She has definitely added some weight, and so looks more normal. She no longer smells like a ferret, but still is a smelly cat.
Here are Fiona and Apple together.
Apple is very cuddly and likes to rub her face on people's faces, which is cute. However, she hasn't learned how to jump, so she claws her way up things, including legs, which is painful. She's learning, though, and is a very cute cat regardless.
About an hour later, they arrive at my front door. When I open it, Aimee greets me with "We brought you an Apple," while handing me a gray kitten. She was extremely tiny, especially given that she was supposed to be about 3 and a half months old. The vet said she was probably the runt and had her food stolen, but that it shouldn't affect her overall development much. She has definitely added some weight, and so looks more normal. She no longer smells like a ferret, but still is a smelly cat.
Here are Fiona and Apple together.Apple is very cuddly and likes to rub her face on people's faces, which is cute. However, she hasn't learned how to jump, so she claws her way up things, including legs, which is painful. She's learning, though, and is a very cute cat regardless.
Tuesday, November 6, 2007
Cat Toy - Laser
I ate at my parents' house for dinner this evening. My brother needed to get a mouse in order to feed his snake, so we went to the pet store. While we were there, I figured I'd get a cheap $2.99 laser pointer pet toy. When I finally got home, I unpackaged it and put in the included batteries. Fiona immediately chased after it and was very exited. Mouse was initially interested, but never excited about it, and quickly lost interest in favor of a crazy-hyper Fiona and the threat presented therein.
Fiona pounced and scrambled after the laser all the way upstairs and around my room. When I shut it off, she began breathing very deeply. I first thought I had run the wind out of her, but then noticed she had her head low to the ground and was breathing into corners and dark places. She was intent on finding the mysterious shiny thing! I indulged her for another minute or so, but then had to get down to installing Supreme Commander: Forged Alliance.
Fiona, however, still had nothing better to do. She began sniffing around again, pawing at everything it could be under or behind. She then began whining very loudly in addition. She has finally calmed down, but I'm not sure whether I should bring the laser back out. She loves chasing it, but it upsets her so much when it's gone. And now she's back to whining.
Fiona pounced and scrambled after the laser all the way upstairs and around my room. When I shut it off, she began breathing very deeply. I first thought I had run the wind out of her, but then noticed she had her head low to the ground and was breathing into corners and dark places. She was intent on finding the mysterious shiny thing! I indulged her for another minute or so, but then had to get down to installing Supreme Commander: Forged Alliance.
Fiona, however, still had nothing better to do. She began sniffing around again, pawing at everything it could be under or behind. She then began whining very loudly in addition. She has finally calmed down, but I'm not sure whether I should bring the laser back out. She loves chasing it, but it upsets her so much when it's gone. And now she's back to whining.
Small Company Earnings
HYTM was listed as releasing it's earnings yesterday, November 5. Instead, their expected earnings release date was pushed back until November 12. I think this is a phenomenon pretty much unique to small companies. I can't imagine Google, IBM, or Apple getting away with a week's delay in releasing financial information.
In fact, HYTM hasn't really gotten away with it. The past couple of days have seen HYTM drop down to $4.71 so far. Incidentally, this puts me fairly deep in the red. We'll just have to see what the implied volatility does after earnings. It may still be worth holding on to if I can still get >5% a month in options premiums. Or perhaps earnings will beat analyst estimates and I'll get my shares called away after all.
In other news, Garmin (GRMN) is down below $100 again. I think if I had $10,000 or multiples thereof, I would buy some GRMN shares and write more out of the money covered calls. Garmin seems to be down on fears of a TeleAtlas bidding war with TomTom (TOM2.as). However, I see this as both a good move and temporary. Garmin has about $1B cash on hand and is worth >$20B, while TomTom probably has less on hand and is worth ~$6.3B.
Garmin used to be in a position of having TeleAtlas in the hands of TomTom and Navteq in the hands of Nokia, meaning they might face an increase in mapping costs. Garmin has either put TomTom in this position, or forced them to go deeper in debt by upping the price of TeleAtlas. If Garmin gets stuck buying the company, they at least have the advantage of being able to afford it, and they have a longer history of acquisitions, which implies to me a better ability to integrate TeleAtlas. It will be interesting to see how this develops. Unfortunately, I'll be watching from the sidelines.
In fact, HYTM hasn't really gotten away with it. The past couple of days have seen HYTM drop down to $4.71 so far. Incidentally, this puts me fairly deep in the red. We'll just have to see what the implied volatility does after earnings. It may still be worth holding on to if I can still get >5% a month in options premiums. Or perhaps earnings will beat analyst estimates and I'll get my shares called away after all.
In other news, Garmin (GRMN) is down below $100 again. I think if I had $10,000 or multiples thereof, I would buy some GRMN shares and write more out of the money covered calls. Garmin seems to be down on fears of a TeleAtlas bidding war with TomTom (TOM2.as). However, I see this as both a good move and temporary. Garmin has about $1B cash on hand and is worth >$20B, while TomTom probably has less on hand and is worth ~$6.3B.
Garmin used to be in a position of having TeleAtlas in the hands of TomTom and Navteq in the hands of Nokia, meaning they might face an increase in mapping costs. Garmin has either put TomTom in this position, or forced them to go deeper in debt by upping the price of TeleAtlas. If Garmin gets stuck buying the company, they at least have the advantage of being able to afford it, and they have a longer history of acquisitions, which implies to me a better ability to integrate TeleAtlas. It will be interesting to see how this develops. Unfortunately, I'll be watching from the sidelines.
Wednesday, October 31, 2007
Implied Volatility (updated)
I've been continuing my research into options strategies. Earnings season is here again, which always causes a spike in implied volatility. GRMN released it's earnings this morning. Yesterday, the implied volatility of at the money calls were in the 80s and 90s. Today, they are in the 60s. I suspect they will continue to fall for a couple more days.
Implied volatility is the free-market version of statistical volatility. SI indicates how much the underlying stock actually fluctuates, while VI indicates how much people expect it to move. What's this mean for options? Before major events, like earnings releases, IV spikes, as do options prices. Thus, much of the movement people expect is already priced into the option. In general, right before earnings is a bad time to buy options. However, if you own shares in the underlying stock, writing covered call options is very good, or if you have cash on hand, you can make a quick 2-4% by writing cash secured puts.
Anyway, in my research, I found a great site for finding highly volatile options: http://www.schaeffersresearch.com/streetools/filters/implied_vol_filter.aspx
Here, you can specify a minimum stock price, minimum open interest, and a % out of money maximum something that I don't understand. I don't know exactly what all the filters in the Power Tools tab do, this one included, but I like sorting by the 'Call Implied' column. Unfortunately, the filter is confused by recently split stocks, where a $10 stock with a $20 strike will trade at $2 (the $20 strike option was written before the split, and the options trading house hasn't fully updated everything), so it looks like the $20 strike is trading abnormally high, when in actuality, you can't really trade it. It will also show a lot of $5 stocks with a $7.50 strike trading at $0.10. This isn't a high enough price to make much money writing options, sadly. To avoid the latter problem, I like to specify a minimum stock price of $6. Higher priced stocks have closer strike prices.
Using the sorted 'Call Implied' column, though, I've found HYTM. I don't quite know what to make of it, yet, but it's a $6.50 stock with a $7.50 November 2007 call option price of about $0.70. That means people are willing to pay a 10% premium betting on a 15% move in one month. Admittedly, HYTM's earnings is on November 5, so I don't know what the long-term IV is like. This may be a stock only worth writing options against this one time. Also, Google Finance's stock page for HYTM shows a news story where the state of Washington kicked out HYTM's drug rehabilitation cocktail because it didn't work. Collecting a 10% premium isn't a good idea if the underlying company goes broke.
Either way, I went ahead and bought 1200 shares and wrote 12 call options for $6.45 and $0.65, respectively. After commissions, I made about 9.7%, which I will fully realize on November 17. Then I'll be able to see how much a regular month's option is worth. I may end up bailing out after that time. Or, I may get my shares called away at $7.50, giving me a total profit of ~25%, instead. I can live with that.
Updated at 3:00pm
HYTM announced a double blind study, so the stock price shot up to $7.30 (+0.85 over purchase price), and DXUKU (Nov $7.5 calls) are now at $1.10. So, I missed out on some options premium profit, but at this rate, it's looking like that 25% profit on November 17 will be happening. I can still live with that.
Implied volatility is the free-market version of statistical volatility. SI indicates how much the underlying stock actually fluctuates, while VI indicates how much people expect it to move. What's this mean for options? Before major events, like earnings releases, IV spikes, as do options prices. Thus, much of the movement people expect is already priced into the option. In general, right before earnings is a bad time to buy options. However, if you own shares in the underlying stock, writing covered call options is very good, or if you have cash on hand, you can make a quick 2-4% by writing cash secured puts.
Anyway, in my research, I found a great site for finding highly volatile options: http://www.schaeffersresearch.com/streetools/filters/implied_vol_filter.aspx
Here, you can specify a minimum stock price, minimum open interest, and a % out of money maximum something that I don't understand. I don't know exactly what all the filters in the Power Tools tab do, this one included, but I like sorting by the 'Call Implied' column. Unfortunately, the filter is confused by recently split stocks, where a $10 stock with a $20 strike will trade at $2 (the $20 strike option was written before the split, and the options trading house hasn't fully updated everything), so it looks like the $20 strike is trading abnormally high, when in actuality, you can't really trade it. It will also show a lot of $5 stocks with a $7.50 strike trading at $0.10. This isn't a high enough price to make much money writing options, sadly. To avoid the latter problem, I like to specify a minimum stock price of $6. Higher priced stocks have closer strike prices.
Using the sorted 'Call Implied' column, though, I've found HYTM. I don't quite know what to make of it, yet, but it's a $6.50 stock with a $7.50 November 2007 call option price of about $0.70. That means people are willing to pay a 10% premium betting on a 15% move in one month. Admittedly, HYTM's earnings is on November 5, so I don't know what the long-term IV is like. This may be a stock only worth writing options against this one time. Also, Google Finance's stock page for HYTM shows a news story where the state of Washington kicked out HYTM's drug rehabilitation cocktail because it didn't work. Collecting a 10% premium isn't a good idea if the underlying company goes broke.
Either way, I went ahead and bought 1200 shares and wrote 12 call options for $6.45 and $0.65, respectively. After commissions, I made about 9.7%, which I will fully realize on November 17. Then I'll be able to see how much a regular month's option is worth. I may end up bailing out after that time. Or, I may get my shares called away at $7.50, giving me a total profit of ~25%, instead. I can live with that.
Updated at 3:00pm
HYTM announced a double blind study, so the stock price shot up to $7.30 (+0.85 over purchase price), and DXUKU (Nov $7.5 calls) are now at $1.10. So, I missed out on some options premium profit, but at this rate, it's looking like that 25% profit on November 17 will be happening. I can still live with that.
Subscribe to:
Posts (Atom)