NG is coming down again, probably due to the inventory report and more, but I'll wait as well.
Thursday, May 5, 2011
I wouldn't touch.
Gold, silver, oil etc are dropping. It sure looks like a bargain compared to where it was a few days ago or based on the trends. However, I do not think this is time to get back in. When markets are trending up, the down move should be slow even if by nature it's faster to go down than up.
Wednesday, May 4, 2011
All 20/20
It's been a long time since my last post due to family issues. I'm even not sure if anyone stills visits here.
I made an important decision in the mean time. I don't think day-trading fits my personality. I think I can make it work eventually, but is it worth it? I spent way too much time. For some people, yes, but not for me. I have a full time job with a family to support. With health-insurance, house payment and too much uncertainty, I don't think I can gamble. If I were a single, I'd do it in a heart beat.
I finally rolled my construction loan for the new house to a permanent loan. I was so attempted to 5-year or 7 year adjustable mortgage because I know I'll probably move, but at the last minute, just in case, I might still stay, so I decided to go with 30 year fixed.
The whole refinance was a joke. Since my property is something you'd see in West coast, certainly not in Midwest, banks considered this as an unusual property. It has lots of green and modern building features and everybody said, 'oh great', but when it comes to property value, 'oh, we just can't find any matching house, so we can't give you value.'
The first appraiser's value was $170K cheaper than the second appraiser. The second appraiser's value is about $75K cheaper than what I spent, which was still fine. But I question about the frist appraiser's work. Sure radiant heated floor on both upper and lower levels, solar panels, insulated concrete forms, R-9 windows with krypton etc are not popular, but I was thinking if no one starts appraising the value of the house correctly about green building, no one would build that way.
Since I put a lot of cash down during construction, I wanted to a cash-out up to 80% of the value, but with so much frustration with banks, I was glad to be able to refinance and get some cash out. Hopefully, a few months later, I'll do a HELOC for more cash after my credit score goes back up. There are still a lot to be done around the house, but man, I'm exhausted, so I'm not going to worry about it for now.
Anyway, by the time the little cash-out arrived to my bank, Nat gas price was around $3.8. I was actually eying on NG for a while. I saw it dipped around $3.75, and it sure seemed like a bargain to me, which was why I was trying so hard to take a good cash out. The risk was greater since my account was not big as before, I didn't have a lot of room to work with. I could start selling $4 puts and maybe $3.5 puts, but not more than that due to the size of account.
This time, instead of using RJO as a broker, I just put everything to ThinkOrSwim. The ACH took 3 days and boy, during that time NG shot up to already 4.25. The April contract's premium was diminishing so fast, so if I wanted, I had to go in for May contract. In 20/20, if my money was clear a day earlier, it would have been an easy $2K trade. But all 20/20, isn't it. I was then looking at May 4.25 put, but I decided to wait. When I don't get in, markets go in my favor, right? As NG went up, the inflated value of puts got deflated, so puts were no longer attractive. Again, it would have been a nice $1K trade. 4.5 puts are too risky, so I moved on.
I then looked at AAPL. I wanted to use ThinkOrSwim (TOS), so that I can trade both futures and stocks. I love Apple products. I keep an eye on how iPhone buyers turn into Mac, iPads etc. I know how hard it was to buy iPad2. Fundamentally a very strong company in my opinion. The last time I traded AAPL, it was around $150. I made good money, but certainly I didn't hold until $350.
Chart was actually pretty good too. It was drifting down towards to earnings and it even dipped below a strong support level. To me, it's not a new leg down. It's more for stop-runs. Everybody knows stops were sitting there below a support. Even I'd try to see if I can run some sell stops because I can always keep selling and dump everything to buy them back.
This was a perfect candidate for earnings options play. Premiums for calls were low because it was heading down for a period of time. In the worst case, if I bought an $1K option, based on AAPL's volatility, my max risk was about $500 whereas my gain was about $1500 per contract. But at the end, I just chickened out because of bad memories on earnings. Again all 20/20.
I have one more. The last week, I started looking at Silver (SI). Not on buying side, but to sell side. I saw SI reached around 50 and it started doing topping patterns I saw before. I had a few options. Buy puts or sell calls. I especially like selling call side because of premium inflation on call side. Out of money calls were going for some crazy amount! SI didn't necessary had to go down, if it just hung around, I would have made good money.
Of course, I didn't want to sell calls naked due to crazy risk in SI. My strategy was to sell 50 calls and buy 51 calls. That way, if SI kept going up, my max loss would have been $1 whereas premium I could have collected was $3500. Its reward:risk was not as good as AAPL, but with options' spread, it's always the case. So I went to TOS, and placed an order. For some reason it kept rejecting my order saying I couldn't sell 50 calls. I do have permissions to sell and I have enough funds for margin. I never traded futures options through TOS, so there must be wrong with settings. However, jinks or not, I just decided not to bother this trade. SI was around 49-50 at that time. Today, sure enough, it's being traded at 39.
This only money I made during the last month was about $1K playing my retirement account. I've been betting on real estate securities. Everybody is so pessimistic about real estate. I'm pessimistic too, but I'll do the opposite. I'm not risking too much anyway.
There goes all my 20/20 stories. I'm not sure what my next plan is, but I'll report back.
I made an important decision in the mean time. I don't think day-trading fits my personality. I think I can make it work eventually, but is it worth it? I spent way too much time. For some people, yes, but not for me. I have a full time job with a family to support. With health-insurance, house payment and too much uncertainty, I don't think I can gamble. If I were a single, I'd do it in a heart beat.
I finally rolled my construction loan for the new house to a permanent loan. I was so attempted to 5-year or 7 year adjustable mortgage because I know I'll probably move, but at the last minute, just in case, I might still stay, so I decided to go with 30 year fixed.
The whole refinance was a joke. Since my property is something you'd see in West coast, certainly not in Midwest, banks considered this as an unusual property. It has lots of green and modern building features and everybody said, 'oh great', but when it comes to property value, 'oh, we just can't find any matching house, so we can't give you value.'
The first appraiser's value was $170K cheaper than the second appraiser. The second appraiser's value is about $75K cheaper than what I spent, which was still fine. But I question about the frist appraiser's work. Sure radiant heated floor on both upper and lower levels, solar panels, insulated concrete forms, R-9 windows with krypton etc are not popular, but I was thinking if no one starts appraising the value of the house correctly about green building, no one would build that way.
Since I put a lot of cash down during construction, I wanted to a cash-out up to 80% of the value, but with so much frustration with banks, I was glad to be able to refinance and get some cash out. Hopefully, a few months later, I'll do a HELOC for more cash after my credit score goes back up. There are still a lot to be done around the house, but man, I'm exhausted, so I'm not going to worry about it for now.
Anyway, by the time the little cash-out arrived to my bank, Nat gas price was around $3.8. I was actually eying on NG for a while. I saw it dipped around $3.75, and it sure seemed like a bargain to me, which was why I was trying so hard to take a good cash out. The risk was greater since my account was not big as before, I didn't have a lot of room to work with. I could start selling $4 puts and maybe $3.5 puts, but not more than that due to the size of account.
This time, instead of using RJO as a broker, I just put everything to ThinkOrSwim. The ACH took 3 days and boy, during that time NG shot up to already 4.25. The April contract's premium was diminishing so fast, so if I wanted, I had to go in for May contract. In 20/20, if my money was clear a day earlier, it would have been an easy $2K trade. But all 20/20, isn't it. I was then looking at May 4.25 put, but I decided to wait. When I don't get in, markets go in my favor, right? As NG went up, the inflated value of puts got deflated, so puts were no longer attractive. Again, it would have been a nice $1K trade. 4.5 puts are too risky, so I moved on.
I then looked at AAPL. I wanted to use ThinkOrSwim (TOS), so that I can trade both futures and stocks. I love Apple products. I keep an eye on how iPhone buyers turn into Mac, iPads etc. I know how hard it was to buy iPad2. Fundamentally a very strong company in my opinion. The last time I traded AAPL, it was around $150. I made good money, but certainly I didn't hold until $350.
Chart was actually pretty good too. It was drifting down towards to earnings and it even dipped below a strong support level. To me, it's not a new leg down. It's more for stop-runs. Everybody knows stops were sitting there below a support. Even I'd try to see if I can run some sell stops because I can always keep selling and dump everything to buy them back.
This was a perfect candidate for earnings options play. Premiums for calls were low because it was heading down for a period of time. In the worst case, if I bought an $1K option, based on AAPL's volatility, my max risk was about $500 whereas my gain was about $1500 per contract. But at the end, I just chickened out because of bad memories on earnings. Again all 20/20.
I have one more. The last week, I started looking at Silver (SI). Not on buying side, but to sell side. I saw SI reached around 50 and it started doing topping patterns I saw before. I had a few options. Buy puts or sell calls. I especially like selling call side because of premium inflation on call side. Out of money calls were going for some crazy amount! SI didn't necessary had to go down, if it just hung around, I would have made good money.
Of course, I didn't want to sell calls naked due to crazy risk in SI. My strategy was to sell 50 calls and buy 51 calls. That way, if SI kept going up, my max loss would have been $1 whereas premium I could have collected was $3500. Its reward:risk was not as good as AAPL, but with options' spread, it's always the case. So I went to TOS, and placed an order. For some reason it kept rejecting my order saying I couldn't sell 50 calls. I do have permissions to sell and I have enough funds for margin. I never traded futures options through TOS, so there must be wrong with settings. However, jinks or not, I just decided not to bother this trade. SI was around 49-50 at that time. Today, sure enough, it's being traded at 39.
This only money I made during the last month was about $1K playing my retirement account. I've been betting on real estate securities. Everybody is so pessimistic about real estate. I'm pessimistic too, but I'll do the opposite. I'm not risking too much anyway.
There goes all my 20/20 stories. I'm not sure what my next plan is, but I'll report back.
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