12/14/2023 0 Comments Using unusual options activityThe median sales price of new homes came in at $249,700, up 7.4% from a year ago but 10.3% lower than 1 month ago.New home sales rose by 8.3% in June, the fastest pace since May, 2008 and 38% higher than a year ago.Fed Chairman Bernanke promised to9 intervene if rising mortgage rates negatively impacted the housing recovery The national average for a 30-year fixed rate mortgage rose to 4.07% in June, up from 3.54% in May and the highest level since June, 2012.This represented the 16th consecutive month of year-over-year price increases The national median existing-home price in June was up 13.5% from a year ago $214,200.In June, there was a 5.2 month inventory of homes for sale up slightly from the 5.0 in May.Sales of existing homes were up 15.2% in June from a year ago.The strengthening housing market is a major contributing factor to our assessment: This past week’s reports did nothing to change the bullish outlook this site has for our economy and for the stock market. My next live seminar: The Money Show San Francisco: The latter can be much too risky and could ultimately get us into trouble (wink, wink). As I say in my books and DVDs, we look to hit singles and doubles, not grand slam homeruns. I will be shocked if there is no investigation and those involved are innocent until proven guilty. Whether this is an example of incredibly lucky speculation or illegal trading activity is for others to determine. The time value of the $9 call would then approach zero and we could have sold the stock and used the cash to generate a second income stream or at the very least, maxed out the trade. Had we taken a covered call position with LEAP we would have generated the call premium plus any profit up to the strike price. So what does this all mean for Blue Collar Investors? Well that’s the good news…nothing negative for us. Assets and accounts have also been frozen for potential illegal trading on Smithfield Foods and Heinz Co. Recently, the SEC has been investigating insider trading on Onyx Pharmaceuticals Inc. I have been hypothesizing the past few years that the playing field for average retail investors is leveling off thanks to the hard work of the SEC and FINRA. Here is a chart of LEAP showing the gap up in share price on July 12th:Īccording to Trade Alert, an option analytics company, there was unusual trading patterns in a 3-minute window just before market close where substantial numbers of call options were purchased. That would move the calls strike price $6 in-the-money. I think you know what’s coming!Īfter market close, there was an announcement of a takeover bid by AT&T for $15 per share, almost doubling the value of the share price. By days end, 7139 contracts were traded, all but 350 were calls as traders were taking a bullish stance on this stock. It appeared to be a normal trading day until the last hour of trading when option volume went through the roof. The average daily option trading volume for this company is 1320 contracts over the last 3 months. Covered call writers could generate an initial profit (ROO) of 1% and 5%, respectively. In the late afternoon, the share price was near $8 per share, the July $9 call option was priced $0.10 and the August $9 call $0.40. (LEAP) which is a takeover candidate by AT&T. The day is Friday July 12th and the stock is LEAP Wireless International Inc. In today’s article I will ask you to draw your own conclusions. Still others look to cash in using illegal activities. Other investors look to make a lot of money in a short time frame by undertaking much greater risk than we do. In time, it could lead to financial independence. Covered call writers are average retail investors looking to generate monthly cash flow in small but consistent increments and then compounding those profits.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |