For the life of me.. I keep paying this guy $30 or whatever it is a month.. and yet.. I’m not taking advantage! Well, truthfully.. the reasons aren’t anyone’s’ fault, I think the reason is more of a funding problem at to why I’m not trading much using his recommendations.

It’s certainly not from lack of emails that he sends out (usually more than 3 a day), nor the problem with the actual trades or pennystocks that he alerts us on. In fact the stocks he alerts on are usually very valid and certainly worth playing for the most part. I think part of the reason is that I get the emails or alerts likely 3 or 4 minutes after he makes the trade. By this time, the stock has already made a significant move for the most part, not always, but I’d have to say 90% of the time.

That’s not the reason I don’t trade them however, like I say, it’s more a matter of funding. Right now, I’ve had my money tied up in one stock in my ThinkOrSwim trading account, that stock is DRYS (averaged in at 5.98 an 6.66), using buy/write strategies to slowly make a good percentage over time. So far this has been working great, hopefully it will continue and I should really open up a seperate account to ‘play’ with.

I was going to try his latest short which was GVPB, however thankfully ThinkOrSwim didn’t have the shares to short as Tim has so far lost $4000 on it as it’s soared to 0.80 at the time of this writing (the short alert came out at 0.56-ish). Not a big deal as Tim feels like Kanye on the MTV music awards in that he lost a lot of people some cash on that one and feels horribly. That said, there is a real chance that the stock is going to break down to nothing soon enough, it’s just that Tim can’t risk the cash, nor reputation on one play.

So I keep paying over $30 a month (price has now gone up to $50 USD/month) and I really don’t have much intention of quitting the service, consider it a type of business insurance that I keep it. I know that Tim is going to make money, after all.. the man has verified trades and is up close to 500% if not more so far (turning 12,000 to 72,000 in almost 2 years).. so why would I quit the service right now?

I’ve reviewed his service in the past when I renewed TimAlerts service as well as when I originally started with TimAlerts, and I will continue to keep you up to date on it.

I guess the reason that I’ve not posted much, is that I’m actually not DOING much. The markets for some mysterious reason keep going up, and for the life of me I’m waiting for a bit of a correction to occur. There is just too much uncertainty to keep it moving forward in my opinion, what’s going on down there with our neighbours to the south anyhow? To think a few months ago in March the TSX index was under 8000 points, and it’s now hovering around 11500 at the moment..well, that’s a pretty darn good recovery if you ask me! Of course, you’d only realize those nice 40% returns if you invested at the bottom (which I realize no one did as they were way too busy watching their account balances dwindle)

I can tell you that I have once again begun to trade with CMC Markets… I can’t help it. I’ve given up poker for the most part, there’s something about the ‘knowledgeable gamble’ that really attracts me, and the leverage and ease of use for CMC Markets really attracts me. I’ve been playing Oil Futures almost exclusively as I really like the way it moves, and as long as I don’t hold over major announcements (such as crude inventories, etc).. the CRAZY swings aren’t as common.

The good news is that since I’ve put in $1000 not even a month ago, my balance is now at $1600 and that’s after cashing out $115 after about 2 weeks. Hmm.. 75% since the 18th of August. I’ll take that thank you very much.

I still own DRYS in my long-term account, which is kind of nice since it went up around 8% yesterday alone, nothing spectacular going on, so I will likely do another Buy/Write strategy soon if DRYS keeps moving up.

My Smith Maneuvre is still up in the air. I need to sit down and figure out what I’m going to do with the money that I’ll be borrowing to invest… I have close a lot of money that I could put somewhere however I’m trying to decide the best way to go long-term. I wouldn’t be opposed to a no-load (no fees/commissions) mutual fund, however I’m starting to debate that it’s going to give me the returns I want. I guess a fella has to get off his ass and do something about it if he wants to start soon. I still love my idea of putting $500 a month into one equity/mutual fund/etc.. in order to dollar cost average. There are lots of people that don’t like this strategy, but I think it’s a solid way to invest. What’s the harm in trying anyhow?

In the meantime, trying to decide how to purchase a new car for Liz.. will post about that soon.. Lease vs Own vs Used vs New.. GAH!

It ends up, I DID in fact get the dividend (they must have been mistaken) of .8477 per share.. so since I owned 100 shares.. that was $84.77 which I was paid out in a special dividend. SWEET!

However, that dividend somehow adjusted the options which I sold as well.. so as it turned out.. they expired on Friday and even thought the stock was trading at 4.68 I believe at that time.. my shares were called away, and the put expired worthless.

End of story, I made $90 on the trade in total after commissions. Which, from a starting point of $380, represents a 31% profit. I’ll take it! (Especially since the stock was down 1.22 from my buy point of 5.90 which would have been a $122 loss had I kept just the stock and not sold the options).

SOOOO.. I’ve done it again.

I’ve purchased DRYS at 6.00 and sold the $5 SEPT put/call at 0.40 and 1.34 respectively. Giving me a cost of $426 today (plus commissions of $20 total).

As I write this I’m down $9.50 on the trade, which is starting out just like the last one..  but I’m really liking my entry price of this stock which I’ve liked for a long time. I will sit on this trade for some time and see what transpires.

As tough as it is to understand options sometimes, there are times when it’s sort of a no-brainer. I will try to illustrate this concept here. However, a few things have to be pointed out.

1. this is a bullish play and as I see it, a good way to develop a portfolio
2. you need to have enough cash to pay for 200 shares of the stock you are looking at

The best way to describe these plays are by examples.. so I will use a live one as of today.

DRYS – Dryships

I love this stock and think it’s going places.. (even if I didn’t, I’d use it as an example). Right now it’s trading at $7.75 (up 6.41% on the day). Here’s a chart:

Now.. in order to get this stock for a good discount, I will sell 2 options at the same time. I am going to sell the July 7 put/call. This is the prices on those:

Now, focus on this line for minute:

So you can see to sell the $7 strike put and call, I would gain 1.55 (for the call) and .85 (for the put) which adds up to $2.40. That is $240 in my bank account.. thanks very much!

What I will also do is buy 100 of the stock at $7.75 (costing me.. yes.. $775).

Now do the math on that? $775 – $240 = $535. My entry price cost me 45% less then if I had bought the stock alone. Nice eh? Ok that sounds a bit too good to be true.. so let’s play out the scenarios. Remember however.. we got 100 shares for $5.35 when everyone else paid $7.75.

1. Stock goes to $10 by 3rd week of July (options expiry date)

In this case.. since we’ve sold a call option at $7.00.. that little option forces us to sell our 100 shares for $7.00 on the third week of July when the options comes into play. However since we paid $5.35 for them, that’s a 45% profit in what.. 7 weeks? I’d take that anyday!

2. Stock goes to $6 by 3rd week of July (options expiry date)

All of a sudden the stock drops to $6, and since we sold the put option at the $7 strike price, we are now forced to buy 100 shares at $7.00. Sucky eh? Well.. actually no.. now we have 200 shares (the 100 we are forced to right now at $7.00  and the 100 we purchased originally back at $5.35). Simple math means we have puchased 200 shares at an average cost of 6.18 or so. So at this point you have to ask yourself if you are still ‘bullish’ on this stock or not. But more importantly since our average cost is only $6.18, we’re only down .18 a share at this point, or $36.. compared to the rest of the world whom bought 100 shares at $7.75 at the same time.. and they are down $1.75 a share or $175.

I don’t need to tell you that if the stock goes back up to $7.75.. you will have earned $1.57 per share x 200 shares or $314 while the guys sitting on their shares are just now happy to be back at $0. (Oh and by the way? that’s just over %25 percent profit).

I guess it’s like cost averaging which you stock people will know about, and for those of you who don’t know what I mean? Well.. send me an email or comment and I’ll explain. If you’d like to know some more information on this strategy and some additional plays in combination with it.. visit the source at the link below!

How To Buy A Stock For A 15-20% Discount | Phil’s Stock World.

A very good resource I use is looking at the S&P going to 600 – 650.. while most (like myself) are expecting at least some sort of bounce today or the next day.. as we have’ had over 8 ‘down’ days in a row.

I’m still in DRYS looking for something special.. but not finding much.

Lost a bunch on my other account playing GNW.. unbelievable that this one is down to 1.30 at the time of this writing.. It’s hard to make money on the upside right now when you don’t know how limited it is.. I think that’s what the problem is. You get in, but have no idea when to get out.

Anyhow.. GOLD has been an interesting play lately, as it breached the $1000 mark and has now re-traced back down to $960.. more downside I believe to come, but on the long term I think GOLD is going to rebound first before any of the equities do.

GOLD – Daily

Now I’m pretty much back to square one.. which sucks hard. But that’s ok.. I consider them all learning experiences.. and I plan on making out of this eventually. Anyhow, I’ve gone long DRYS. I know.. I know.. LONG?? Are you crazy??

Well I sort of am..and DRYS is nearing it’s multi-year low again.. and when this sucker rebounds.. it rebounds huge..

I’m in at 3.66.. going for another homerun here.. we’ll see how it turns out!