I Agree With Krugman – But Disagree

The wonders of the Nobel Prize Winning economic laureate Paul Krugman. I would never in 1 million years believe that I could agree with a single sentence this man writes. But enter his latest piece “This Is Not A Recovery”:

[...]this isn’t a recovery, in any sense that matters. And policy makers should be doing everything they can to change that fact.

For a man that achieved nobel greatness for integrating a few small fields of economics (read: not all that great), he is finally bringing some rational thought into economics, although, a bit late.

Beyond that one sentence, though, I still consider Krugman a quack. He may be one of the only people who hasn’t seen a connection between easy money policies plus government stimulus and the inevitable misallocation of resources that occurs when there is too little risk to borrowing money and not enough reward given to those who save. Continuing the consumption driven economy that we as Americans have enjoyed for the past 20 years.

Does anyone else not get the feeling that politics in general are leaving a bad taste in the mouths of most Americans? Nobody likes the Democrats and the Republicans are hated too. Its a political stagnation of sorts, where no one wins. I guess this is why I’m Libertarian.

Does Apple Know That iPod.app (for iPad) Has Bugs That Make It Unusable?

I really didn’t want to write this. Lets just say this: If I get an email, I get three little “Apple dings” from my iPhone 4, my 27″ iMac, and my iPad. No one builds devices like Apple, and the polish their software brings to the table has yet to be challenged by any competitor. How does a bug like this slip through the cracks? Surely someone down at QA at least attempted to play a music video?! I always enjoy having the music video to a song as opposed to just the song itself because you can put together a mix, throw it up on a big TV, and add life to a party (hey, its the college life!).

Feel free to link here or repost to get some attention to this bug. I wouldn’t mind a phone call from Tim Cook.

The Road To Nowhere Bug

How to reproduce:

Open iPod.app

iPod.app

Play a music video:

iPod.app

Stop the video:

iPod.app

What Happens?

Welcome to absolutely nowhere. This would make an excellent blonde joke. How do you occupy a blonde for hours? Play a music video and tell her to get back to her music without pressing the home button.

iPod.app

I want to be able to use iPod.app. Tim, the bug is #8172593.

Lucky Duck

After a less than stellar July performance, I am going to take a step back and reevaluate my trading strategy. This really doesn’t stem from the fact that that I had my first losing month (out of two, mind you), but more from realizing that what had become my “strategy” was really nothing more than trying to see what kind of option spread I could get the market to give me. If I hadn’t gotten shaken out of a few of my trades, mostly the trades with higher margin calls, July would have been more profitable than June.

I will be watching the markets and hopefully by the end of this week, I will have defined my strategy with something concrete and defined.

Expiration Looming

July options expiration is (un)quietly approaching. With the market making large moves in both directions during the life of the July options, I haven’t had very much time to keep everyone updated, or make my first podcast for that matter. I know everyone is wondering why I haven’t had the time. The answer? I have been too busy making sure I don’t lose my ass trading to worry about anything else. The good news, though, is that the losses will be very negligible, if any. I am eying a trade on the $SPX that could possibly put me into positive territory on the month.

Expect another post to come tomorrow with a little bit more detail about the trade (if I make it).

July Options Time — The Premier

In case anyone hasn’t noticed, I’m just a regular guy. I don’t even trade for a living! I would rather be programming, but when that just can’t occupy my time, the rush of trading is a really good outlet to put some energy into. As I learned last month, the key is to have patience getting into setups and keep to your strategy. With that in mind, I have gotten into a few small options setups that will expire in July. My overall market sentiment leans towards seeing choppy markets until the summer doldrums are over, possibly rebounding early Q4.

With that in mind, here is my current portfolio snapshot:

*Options spreads are listed Long Put / Short Put / Short Call / Long Call

SymbolExpirationStrikesProfit/Loss
$ANFJUL 1029/30/37/38 Iron Condor$(12.50)
$BPJAN 1170 Call$(57.50)
$RIMMJUL 1045/47.5/65/67.5 Iron Condor$(32.50)
$SPYJUL 10105/106/119/120 Iron Condor$(30.00)
$XJUL 1039/40/50/52.5 Iron Condor$45.00

As you can see, I only have one profitable trade as of this writing, which is really deceiving as far as the overall trade performance is concerned. $ANF had slightly anemic open interest on the long put option, so I had to pay a few more cents for it, which put the overall trade at $(12.50) starting out, $ANF hit a low of $31.90 today and closed well above those lows, giving it plenty of room should this stock decide to chop higher and lower.

$RIMM, my should-have-waited-till-after-earnings trade has seen volatility spike as it goes into what is becoming an important earnings call for the company, hence my losses on the options. $RIMM is actually setup very well to expire out of the money as it is at its mid-high point, perfect for when they miss earnings.

Only time will tell on these trades though, I look forward to developing my strategy further. I am also planning on starting up a daily or weekly podcast for all 11 of you that regularly read this blog. I just feel like options trading has some real potential to help out the retail investor, why not give my 2c on the subject! Look for the premier of “The Trading Desk” sometime next week, I’ll squeeze it in sometime between my 40/hr a week job, trading, and my upcoming iPad App.

June Expiration – Winners

With the market closing It looks like all of my current positions (except my $BP JAN 11 70 Calls) will be expiring out of the money, saving me the expense of having to close all of the positions and incurring added trading costs. Here is a snapshot of my portfolio as it stands:

SymbolExpirationStrikesProfit/Loss
$BBYJUN 1030/34 Put Spread$140
$BPJAN 1170 Call$(40.00)
$DEJUN 1050/52.5/60/62.5 Iron Condor$332.50
$QQQQJUN 1040/41 Put Spread$50
$RIMMJUN 1040/50/65/80 Iron Condor$510.00
$SPYJUN 10103/104/115/116 Iron Condor$140.00
$XJUN 1035/40/52/60 Iron Condor$444.00

All of these positions, except the $BP position will be coming off of the books at the close. Overall, even with the blown trade on $BBY, profit this month was a healthy 8%, or ~$850. I am currently looking towards my next plays for July expiration, and I will probably be writing a post on my methodology and trading strategy in the near-term. Happy Trading.

Testing Tomorrow

In following up with my latest post, tomorrow will be where I put my methods to the test. With my $RIMM and $DE positions nearing their boundary limits, tomorrow they will test their next resistance levels. With options expiring on Friday, I would love to hang on to these positions until then to avoid the cost of closing the trade.

Oh, $BBY closed down ~$2.50 ($38.50). My reactive selling yesterday cost me big money.

Options Positions Updates – June 14, 2010

Well, another trading day, and more lessons learned. The day started off with most equities gapping higher, $BBY being no different and gapping up ~$1.50. That drove its underlying options prices higher and killing my profits. Afraid of losing all of my hard earned profits, I jumped to close the trade (Short JUN 10 Calls @ $0.75) at $2.07. If you do the math, that is quite a loss. I lose more than 2x the premium on the contract.

Sad news, $BBY closed down $0.10 cents. Its contracts priced at ~$1.15. More math involved, but 100 shares in a contract * 5 contracts and you begin to see the losses incurred and the losses that could have been avoided.

What have I learned?

  • Trading on emotion is a quick way to losing profits.
  • Trade only on technicals, not emotion.
  • Trade at the close, not during the emotional open.

Notice anything? Emotion during trading is an an absolute killer. Trading strategy must be as robotic as possible to assure that exit probability stays at or above 50%. I emerge a smarter trader, keeping cool even as the market deals me my largest losses. I emerge at the end of the day, profits shrinking, but who’s complaining about 10% return in one month?

Portfolio Holdings – June 13, 2010

As promised, I am updating everyone on the current holdings in my portfolio. For reference, the iron condors are listed as long put, short put, short call, long call.

SymbolExpirationStrikesProfit/Loss
$BBYJUN 1030/34/41/45 Iron Condor$(177.50)
$BPJAN 1170 Call$(12.50)
$DEJUN 1050/52.5/60/62.5 Iron Condor$45.00
$QQQQJUN 1040/41/45/46 Iron Condor$(77.50)
$RIMMJUN 1040/50/65/80 Iron Condor$427.50
$SPYJUN 10103/104/115/116 Iron Condor$80.00
$XJUN 1035/40/52/60 Iron Condor$384.00

I am always looking for new positions and monday will be no different. Depending on how the market opens, I may look to get rid of my $QQQQ and $BBY holdings as they are my under-preformers right now. I may play russian roulette with $BBY and hold it until earnings, just depends on my appetite for risk at the close tomorrow.

Where To Go From Here

My life is crazy right now. I’m working two jobs, trading options in the afternoon, starting up a web design and development firm and a gold buying business, writing an iOS POS app that uses wireless bluetooth scanners (+BTStack), writing two iPad applications, trying to change ecommerce as we know it with a revolutionary new ecommerce platform, and on top of it all, I can’t keep my mind off of Austrian economics.

Its no wonder I have no clue what the hell to write on my blog, but I am going to try and keep everything relevant and segmented. If you are interested in my trading endeavors, I have a new “Investing” category listed above. I will be posting portfolio updates as well as profit/loss updates in this category.

I have also set up a new “code” category which will pertain to everything code/computers. Here I will try and label the posts with the projects that they pertain to, this way everyone can follow my projects more closely. I will also be posting weekly updates on the status / current work on all of my projects, plus any new ones I have started working on.

I hope everyone (all 11 of you that visit per day) can bear with me as I make this transition to a more thought out blogging style.

Side Project — PleaseSnipe

I finally got my side project rolling today! Its an Ebay Sniper that allows you to automatically place bids on items within the last few seconds of an auction. Check it out at: PleaseSnipe.com.

Note that this is just a side project I completed to give my mind some time to “play” while working on my new startup: ObjecteDB.

CoreNetwork — Beautify CURL By Using PHP Objects

We all know that using CURL in PHP is atrocious. Who wants their beautiful code to look like this:

    $c = curl_init($cURL);
    curl_setopt($c, CURLOPT_URL, "http://tockx.com/s.php");
    curl_setopt($c, CURLOPT_HEADER, 1);
    curl_setopt($c, CURLOPT_RETURNTRANSFER, 1);
    curl_setopt($c, CURLOPT_POST, 1);
    curl_setopt($c, CURLOPT_POSTFIELDS, $strParameters);
    $strPage = curl_exec();
    curl_close($c);

Plus, it just seems so repetitive. When you a guy like me, and your build a few RESTful applications, its tough to let your code get “uglied” with code that looks out of place — so I wrote CoreNetwork, the best way to use curl with PHP. Using CoreNetwork, you turn your old, dirty curl code into something beautiful:

    $net = new CoreNetwork()->url('http://your-rest.com/api/noun');
    $get = $net->get()->returned();

Its easy to use and is available at GitHub. Go check it out, it will make php and curl so easy and beautiful.