I have finally launched the new site... take a look

www.optionaddict.net

However, due to some outrageous traffic, things are moving a bit slow today, and some pages are timing out before they completely load. I am working on the solutions so please be patient. Do try to move your comments and feedback onto the new site.

Thank you!

Posted by Option Addict at 1:56 PM | Permalink | Comments

I pulled this comment off of last nights post. Please take a look....

OBSERVATION FROM A PASSIVE OBSERVER: I wanted to make a neutral comment to what was once a great blog site. Yes that is correct, once was a great site. The few that make the majority will start to scream now about the Blog Awards but you all know that it is a false standing because of your "pumping" of the votes with fake email addresses and multiple votes by the vocal minority.

This site has become a "Peyton Place" full of desperate housewives and husbands" - if you are in doubt then step back and read with an open mind the garbage that spews from your keyboards daily - again from the noisy few. Again you will rise up and contest this statement but the facts are the facts.

How could you begin to think that this is a trading blog? It is a fishing hole whereby Jeff in his charitable fashion hands out his watchlists week after week. Reality check? How many of you can operate without outside influences or inputs to scan for, analyze, execute and monitor your own trades? My guess would be not many!

Here is a challenge to the noisy majority: try keeping ALL comments and thoughts focused on trading for a week on this site and see how productive it becomes to not only you but the quiet minority.

I know that your screaming and threats will soon fly back and fill the comments section with rhetoric and garbage directed towards my comments. How about not reacting in a predictable manner and focus on trading. If you want or need a social outreach forum then start a group chat that will allow you to interact - my guess is that it would not succeed and there would only be the dominant few - still in disbelief? Scan the comments for who is actually posting and see a short list of names that control the blog.

To all the silent minority that visit here to try and actually learn about trading, hang in there. Hopefully Jeff will once again return to the methods he used to employ when the site was trading focused.

Have a great day TRADING!!!

Silent Bystander Speaking Out

Silent Bystander, thank you for making your comment. In fact, I would love it if you would try to get in contact with me at some point today.

As a community we have encountered this topic before, but I want to bring it back into the spotlight for a public opinion, and to hear some of YOUR feedback about it.

To be honest, I don't read the comments anymore. In fact, the last time I felt I was able to engage with the community was over the weekend when myself and a few others chatted about option greeks. I have said it before and I will say it again, I don't have problem with a little banter that is off topic. I encourage it. In fact, each day after I write "the meat" of my daily post, I try to throw in some off topic material such as music videos, talking about sports, reality t.v. or something else to shake things up a bit. As you've noticed, it is a very small portion of my content.

It is troublesome to see a good post get immediately inundated with comments that do not relate to the topic whatsoever. However, when it is trading ideas, or questions relating to trading, most readers are willing and able to engage immediately, including myself. I agree with the comment that the blog has definitely changed over the last few weeks/months and I am not quite sure it is for the best.

I have mentioned that I have been involved in some changes recently. I have developed and am currently beta-testing a new site, and I have a lot of tricks, ideas, and valuable content up my sleeve. This is part of the reason why I find it impossible to keep up the the comments.

I really want to do what is best for the community, and bring the cream back up to the top. As it stands, it drives valuable readers/contributors away. I would like to know what everyone's thoughts are on the topic.

Please, leave me a comment about this topic. Just this topic.

Even if you lurk on this site, please come out of the dark. Even if you don't agree, tell me your opinion. Let's use this as an opportunity to rally around building an efficient trading community, which is what the blog was intended for.

Posted by Option Addict at 9:54 AM | Permalink | Comments

Inquiring minds want to know, what I was watching this week and last week to determine my stance on the market. If you remember a couple weeks back, I called the end of a nice rally in the SPX. I typically watch the averages on an intra-day basis as I am normally day trade in index futures or swing trade index/etf options. Let's take a look at that same 20 day chart as of today... On the 15th, you see the big break of support that I had written about. On the 17th, a successful re-test, and from then on a nice downtrend. On the 24th, we failed to make a lower low, which hinted to me that we had established a bottom. We confirmed it by creating a higher high on the 25th. Now you can see that higher highs and lows are developing.

This doesn't mean I am overall bullish on the market. Well, I am but recently that feeling has been diluted by a few things. Primarily some weak earnings, $90 oil, and the market breadth. The NASDAQ's stellar performance has been fueled by three stocks...RIMM, AAPL, and GOOG. In my mind that tells me it is not as strong as everyone thinks. In fact, Semiconductors are typically a leading indicator, and take a look at the SOX... That to me is a major reversal that I have been waiting for for quite some time. I want to see how the market reacts outside of earnings. Good ol' MSFT pumped the market full of optimism, but that doesn't mean it can't be taken away.

I want to take a moment to review a few things. In fact, I was debating a follow up video to review my watchlist. Let's see what time permits for me today.

Take a look at MCRS. I mentioned several days back that I liked the set-up...I hope you enjoyed the reward... How could I not bring up ISRG!? I know a few people took this idea on my last watchlist, nice work!
Also, those that read my rants about what I am trading in know that I have held GLDN forever. This has been one of my longest running trades of all time, next to VIP. Look at it go!
Make sure you haven't forgotten about GLD. It's a great hedge as your dollars are becoming worthless.
Anyhow, make sure you are still watching the stocks in my watchlist, and the shopping list I gave out yesterday. There are still some good trading ideas built into those. Stay tuned as I might run another video later today...

Recommendation: If you read this blog daily, the market will reward you with profits and plenty of trades.

Long: Fridays

Short: the Marketcast

Disclaimer: Tom Petty is definitely an Option Addict

Posted by Option Addict at 8:09 AM | Permalink | Comments

I want to send out a big thank you to all of my readers who so loyally stepped in and offered up a vote for "best business blog" and "best video blog" at the bloggers choice award site. It looks like I am a finalist in those two catagories, and will not know if I have won or not until November 10th in Las Vegas.

Even though it was not a big deal to me if I won or not, I do want to let everyone know that I appreciate the support that you all offer, regardless of taking home the crown.

Thanks everyone!

Posted by Option Addict at 4:15 PM | Permalink | Comments

Boston pulls off a huge win in Game 1 last night by a margin of 13-1. That was the game they needed to win in order to take this series. Rockies fans, I am so sorry...but at least you got good seats to the big dance.

If you are not long some CME, or any exchanges at this point, look a little closer at them. With record transaction volume and commissions, it's hard not to be loving these to the upside.

At the same time ISRG, FLIR, ESRX, LFQX, NUVA, MON, LFG, CNX, SOHU, ALXN, TSCO, GLYT and EMC have elevated my mood today.

If you want a similar feeling, you need to be watching the following today...

CNH, SYNA, OSTK, PX, TRMB, GME, ERTS, RCI, and IIG.

But if you are bearish...

LFG, CYH, SVU, COLM, RAIL, THQI, OMX, SII and AVTR...

...If you are in the market for good looking set-ups that is. Or if you just want to make some money with me today.

I am going to keep it short and sweet today, and go out with some 311...

Recommendation: Stop whatever it is you are doing today and make money.

Long: Colorado Readers

Short: Colorado Rockies

Disclaimer: 311 has offered to play at our Option Addict awards ceremony in Vegas.

Posted by Option Addict at 10:25 AM | Permalink | Comments

Posted by Option Addict at 2:58 PM | Permalink | Comments

My life is starting to return to normalcy... but don't get your hopes up. For those of you that registered for my advanced options open house, you have probably received an e-mail apologizing for the technical difficulties. I have received more e-mails, business/personal/marketcast than I think I have ever received in my entire life. If you haven't gotten a response, don't take it personal. Normally I delete all my e-mails, but lately I am trying my best to reply. If you get a rather short quick response from me, and you think "what a jerk" remember that it was one of hundreds I had received on the day.

As I have warned, earnings season has taken us all over the map. Technical Analysis takes a back seat during times like this. However, it impacts you and I when you see the VIX in the mid 20's. Make sure you put that on your radar, I will be talking about it a lot more at these levels.

Today I felt like I should talk about trading style. The other day I talked about creating an investing style and creating a foundation that consists of at least 7 basic principles. But once you've done this, you need to focus on what vehicles you are going to use to take you to where you want to go.

I have often mentioned that I think every individual looking to get started in the market should take an online exam. Similar to what you would go through over at eHarmony.com. If you not familiar with eHarmony, they have constructing a very intense, intrusive, complicated but yet effective personality profile to offer help to those getting into the relationship market. They help you to find someone just as crazy, emotionally inept, and unreliable as you are. In my opinion, it was a great way to corner the market. I tip my hat to them.

I know none of this from experience, but have concluded my results from 3 minutes of research. Anyway, my point was... wouldn't it be just as effective to have a questionnaire ready when you send in your check to fund your new account with an online broker dealer? This would make sure that you have access to the only tools that are compatible with your goals, level of risk tolerance and emotional instability? Over the years, broker dealers have become very laid back in the options approval process. When you notice that the nice older lady that has been retired for 30+ years has the ability to trade naked options with no former trading experience, you know the registered options principles at these firms are going to wind up in hell.

Consider what strategies are suitable for you. I normally ask someone who is in the process of deciding on their trading style these few questions...

• Are you generally a risk taker, or are you conservative in your decision making processes?


• Are you comfortable being wrong? If so, how often?


• Are you patient?


• What is your time frame with trading/investing?


• What are your financial goals?


• How emotional are you when it comes to money? Are you trading with money you can lose?

There are plenty more, but you get the point. I think most traders have to take one of two roads in trading options. High probability or high performance. I chose high performance. This style of trading seemed to fit well since I am a risk taker, I am comfortable being wrong a lot, I am very impatient, my time frame is forever, my financial goals are to be able to print my own money and make the Forbes 400, I am naturally emotional, but can afford to lose everything.

Many of you have already determined your trading style, but many others have looked at the fact that there are so many strategies and don't know where to begin. If you are going to be a high probability trader (non-directional), consider covered calls, spreads, naked puts and owning stock. This method is more conservative, fairly consistent, and offers lower returns. If you are the high performance trader (directional), consider buying calls and puts, stock, and maybe occasionally legging onto spreads. This method is more aggressive, less consistent, but offers much better returns when you are right.

Sometimes we get too carried away with so many details, we forget the answers to the easy questions

Recommendation: Get started on this process immediately, if you haven't already

Long: Defined trading styles

Short: Jacks of all "trades"

Disclaimer: I don't really delete e-mails, but don't test me.

PS- On a serious note, for those of you in the So Cal area, you are in my thoughts. I hope everyone is safe and doing well. Take care.

Posted by Option Addict at 10:35 AM | Permalink | Comments

UPDATE: The orignal video this morning was damaged, cut short and without sound. The link below is a whole new video. Enjoy.


Click To Play
Recommendation: Yes, I know. It is a work of art.

Long: Creativity

Short: Hurdles

Disclaimer: I have none today. I am an open book as it is.

Note: Hurdles have been cleared, what a pain in the ass.

Posted by Option Addict at 11:12 AM | Permalink | Comments

My recording software is getting a soft re-boot. Yep, somebody tampered with my recording studio. Don't worry, I have asked my secret agents to check the surveillance tapes last night to see who did it. There will be hell to pay.

Until I find a solution, it is with deepest regret that I put today's video on back order. I can't imagine that it will take too long, but I wanted to give everyone a heads up.

In the meantime, AAPL has lifted the market just as I suspected. There is a monster bid for technology stocks, and we are getting some great moves from the supporting casts such as small cap, financials, etc. You have to buy into this dip. If you are nervous, nibble into it.

Lastly, if you tried to participate in last nights event, I apologize for the lack of technical support, audio stream, and everything else that went wrong. The event was way overbooked (2,700 people) and Webex apparently can't handle that type of volume. The fact that the technology around here makes me look bad is really starting to get under my skin. Anyway, the presentation was recorded, and will be posted on the Investools site later today. Again, my apologies.

Watchlist developing...

Posted by Option Addict at 7:41 AM | Permalink | Comments

I had a request to speak about diversification. Normally, on a Monday special requests are denied. However, it is not like this is a complicated topic...or at least this is not a topic that should be complicated.

How you approach diversity in your portfolio is your own business. But if you are building a portfolio of owning different investments such as ETF's, Equities, Gold, Bonds, etc...try to assign a delta to your portfolio. Confused? If you own 1 share of stock, you have a delta of 1. If you own one share of ten stocks, you have a delta of 10. If you own one share of ten stocks, and one call option on another stock...you get the point. If you are confused as to why many of you lost your ass-ets on Friday, plain and simple- you owned too much.

Diversify.

The last big drop in the market I went out and gave specifics as to how I survive in the market. I opened your eyes to my portfolio specifics. And while I am not about to do it again, I want you to understand the idea behind it. Last week (Monday) I mentioned how I was bearish for the upcoming week, and traded accordingly. I took bearish positions (negative delta) on trades that were highly correlated to the market, and other bearish positions that were going down regardless of the market. At the same time, I still took bullish positions (positive delta) on stocks that were moving higher. I try and stay neutral (offset delta) to the market. This is the only way you will survive as a directional trader. If you own too much, and by design your trades are intended to be profitable moving in only one direction, a day like Friday will eat you and all of your money.

Many of you spend too much time worrying about things like other peoples trading signals, what price pattern it is you are looking at, which strike price to select, how to read implied volatility, etc when you haven't constructed the basic tenets of portfolio management or asset allocation.

Shame on you.

To your defense, I can't make any assumptions when I have no idea what your time frame is, what your financial standing is, your risk tolerance, your investing objectives, or anything else looks like about you. What I do know is this... I don't care who you are or what you are trying to accomplish, you will not last long in the pursuit of becoming a decent trader without creating a firm foundation of these basic principles, which are...

Risk management- Plan your loss before planning your profit.

Diversification- Be bullish, be bearish, be involved in various groups/markets.

Proper Position Sizing- Trade small, trade safe.

Effective Trading Plan- Make sure your plan works, and/or makes money.

Cutting Losses Short- Enter a trade that offers a small loss.

Letting Winners Run- Don't kill your winners.

Curbing Your Emotion- This is a bi product of trading small.

Since I have spent the last ten years of my life developing and optimizing all of the above, I am able to do this (see below) on a day like today... or any other day for that matter.

Recommendation: Give your account the same foundation so you can participate in the activity above.

Long: My rules

Short: My emotion

Disclaimer: If you got emotional and closed good positions this morning, or shorted "mother market"... again, shame on you.

Update: If you took any part of this post personal, don't. You know I am not in the business of attacking, just trying to get a message across. If I were mad, I wouldn't have addressed it at all.. When all else fails, "Fresh Tactics."

Posted by Option Addict at 10:55 AM | Permalink | Comments

PLEASE!!! My inbox just went nuts with e-mails comparing today's 2.5% drop in the Dow, to 1987's 22% drop in the Dow. Are you kidding me?!

Gang, the Dow would need to drop 2,600 points to be in the same ball park.

Comparison Denied.


Recommendation: If you want to see what it was like to trade through a "Crash" I can start to liquidate my account on Monday.

Long: My account. I want to keep it.

Short: Weak Comparisons

Disclaimer: Thank you to diversification, I left my trading station for the majority of the day.

Posted by Option Addict at 1:49 PM | Permalink | Comments

Posted by Option Addict at 11:14 AM | Permalink | Comments

So the question now becomes, "what do I want to talk about today?" Other than being donkey punched by China, nothing. Today was the reason I wanted to scale back my position sizes in China last week. I guess I can redact yesterday's statement and today state that I am glad I did.
In the effort of keeping my emotions sidelined, I am trying to focus on happy thoughts, such as TBSI, OYOG, ISRG, RIMM, JEC, ALXN, PCLN, CNQ, BEAV, CTRP, TIF, HANS (of course) and finally, good ol' MON.

BTW- ANDE finally broke out for anyone that gives a $hit.

I won't forget to highlight a few shorts I am proud of...mainly JCP, GLYT, GCI, JCG, MTG, ZION and NCS.

Posted by Option Addict at 1:27 PM | Permalink | Comments

Recommendation: Rumor has it that I have been mocked in pursuit of the best blogger crown. We all know the fate of those that mock my presence.

Long: Reputations

Short: Choosing words wisely

Disclaimer: The competition will eventually submit to the power and will of the Option Addict.

Posted by Option Addict at 4:39 PM | Permalink | Comments

Sorry I am late, blogger has been giving me hell today.

That was a mean U-turn that the market made today. Remember that 20 day SPX chart I shared on Monday? It marked a weekly top, no doubt.
Despite the exfoliation of profits in my calls today, China has kept me in the black. I have to give a nod to PTR, SNP, FXI, LFC, YZC, FSLR, BCSI, CHU, CMG, CNQR, CTRP, MTW, NVDA and CNQ. I also have to give a shout out to all my shorts for today's turn around, especially AOS, ZION, NCS, CPA, AVTR, GLYT, JCP and a few others.

By the way, I like how MCRS is setting up. I might add instead of subtract in front of earnings.

As I pondered today's topic, I looked no further than the topic of patterns. One of the most predominant patterns I am seeing across the market is the cup and handle. If you have read this blog for a decent period of time you will know that I am not a big fan of this pattern. However, rather than speak in biases, I will teach facts and you can decide on your own.

The pattern falls into the trend continuation category, which means upon breakout, prices will advance in the direction of the prior uptrend. The time frame is ideally for the pattern to form and complete within 6 months on a daily chart. The cup will be a "U" shape (not a "V") that occurs near or at the top of an uptrend. The handle should occur just off the second top of the "U" shape, and normally completes within a month. As with any breakout, volume is expected on the breakout.

Target price is measure by the depth of the cup, from top to bottom. Expected time frame is measured by how long the pattern has taken to form.

Here are a couple examples to watch...

AXE

REMINDER- FREE ADVANCED OPTIONS OPEN HOUSE!!!

Want to learn more about the world of advanced options? The Option Addict will be hosting a free open house to all that want to learn more about advanced options. The presentation will be two weeks from today (October 22nd), and I would love to see everyone that is interested in attendance. Click Here to enroll for this presentation. Once you are there, click on "Enroll" to register. You do not have to be an Investools student to attend. Once you have enrolled, you will receive confirmation and instruction of how to join the event. Make sure you sign up now, before it fills up!

SECOND REMINDER- PLEASE, CAST YOUR VOTE!!!

I am still in the running for top business blog, top video blog, education blog, and podcast blog. I sure could use a vote since the voting ends this Friday.

All you need to do is click here, to sign up.

Once you do, Click here to cast your vote.

Recommendation: A win for me, will mean a win for all of you. Trust me.

Long: Today, it's fajitas.

Short: Operating machinery, such as a trading blog.

Disclaimer: If you don't vote, I will track you down with a dose of the following...

Posted by Option Addict at 11:01 AM | Permalink | Comments

As mentioned, I wasn't able to fit all my ideas into a 10 minute video. I like to have a list of stocks that are trading at support or resistance levels. I watch these stocks for breakouts, which will normally occur within 1 or 2 weeks (some are already underway). A few of these I have been in for a while, or have recently moved into. Here are the tickers...

Support (Bearish)
HUBG, ROH, JCOM, FAF, LFG, MTG, AVY, VFC, AVTR, BWS, JCG, ATI

Resistance (Bullish)
HRS, ATU, CNX, BUCY, AXE, COL, COP, HES, ANW, AXS, TIF, FMCN, JRJC

Recommendation: This was easier than producing a video.

Long: Celebrity appearances in my comments.

Short: Celebrity appearances on my doorstep.

Disclaimer: This might be all for me today... Forecast is partly over-booked due to celebrity status.

Posted by Option Addict at 10:07 AM | Permalink | Comments

Click To Play

Posted by Option Addict at 8:51 AM | Permalink | Comments

Unfortunately, employment kept me from being more proactive about blogging today. Missing 100 Dow points is like forgetting a friends birthday. It's not something you want to make a habit of.

This will be a pretty shaky week. Not for technical reasons, but for fundamental reasons. Most major companies report earnings this week. Make sure you know when and where your companies report, unless you are into that whole "Oh $#!+, surprise thing."

Speaking of fundamental reasons, I don't like the price action here in the market. Here is an intra-day chart. Fundamentals are the only thing that can keep our heads above water (below: SPX 20Day).

If you are not long GLD, or OIH, don't bother talking to me. I don't like being ignored, and if you are not reaping profits on the most bullish commodities on the planet, then yes, you have been ignoring me.

Speaking of profits, how could I not like the moves in TBSI, DRYS, SNP, VDSI, SII, DVA, SNDA, SLB and CNX?

My shorts performed wonderfully, most notably ZION, ATI, THQI, NCS, CPA, CAH, AVTR, GLYT, JCP and a few others.

I took down XOM. I felt pretty good about that. I won't discuss any more entries until tomorrows video though, so don't ask.

Next topic... BIIB. I can't imagine this being the case, but if you didn't sell yet, take a look my last takeover offerings I gave out early...UIC and BOBJ. As you can see, there is no upside left. Even when the price falls short of the takeover price, don't ever hold. Sell. I have tried this on a few occasions, most recently AH. If you can remember this takeover candidate I gave you earlier this summer, it was priced $4 short of the offering price, and I held for a few days only to realize what an idiot I was.

Don't get greedy.

Since China has been breaking my balls, I softened the blow by reducing my exposure. I see some softening in the "buy it all now before it bursts" department... therefore I am adapting to the potential risk. This wasn't a major sell off by myself obviously, the Chineese market would have crashed.

In closing, my bets tonight are on the New York Giants and the Boston Red Sox. I better hurry home before dinner gets cold.

Recommendation: Nil

Long: October Sports

Short: Cold Dinners

Disclaimer: The Giants and BoSox read my blog before tonight's sporting events.

Posted by Option Addict at 5:08 PM | Permalink | Comments

Recommendation: A fine fitting tune for a day like today.

Long: Big Ass Winners

Short: Posts with too many comments

Disclaimer: Metallica owned 10,000 shares of BIIB, thanks to the Option Addict

Posted by Option Addict at 9:59 AM | Permalink | Comments

I effectively caused another buy-out. Check out BIIB, or at least the after-hours quote.

You are welcome.

I just got off the phone with the CEO of Biogen and we both agreed that putting the company up for sale was a better alternative than a hostile take-over from the Option Addict. I am so proud of myself I am tempted to swear. How is that for a pre-cursor to a phenomenal weekend?

Speaking of a phenomenal weekend, I need your help. Apparently the competition is heating up around this "Best Blogger Award." I am not about to go down, and I am hoping you have my back on this.

All you need to do is click here, to sign up.

Once you do, Click here to cast your vote.

That's it!!!! Please!!! I am not going to get beaten in this competition. There is a lot more riding on this than I thought.

Recommendation: If you don't cast a vote, the market will take your money next week. I promise.

Long: Option Addict

Short: Competition

Disclaimer: I vote for myself regularly.

Posted by Option Addict at 4:26 PM | Permalink | Comments

Rather than rant about what is working well and what is not today, I'd rather talk about yesterday. I am seeing a lot of questions coming through about "how I reacted" and asking "what I did" in response to yesterdays change in momentum.

I didn't panic.

In fact, if it weren't for a phone call yesterday, I might not have noticed.

The first thing I did was start selling off some of my positions. Primarily BIDU due to the downgrade. Once I noticed it was moving against me (thanks random caller) I reduced the position by about 60% to lock in some profits. That is what really pissed me off about yesterday, but keep in mind, my cost basis was $130 (Check my archives if you doubt me).

I added to MON. Did you expect anything else? I plan to make a market in the Nov's.

All of them.

I dollar cost averaged in only the best deals available, such as HANS, AMZN, ISRG, DRYS, FWLT, VDSI, PCLN and a few others. Being the great companies that they are, they decided to pay me back today.

I dismissed a few losers, and entered a few new positions...

However, I think many of you sometimes forget that I like to play things somewhat safe with my accounts. I stay diversified at all times, and always have a hedge against the market and or my account positions. Here are some examples...

Despite losing some big UNREALIZED gains, I made for a lot of them with nice blow-ups in ATI, LDK, SPN, ZION, RAIL, MAS, THQI, NCS, PAYX, CPA, WNR, CAH and PNR.

I also own Gold (GLD), which is intended to be a hedge.

And I always hedge with other instruments, specifically S&P Futures (Short), Crude Futures (long), and added to some Index puts on the Nasdaq (small position).

Yesterday was fine. Like I have always said, I try to put myself in a position where I don't care about the market. When I start my day every morning, I don't run to see what the market is doing, I run to see what my account is doing. I try to put the market in position where it is irrelevant to my account.

When I received this phone call that alerted me as to the change in the market, and asked how I was doing...I glanced at my bottom line and said, "Fine." Upon further inspection, I was able to make some necessary adjustments to moderate unrealized gains and turn them into realized gains, cut some losers and buy everything that was appropriate. Eventually it gets to the point where you become a well oiled machine.

Another day, another dollar.

The market was due for a little exhale, and I bought bullishly with confidence. If it were going to be a big deal, you would have seen a much bigger drop than we saw. Yesterday was an obstacle, and the Option Addict played though.

Recommendation: Cannonball often.

Long: Diversification

Short: Panic

Disclaimer: I cannonballed myself yesterday to relieve panic because I wasn't diversified.

Posted by Option Addict at 10:22 AM | Permalink | Comments

Recommendation: Listen to the words... They go down smooth.

Long: The Good Times

Short: The Bad Times

Disclaimer: James Ingram loves the Option Addict

Posted by Option Addict at 7:46 PM | Permalink | Comments

Looks like my MON Nov Call buyback plan was executed to perfection. This has become a MON-ster position, one of my largest single holdings with the exception of a few such as HANS, DRYS, BIDU, POT, PCU, FCX, GLDN, VIP, GLD a few casinos and a couple others that are not too far behind.

Speaking of MON-ster position, I have to give a shout out to Toni, for the best part of my HANS position as you can see below...

I also have to give a shout to Tonya, who also was so kind to help increase my position in Java Monster. However, the position has already been consumed. But a special "Thanks" to both of you for your generous contributions. I owe you one.

Today was the day I have been waiting for out of China. My positions in FXI, SNP, YZC, BIDU, LVS, WYNN, and a few others are responding nicely. This is where that whole patience thingy I teach really starts to pay off.

Other satisfying gains today include VIP, LDSH, CNX (last nights Mastertalk officially caused today's breakout), SII, EMC, CRK, COLM, TEF, JASO, FTI, GSF, MT, BEN, WNR, CPA, and NM.

If you haven't yet, join forces with me and take down ATW, KSS, PCZ, CAH and CNX today.

You can thank me later.

Speaking of thanks, for those of you who offered your nominations for the bloggers choice awards, thank you. If you would like to cast a vote, I have been nominated for 4 different catagories.

Best Business Blog, Best Video Blog, Best Education Blog, and Best Podcast Blog. If you would like to cast a vote, look for the icon below on my right hand column on of my site...

Or you can click here to access my page directly. Vote as often as you'd like, and in any or all catagories if you would like. Thanks in advance for your support.

Newsflash...

The Fed gets Hawkish! Did you notice a massive spill off just now? From what I am hearing, this is the cause...

"Looking at the economy, Federal Reserve Governor Randall Kroszner said in prepared remarks for a speech Thursday that the central bank's decision to cut short-term interest rates last month by a larger-than-expected half percentage point was expected to be "appropriate to offset the effects of tighter financial conditions on the economic outlook."

Along with a BIDU downgrade a few minutes ago, I just got in a real bad mood.

Recommendation: Don't blink!

Long: Realized gains.

Short: People that dick with my unrealized gains.

Disclaimer: You see what happens when it takes me three hours to compile a blog post?

Posted by Option Addict at 12:12 PM | Permalink | Comments

Well, now that "amateur hour" has come and gone, and I have gotten my early morning trades taken care of, I guess I ought to talk about what is getting me riled up this morning.

By the way, ever wonder why they call the first hour of trading "amateur hour?" Yet, 99% of amateurs I have interviewed claim that the reason they don't trade in the morning is because of this nickname, and they don't want to be labeled as such. Disclaimer: The Option Addict takes more trades in the first half hour of a trading day than small Mutual Funds take in a Quarter.

Opportunity is opportunity.

Anyway, I still don't know what to do with MON. If you have any ideas, throw them at me. They posted a $210 million dollar loss this last quarter, and the stock still doesn't want to go down. Unbelievable. I started a MON Nov Call buyback plan. It has taken me most of the morning, and is going to totally ____ my cost basis. Oh well, better to gamble with winners than losers.

The biggest rush I have going today, aside from some assbag e-mailing me and telling me if he were my boss that he would fire me, is the price action that continues in my big gainers today. PCU, LVS, WYNN, GNK, FCX, ISRG, DRYS, BCSI, SOHU, ESRX, FWLT, JEC, PCLN, DVA, CNX and HANS.

Fire me?!

In the meantime, someone tell me not to keep sitting here and rooting for China stocks. This has been the single biggest source of free money I have found in the market over the last several months, and I would hate to see it start to slow down.

I've got another Mastertalk presentation tonight. A great suggestion from the blog about potential topics last week turned into a pretty good presentation. If you have any other ideas, lets hear them.

Recommendation: I might get motivated to vlog later today, but don't encourage me.

Long: Vlogging

Short: Blogging

Disclaimer: I don't need free money from China.

Posted by Option Addict at 9:54 AM | Permalink | Comments

Click To Play

Recommendation: Watch with caution.

Long: Three fingers of Monster Java this morning.

Short: Plenty this week, believe it or not.

Disclaimer: My videos have been watched by Mafia personnel, hence the new nickname.

Posted by Option Addict at 9:55 AM | Permalink | Comments

Before I release today's video, I need to ask a favor from all of you. I need to get some good feedback on the following topic....

Would you see value in the ability to get access to your favorite instructor for one-on-one coaching, mentor ship or personal instruction? The all-stars like me, Josh Black, Mike Turvey, Dave Johnson, Sven Guru and Bootch Utley. The service would be served a la carte, meaning you could sign up for one meeting or several meetings until your goals or objectives were reached. This could include the developing of trading rules, building a specific system, mastering a particular strategy, etc. Do you see value in this service?

Could you please send me an e-mail with your thoughts? If your thoughts are good, bad or neutral, could you send me something? The e-mail doesn't need to be extremely long or detailed, I would just like to hear your thoughts.

Please send your responses to : marketcast@investools.com

Thanks!

Posted by Option Addict at 8:21 AM | Permalink | Comments

Want to learn more about the world of advanced options? The Option Addict will be hosting a free open house to all that want to learn more about advanced options.

The presentation will be two weeks from today (October 22nd), and I would love to see everyone that is interested in attedance.

Click Here to enroll for this presentation.

Once you are there, click on "Enroll" to register. You do not have to be an Investools student to attend. Once you have enrolled, you will receive confirmation and instruction of how to join the event. Make sure you sign up now, before it fills up!

Recommendation: C'mon, even I registered.

Long: Free stuff

Short: Not free stuff.

Disclaimer: Professional Option Traders Have Already Enrolled For This Event.

Posted by Option Addict at 5:03 PM | Permalink | Comments

Occasionally I will dip into the ol' reader mailbag and share some fan mail, success stories, or insights that the community has to offer. I came across an interesting e-mail today that I wanted to share. Honestly, I didn't know how else to kick off the week...

Jeff,

My name is _____ and I am new to your blog. I have only been reading for a couple months and while I don't really enjoy your off topic rants, inappropriate videos, or taste in music, I am impressed by your skill and abilities to make money in the market. Your videos and watchlists have been incredible learning tools. I think this could be one of the best trading websites out there if you acted more appropriate and stuck to the things you are god at. If I wanted to read about anything other than trading, I would venture elsewhere. Thanks for taking the time to teach new traders about the market and about options.

To pay you back for your efforts, take a look at KUN.

Respectfully,

_________


Thanks for nothing.

I mean, stock pick.


I am taking a breather from my watchlist construction this morning. My equity research department, which is operating at half capacity ever since unexpected lay-offs last week, has come up with some amazing ideas. In fact, my watchlists were actually reorganized last week. Being the superstitious person that I am, I am very cautious to fix things that are not broken. If I lose any money this week, guess who is losing their job?

The biggest surprise today (not really a surprise, actually a reward from hard work and research) was the $6.8 billion dollar buyout offer that SAP put on the table for BOBJ. Not only that, but also TXT agrees to buy UIC for $1.1 billion. I hope you all were a part of these moves I put you in front of. Thanks to Alpha, my kids won't be eating left overs tonight.

If you missed out on BOBJ (and/or UIC), keep an eye on his brother, BOBE. BOBE is younger and less attractive, but he'll be getting cheaper sooner than later if you know what I mean.

I am really excited to outperform myself this week. The new re-organizations of my watchlists will allow for me to quickly find the best of the best in the market, ignore the trash and make money. Stay tuned.

Recommendation: 2 Acquisitions in 1 week. Unreal.

Long: Money

Short: Margin interest

Disclaimer: Hank Williams Jr has admitted to reading my blog.

Posted by Option Addict at 11:42 AM | Permalink | Comments

I wish to quote a good friend that goes by the name of An Artist Formerly Known As Arty, "You Can't Keep a Good HANS Down." You are right my friend...grab your potato gun, it's time to go to war against the shorts in HANS.

It is shaping up to be a great close to a great week. I love the move in RIMM today. I have already responded to 2 dozen e-mails explaining why the calls people were buying yesterday on RIMM lost money in the face of a double digit gain. Despite my pleading of people not to buy options the day before earnings, it still happens. Occasionally it will produce gains, but over several trades it tends to underperform.

The reason this hasn't worked out is you have probably traded through a 15-20% decrease in volatility. This is what I am seeing on average across several strikes/months of expiration.

To make matters worse, most have purchased short dated OTM options, which sticks a fork in that whole probability thing. However, if you think RIMM will likely continue higher (it's up 150% YTD with no reason to go down) you might hold these for a while and wait for some gains.

Aside from RIMM, I can't complain about the dip in China stocks. If you have been pouting over missed opportunity and didn't buy the dip, shame on you. Me, being the great person that I am, I bought most of them for you. FXI, ZNH, SNP, LFC, BIDU to name a few.

I also have to tip my hat to the hardworking people at CME, ISRG, FWLT, DRYS, FSLR, BOBJ, MON, PCLN, ROP and a few others for helping me create profits from their great companies.

On the flip side, I took profits in ICLR, CHNR, and JRJC today. I have a few others on deck heading into the close. I have to keep it real, even when I cut loose some winners.

A couple Friday treats you are likely already aware of...

BIIB

I have set myself into cruise control for the remainder of the day. As always, a big shout out to all my readers across the globe. Thanks to each of you for your support, whether you contribute or not. And whether you like me or not, you can't resist my ability to make you money, and my ability to occasionally make you smile while doing it.

Have a great weekend.

Recommendation: Seriously, have a great weekend. Consider it therapy for what will come next week.

Long: Making money

Short: Smiles

Disclaimer: Professional Money Managers have admitted to reading my blog.

Posted by Option Addict at 10:32 AM | Permalink | Comments

Recommendation: Looks like the "Buy Everything" strategy paid off.

Long: Everything

Short: Hardly anything

Disclaimer: I love trading

Posted by Option Addict at 10:01 AM | Permalink | Comments

AA
ALCOA INC
AIG
AMER INTL GROUP INC
AXP
AMER EXPRESS INC
BA
BOEING CO
C
CITIGROUP INC
CAT
CATERPILLAR INC
DD
DU PONT E I DE NEM
DIS
WALT DISNEY-DISNEY
GE
GEN ELECTRIC CO
GM
GEN MOTORS
HD
HOME DEPOT INC
HON
HONEYWELL INTL INC
HPQ
HEWLETT PACKARD CO
IBM
INTL BUSINESS MACH
INTC
INTEL CP
JNJ
JOHNSON AND JOHNS DC
JPM
JP MORGAN CHASE CO
KO
COCA COLA CO THE
MCD
MCDONALDS CP
MMM
3M COMPANY
MO
ALTRIA GROUP INC
MRK
MERCK CO INC
MSFT
MICROSOFT CP
PFE
PFIZER INC
PG
PROCTER GAMBLE CO
T
AT&T
UTX
UNITED TECH
VZ
VERIZON COMMUNICATIONS
WMT
WAL MART STORES
XOM
EXXON MOBIL CP

Recommendation: Buy options on stocks that are going to move.

Long: Stocks that move

Short: "The Living Dead"

Disclaimer: This is only a personal preference. Always choose your poison wisely.

Posted by Option Addict at 11:21 AM | Permalink | Comments

First off, I stumbled across a bunch of great triangle breakouts that hadn't been brought to my attention. Mainly RBA and KHD. As a result I have fired my equity research department. Beware of the unemployment report due out Friday as I have delivered a big surprise to the labor market.

Today was very interesting. I whole heartedly enjoyed moves in CME, TIN, CHNR, ISRG, AVTR, GRMN, DAKT, CBE, WFMI, and HANS. But at the same time I was crippled by my exposure to China and lost unrealized gains in LVS, WYNN, BIDU, FSLR, EXM, DRYS, FLIR, MCRS, APD, NVDA, IBM and POT.

"Harumph..."

Here is my final thought to bring a close to the day...

Posted by Option Addict at 5:30 PM | Permalink | Comments

Recommendation: Don't go anywhere just yet, I plan on writing later today. After all, I am a long ways out from my presentation tonight.

Long: GNR

Short: China

Disclaimer: It has been a long day

Posted by Option Addict at 2:31 PM | Permalink | Comments

In case you missed it, China recalled a $hitload of profits today. However, I have already decapitated many of their warriors. FXI, ZNH, BIDU, LVS, WYNN, JRJC, LFC, YZC and a couple other plays like SNDA, LASO, CTRP, SOHU, SINA, and EDU to name a few. As you can see, a trader always keeps score.

I might have lost the fight today, but I have dominated the battle thus far.

BTW- HANS is about to print $60 today.

Recommendation: Let things cool down before proceeding.

Long: China, doubling down and Java Monster.

Short: Over reacting

Disclaimer: I hope China hasn't decapitated any of your profits yet.

Posted by Option Addict at 9:34 AM | Permalink | Comments

Click To Play

Recommendation: I made a few minor adjustments. For entertainment value, of course.

Long: New and improved watchlistst

Short: Old and abused videos

Disclaimer: Watchlists are for watching purposes only, and if misused, you will probably lose money.

Posted by Option Addict at 9:38 AM | Permalink | Comments

Posted by Option Addict at 8:29 AM | Permalink | Comments

Recommendation: Get a piece of the pie.

Long: Tomorrow's Watchlist

Short: Anticipation

Disclaimer: None

Posted by Option Addict at 2:12 PM | Permalink | Comments

Yes, I am still bearish on AZO. Until it proves me wrong, I have no reason to be anything else. The market has been cruising higher, and AZO is flat. That accounts for something, right?

I've highlighted it's recent trading range to illustrate it's reluctance to move higher. If the market catches some profit taking, AZO will respond. If not, I'll cut it loose.

Stay tuned.

Recommendation: It's just that simple.

Long: K.I.S.S.

Short: AZO, of course

Disclaimer: I write this in response to some of the comments about this trade.

Posted by Option Addict at 10:48 AM | Permalink | Comments

LIFC- Added to my calls FSLR- A clean cut entry point

Short: Work

Disclaimer: "Do as I say, not as I do."

Posted by Option Addict at 9:46 AM | Permalink | Comments