Dear Jeff

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...


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.



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.

Thanks for everything you do for us. Much appreciated!

U R Welcome :)

hard to complain when making money though yea.... Just a generation gap that's all

OO!! I am one of the lucky first posters. Thanks for the buyouts, Jeffy boy. Screw that guy who wrote the letter. I dont trust anyone until I know them as a person. Thanks for not making this like evey other sterile web site. Thanks to you my cat will be eating.....tuna. Boy is she sick of that. Looking forward to your next surprises. Buy the china dip. SFM

STV doing a BIDU leap!!!!!!!!!!!!

All aboard!

Going to $100 is my opinion.

ISRG What can you say - breaking out on good volume Target $263

Been holding for 3 days

David in NH

Hey Jeff, Howzit bruddah?

I am new to your blog as well, but I luv the videos, music, watchlists, and the fine community you have here.

Everyting heah stay "NO KA OI"(Da Best).



How are you finding out about all these people reading your blog? That's way cool. I admit to reading it too (and I LOVE it) :)

Raimo or whomever wants to answer- I'm starting to get a little confused on REE again. I've been looking at the stocks that everyone is saying are at REE and I don't see it that way. I'm thinking maybe I'm drawing my diag. support lines wrong. How far back do you start drawing them? Thanks for your help.

Frankly this has been a frustrating day. Anemic volume on the market but my account is taking a nice hit thanks to FCX. I had a 74% profit prior to today and most of it is now gone. This is where I struggle with trading my plan. The trade is not broken but I'm not enjoying seeing that amount of profit slip away. This is just one of those stocks that can swing just as big to the downside as it does on the upside so it needs this much room to breathe. But I stick to my plan.

Jeff- too much cryptic talk in your last couple of posts. Is there something we should know about?


Just keep doing your thing. Lots of us love it.

BTW, was in Kohler Wis over the weekend. Every been? Great golf!

NILE - I looked at this early today as a possible breakout and figured I'd wait til the end of day. So here it is close enough to the end of day and now it is up 5.55. I can't seem to it right today.

Jeff, isn't it chasing this stock to take a trade here or is it an appropriate flag breakout signal?

I love all the videos and music. Keep your creativity flowing! It's a nice break from charts and numbers.


Hey BEANER are you still in that
that you were pumping the other day
nice trade, please give us some more so we can't place puts on them.


Letters like that make it all worth it, huh? I know there are many, many more positive ones every day because how could there not be with all that you do for us.

Is that you buying 400 calls of MTN nov $70?


If I were you, I would call it LEE, and create your own rules :)


I have never been to Kohler, but plan on moving there one day and becoming Mayor.

Everyone else,

Before I get a stockpile of e-mails, I only shared this one so you could all see the awesome stock pick that was intended to thank me for my blog. I thought it was funny.

I sent the guys letter to my woodshedder. :)


First, don't listen to that boring likely conservative person about your blog. I like all the elements of the blog and of course thanks for all the work helping us learn.

Second, how did you find BOBJ? I am assuming it was a break out play when it went above about 47. I don't recall exactly when you mentioned it, would you be the first to admit pure luck on the buyout? Or on top of the breakout did you know about buyout speculation?

Do you ever buy on buy out speculation if the chart is decent? It was mentioned microsoft is rumored to buy GRMN, who knows if there is any truth to that, however if the stock doesn't have much downside I am more inclined to consider it again.

Obviously it is not smart to try and play those as very few will actually come true, but do your searches only look for certain patterns or do they include possible valuations attractive to takeover?

thanks again for everything.

Also, VA Beach Girl, I hear you on FCX, it is the only red in my portfolio, however I can't complain about 1 stock out of 5 being a loser. again watching during the day may be frusterating, again I was glad to go from -1000 to +700 at the moment from friday, but seeing those profits go away may be tough for some, I just try and check less.


more specifically buy ZNH. while its at support. SFM

You're right...again...just make my own rules. Thanks for making my fog go away.
FYI- can you believe I've almost recovered all of my losses. I owe it all to you, your blog, and my new friends here. I can't thank you enough.


Here is how I found BOBJ...

Disclaimer: Stocks in my watchlist are likely takeover candidates.

Oh, NILE! My new best friend! Got in on 10/1 and wanted to dump it but I stuck to my rules for end of day closing price and then BAM!

You have to draw your own lines. Raimo is an awesome trader and I think that he would say the same thing to you. It needs to become your trade.

Raimo gave some diagonal support lines for NILE on the last post and mine are very different. Did they work for me? Yepper.

I hope I don't sound snippy, that's not my intention. Trying to trade someone else's rules is like wearing someone else's underwear. It's uncomfortable and it doesn't fit.

Make your own REE and follow it. :-)


It's harder to make someone elses rules work for you than it is to make your own.

Congrats on making it back into the black!

Thats what she said.

Lis, my bad. I see you already said it. :-)

haha, Jeff I laughed right out loud when i read your latest disclaimer.

U Funny!


Whoever sent that letter to you I hope reads this post.

First off, this is Jeff's blog, so he can post whatever he wants. If you have learned anything from this blog, Jeff's posts, and made some money from this place, you did so for a small fee..whoops... I am did so for mistake.

So if you choose to visit this place and learn, or not, you really have no complaints. To even think of badmouthing Jeff or his blog is, well, just plain ole disrespectful..This IS JEFF'S PLAYGROUND, he created it, and most of us like it here. IF YOU don't like it here, then I have two suggestions:

1) create your own blog, and
2)kiss my ass in macy's window

Okay, whoever made Beanie's post shrink you are my new best friend.


Your hiney is in Macy's window? Now I am impressed! :-)


lol,,,well said


yes, please come to Wisconsin!,
we love you here :)


Funny! (I thought that was YOU in Macy's window. You been workin out?)

VA Beach Girl,


VA Beach Girl
Just hate all the spam that beaner gives out, when people on this blog are really trying to help each other learn and make better trades.

sorry beaner's LDK has now been inverted. turtle cover



Jeff and Laney already nailed it with REE..

Make it your own. Half the posts I read here suggesting a stock is at REE do not even come close to my own personal REE...BUT, the whole purpose of REE, why I coined the phrase, was to hammer the point that yo uneed to clearly define YOUR EXIT, and try to make that YOUR ENTRY. That is what I do. the biggest difference in my REE and others is in how a trendline is drawn. Me, I look for a well defined trendline over a period of time with multiple points. An old high for example is not support for me, but I have seen others here call that REE. For me, it is not.

Thanks for clarifying that. I thought there were definite rules to the REE, but I have made it my own now...LEE- like Jeff suggested. Thank you all for your patients.

The site is perfect - videos, humor, music et al. Most of all, the trading education is unsurpassed. Don't change a thing (not that you would).

DAKT looks like it is forming another flag pattern to create an entry point.

APA from Jeff's watchlist is still a good entry.

Long: Prison Break (what's in the box?)

Short: Letters to Jeff complaining about the blog

We can't speak about Prison Break until I catch up. I have one episode left to go in Season 2, and all Season 3 on TiVo.

Is it good thus far?

It's VERY good.

You'll be laughing at how pitiful Bellick is... gosh what an idiot!

Let us know when you get caught up!

i second jeff's motion on prison break, I also have all those episodes to watch.

AAPL keeping my account afloat today.

Beanie reminds me of one of my crazy drunk uncles that just walks by blurts something out and goes on his way. as insane as it seems, I think its kind of funny

puts mentioned by others that I like

Greg H

Hi all-

Just logged in and NILE,....holy #^@@. I can tell you the reason it took off, because I closed my position last week! Enjoy the ride! Looks like I'm on the sidelines....again. [sigh] :(


Thanks for the OA blog and all the great information you work so hard to provide, here.

ODP - resistence seems to be pushing this back down, which is what we want. But the volume is pretty light. Does that matter?


AAPL is lifting my account, paper trading account! Doggone it! The remark on Beanie was too funny! I think we all have at least one drunk uncle, don't we! :)


Dontcha hate it when that happens? I was close to closing out the NILE trade, too, because it just kept flirting with my line in the sand. Hopefully your loss was teensy weensy. :(

I have to share this funny and true story that happened today. Over the weekend I heard about a promotion that M&Ms has whereby you can custom order gift boxes of the candy to say whatever you want. Well, *almost* whatever you want. I thought this would be a great gift to send to Jeff as a thank you for the blog, his teaching, etc.

So I went to their site, picked my colors (silver and white in keeping with the blog's look), picked out the gift package and then typed in my M&M message, OPTION ADDICT. Got back a message that my request was not allowed.

I was certain I could fix that over the phone today if I called their customer service number. No luck. I pleaded, cajoled and assured the operator as well as her supervisor that this was a completely legal and drug free zone to no avail.

So Jeff - you will not be getting custom M&Ms after all.

Doji Girl,

That's so crazy! Didn't they at least think to check out the site and see what we're all about?

Jeff, don't be down. We'll find some other candy for you. The folks at Skittles probably have more sense than those M&M clowns...

Doji Girl
That's too funny. How about only having OA on it!

Well phoey on M&M's, hello Skittles, my new favorit candy.

Wasn't it M&M's that failed to recognize the amazing marketing opportunity of having ET eat their candy? Seem's like they just don't quite get it.

Nice follow through on STAR today.

Krystal, I tried to get them to visit the site. No go.

Lis, that is actually a good idea and one that I didn't think of. I was trying to come up with a 2-word thing because that is what the form asks for.

Doji Girl,

Thanks anyways. I appreciate the gesture, and just thinking about me in general. So very sweet of you.


Jeff, I often think about you. Especially when I'm going through my watchlists and come across a potential trade. I think, "WWJD with this one?"

Doji Girl-
You could just get the M&M's to say "OA" on them instead of "Option Addict".


Doji Girl

Your M&M idea is great! We could all send you a $1.00. When you have enough money, order the OA M&M's. However, do you think it might be taken as a drug supply for the candy man? LOL!

WWJD!! You come up with some of the most clever ideas. Keep it up, it makes for very enjoyable reading!


Feeling a bit feisty with that song were we?




Hell yes.

To add to Raimo's discussion from the last thread about proper position size in regards to R/R...

I noticed that when you're constantly buying only one contract your account has a tendency to go nowhere. That's what my account was doing awhile ago until I realized more about R/R. Sometimes as a trader you can be under-position sized. And when that happens your account will seesaw. The 3 Day Live really helped with learning this concept.


In response to your last poem:

Raimo, because I am a gent,
I won't mention noises recorded in your tent,

from what I hear, the sound bites are legendary,
a tad bit messy and quite incendiary,

I am quite worried you called me "Sweet Cheeks",
I can not fulfill the fantasy you seek,

There's only one sex I like and it is not yours,
you mostly lust for creatures on all fours,

and after you've had your fun with them,
you shoot them in the head and put-em on a bun,

and Yes I'm Manic when the market is open, depressed when its closed,
unlike you I trade dressed, I'm not exposed,

I tease you a lot about masturbation,
we all know REE = Raimo's early ejacul@#!*n,

I am ready for the manhunt you suggest,
my name, as of yet, you have not guessed,

So here I am, bring it on Raimo,
I know your gun has decals...all rainbows!,

and I will hear you as you attack,
your ballet shoes make noise, your leotard, it snaps,

quickly I will turn, extend my hand to friend and nemesis,
who I consider the SECOND best poetic supremacist,

and we will celebrate just one last time,
to the end of conversing in witty rhyme.

The Phantom Poet

PP- that was the best one yet and I really needed something to laugh at today. A hearty thank you!

However, my instincts do not like the last two lines.


Very funny! Thank you for the laughs!

SNDA - Can anyone confirm/deny the bull flag breakout I'm seeing today? I'm still getting this pattern down....

Tks, Kim

SNDA looks like it brokeout of the flag and has about 5 points left to the target...

Jason Hewitt

How about AKAM?

I think this was on the bearish watchlist, but today could it be a trend reversal. Worth playing a break of the descending triangle? Kind of like what happened to AZO, it broke the downward trend with a vengeance.

I cant believe I put my last name, it has been a long day on auto pilot!!!



Although it broke out with price, it did not on volume, which if I recall, is the confirmation of a breakout. The greater the volume, the greater the probability of the trade..

VA Beach Girl,

SNDA--I see this as a bull flag breakout as well. I actually had an order in this morning--was planning to take an anticipatory trade on it. Had to leave my desk for a few minutes and it didn't fill. Then I felt like I was chasing it so I left it alone. I have the target around $43 on it. Still contemplating getting in.

BTW--Clean Cups.

Yup SNDA looks like it's broken out on good volume. It's also a great bounce in an upward trend.

Matt, I like AKAM as a reversal too. If you look at the last six or seven days... you'll notice that the highest volume has been on the up (black) days. This is an observation Brett has pointed out when talking about reversals or patterns that none of us have been able to see. The strength of volume has a significant impact on what the pattern does, and when you see five black days with big volume, and two red days with little volume... I think it smells like a duck.

Just got back from our second Thanksgiving dinner. I was going to go for a swim (it's 88 degrees here at 7:00 PM) but I was afraid I'd sink to the bottom of the pool. There's concern that Catherine would take too long weighing the value of having me safe and dry versus wet and submerged... so I opted to stay indoors.

Had one of the best days in our options today... the value of buying everything at REE. Now I've got to figure out when to get out. Man, I had a good look at BOBJ last week and thought it looked stuck in a rut. If I'd listened to myself and had a look at the volume on the last few up days I would have seen a new uptrend coming. Now I can't see it for the freekin' mountain it has formed. My prophet charts show earnings this past Saturday and on the 24th. Go figure.

Back to Vegas tomorrow. Hopefully I'll have more time. Thanks for sharing the great letter Jeff. Just goes to show that there are people out there who know how to look a gift horse in the mouth. You'll never hear ME complain about the lack of Canadian content on the blog, or how you like Kim better than me, or how my parents abused my goldfish, or any of that stuff. No sir, I'll just suck every ounce of info out of this blog and come back and torment you when I have enough money to be King of the World (rather than Mayor of Kohlerville)

I need a little help figuring out this OTM option thing. I had thought that on the MarketCast, Jeff and Eric had suggested buying 1-2 strikes ITM with delta = 0.75+. A few weeks ago, Jeff announced that he always buys OTM. I can see that you pay less per contract and your delta is lower for OTM paper. This being the case, how many contracts do you buy? For example, if I would normally send $1200 - 1500 per option trade, would I buy more OTM contracts to spend about the same $1500? If so, the aggregate delta would be higher than if I bought 1 ITM contract.


I own more contracts of which I can then later sell some and let rest run.
Greater delta with same money output.


Need bigger price movement
OTM is more sensitive to time decay and volatility changes as expiration approaches.
? rate at which the trade can go against you.

--- please help me complete this list.

Long: AAPL (when at $140, thanks Patti for your support)

Thanks Calvin


Please dont change a thing. We love you just the way you are (did I say dont get the wrong idea). Keep up the great work!!!

Brought this forward from last thread........

I need a little help figuring out this OTM option thing. I had thought that on the MarketCast, Jeff and Eric had suggested buying 1-2 strikes ITM with delta = 0.75+. A few weeks ago, Jeff announced that he always buys OTM. I can see that you pay less per contract and your delta is lower for OTM paper. This being the case, how many contracts do you buy? For example, if I would normally send $1200 - 1500 per option trade, would I buy more OTM contracts to spend about the same $1500? If so, the aggregate delta would be higher than if I bought 1 ITM contract.

Advantages: I own more contracts of which I can then later sell some and let rest run.
Greater delta with same money output.

Disadvantages: Need bigger price movement
OTM is more sensitive to time decay and volatility changes as expiration approaches.
? rate at which the trade can go against you.

--- please help me complete this list.

Long: AAPL (when at $140, thanks Patti for your support)

Thanks Calvin

Setting up an potential inverse head & shoulders reversal.

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About me

  • I'm Option Addict
  • From Saratoga Springs, Utah, United States
  • I am a professional trader and an instructor for Investools. I've had relations with the markets for 9 years. Born in Concord, CA, but reside in Saratoga Springs, Utah. Father of THREE, Husband of one.
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