Making Money, Having Fun

"Say goodnight, to the bad guy ..."

2008-11-24T15:32:00.000-08:00

Turns out this blog has been causing more harm than good, so I've decided to shut it down indefinitely. Now I understand why hedge fund professionals are (and should be) so secretive about what goes on behind their doors.

I'll leave the posts up, but I definitely will not be posting here anymore -- profit tracker for sure is going down. I'll still be investing/trading on my own, but I just won't be blogging publicly about it anymore.

Take care, and good luck!

--Kevin

RIMM: Buy, Sell

2008-11-03T11:47:00.000-08:00

At one point in the morning RIMM was up over 5% and I felt that this was unwarranted and was just carry over from last week's momentum. I did this even contra to the VIX ... oh well back to square one and exactly at zero profit on the profit tracker.

Buy to Open: 10 puts Nov RIMM 50 at 2.89
Stop Loss: 10 puts Nov RIMM 50 at 2.68 (executed)

Gain: -$210

--Kevin

Jim Rodgers on Economic Bailout Plan

2008-11-03T10:22:00.000-08:00

Humble, knowledgeable and straight to the point -- great video on Jim Rodger's (hedge fund manager's) perspective on the current economy and the bail out plan:

http://www.bloomberg.com/avp/avp.htm?N=av&T=Jim%20Rogers%20Says%20Markets%20May%20Go%20%60A%20Lot%20Further%20Down%27&clipSRC=mms://media2.bloomberg.com/cache/vCM4wglCjinI.asf#

--Kevin

RIMM: Buy, Sell ... Calls!?!?!

2008-10-29T11:10:00.000-07:00

It's been a while since I've touched calls, but with the VIX dropping like a rock earlier this morning I couldn't resist. I picked up some RIMM calls and tossed them back as I was watching the Dow and VIX. My original target was to ride the momentum to $2.20, however the DJI was loosing intraday gains and VIX was gaining momentum. As I am writing this right now, those calls are at $2.17 right now, so you can argue I sold too soon but given that RIMM has no catalyst itself (today) to fight off 2 800 pound macro indicators, not to mention we're waiting for an announcement from the Federal Reserve (~ 1600 pounds) ... all I have to say is beggars can't be choosers, I'll take my 5% and live to play another day.

Buy: 10 calls of RIMM Nov 55 at $2.01
Sell to Close: 10 calls of RIMM Nov 55 at $2.11

Gain: $100

--Kevin

Dow jumps almost 900 points

2008-10-28T16:16:00.001-07:00

http://articles.moneycentral.msn.com/Investing/Dispatch/market-dispatches-102808.aspx?GT1=33009

I was in a meeting all morning and into the afternoon (even missed lunch) and missed the pop. Not that I would have been in the market (I am still a big fan of puts for right now), but this is great because it has created all sorts of cheap entry points for puts. We'll see what happens tomorrow.

--Kevin

Warren Buffet is Wrong?

2008-10-27T10:33:00.001-07:00

Here's an interesting article from MSN about why you should not follow Warren Buffet's lead on buying stocks now:

http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/leave-stocks-to-buffett-for-now.aspx

No comment from me (he's Warren Buffet) other than if he's wrong he has a little more "cushion" than most of us, or us combined, or us combined squared then square again ... :)

--Kevin

Shameless Plug, Impacta Blog

2008-10-24T08:49:00.000-07:00

Shameless, dirty old b*stard plug here: http://blog.impactalabs.com.

For those of you ever wondering what I really do professional when I am not trading, check out the recent company blog we launched at http://blog.impactalabs.com, it's about computer hacking and all things related to my security services (penetration testing, security code review, security training) company.

--Kevin

Stock Market Trading Tools Roundup

2008-10-23T09:54:00.000-07:00

Photo by Lachlan Hardy

The more I am using Fidelity's Active Trader Pro, the more I am starting to get the feeling that I need something more powerful. For one, I've got double-monitors so it would great if the application supported it -- you can't drag them across monitors or open up another instance. I did a couple searches, and here's what I came up with:

I am definitely interested in hearing what tools you all use, so leave those comments!

--Kevin

RIMM: Buy, Sell Options

2008-10-23T09:43:00.000-07:00

VIX yielded some nice long sell indicators, followed by brief buy blips, which fits into my new model nicely. Picked up some RIMM options, and tossed them back in after I felt the VIX started to end those long sell sessions. These puts will undoubtely continue to grow, but not interested in sticking around too long these days.

Buy to Open: 10 puts RIMM Nov 40 at $2.59
Sell to Close: 10 puts RIMM Nov 40 at $3.00

Gain: $410

--Kevin

Wall Street Fat Cats

2008-10-17T09:02:00.000-07:00

Not much happening on the market today, other than October options expiration, so was reading news articles in the morning. This was on the front page of CNN (http://www.cnn.com/2008/US/10/17/siu.wall.street/index.html), it's about Wall Street, greed, and serious profiting. The natural reaction is to feel hatred towards these guys, but you have to admit, they were smart enough to game the system so kudos to them.

"What they really did was to figure out new and clever ways of investing," Frank
said. "Of creating financial products that very few of us could understand."

Jokes. I used to work with an extremely brilliant individual who did stuff like this. His stuff was legitimate, but the management and most people around him had no idea what he was talking about 99% of the time so he always had his way. Interesting article regardless.

--Kevin

God Bless Stop Loss Orders ... :)

2008-10-16T14:05:00.000-07:00

Photo by gnosis/john r

Those RIMM puts I bought and tossed back in amidst the withdrawal of the VIX went all the way down to to $0.13 bid ... phew, those stop losses saved me a $1887.00 haircut :)

--Kevin

RIMM: Small Loss

2008-10-16T08:33:00.000-07:00

Trying out a new model these days since fundamentals are out the door. Waited on the VIX too long. Small, inexpensive lesson -- gotta love those stop losses when you're trading, the puts are down to $1.45 right now ;)

Buy to Open: 10 puts RIMM Oct 50 at 2.00
Stop Loss: 10 puts RIMM Oct 50 at 1.70, executed

Loss: -$300

--Kevin

The Guy Who Predicted This Economic Meltdown

2008-10-14T14:19:00.000-07:00

Other economists laughed at this guy when he predicted the market was going to collaspe given the current practices and conditions (a couple years), now look who's laughing last. Here's Professor Noriel Roubini's blog:

http://www.rgemonitor.com/blog/roubini

--Kevin

Prostitution Stock?

2008-10-09T23:41:00.000-07:00

I finished work early today to watch the DOW sink like a ship, brought up my Active Trader Pro screen and watched RIMM Oct 55 puts bounce up and down from $3.20, $3.80, $3.40, $3.70, then back down to $2.42 ... lots of profitable bounces yes, but really just minutes in between. Too crazy even for me. Tomorrow morning will be very interesting!

What's the stocks I am looking at ... cigarettes and alcohol. When the economy goes back, you can count on humans to go back to their vices. Too bad there are no prostitution stocks ;)

--Kevin

CEOs 1 World 0 :)

2008-10-08T14:17:00.000-07:00

My heroes! A list of CEO's who's companies got destroyed (in part due to their own doings) from the economic crisis (in part which they helped cause), but were able to cash out millions nonetheless. You know, the guys that are set for life and will live out the rest of their days surrounded by fast cars and minimum 40,000 sq ft homes stuffed with hot women, while the rest of the world works 70+ hours a week and eats card-board and recycled toilet paper for the next 10-20 years.

Featured are the former CEOs of companies for LEH, BSC, CFC, etc. Not one cashing out with less than $16 million: http://articles.moneycentral.msn.com/Investing/CompanyFocus/as-banks-broke-down-ceos-cashed-in-slide-show.aspx?GT1=33002

"Heroes"? Well, I don't admire them and its tragic what's happening to the economy and the people affected by it, but at least I do applaud them for "beating the system". There's nothing fair about the stock market, it's one big game. It's the ones that realize they are in the game and use that to game the other players that win -- these are those folks.

--Kevin

US Bailout Plan = Crap Sandwich

2008-10-03T18:11:00.000-07:00

I was watching Larry King live and his guest Stephanie Miller called the US bailout plan a 'crap sandwich' -- ha ha! I couldn't stop laughing! Scary thing is, 'crap sandwich' just about sums it up for the middle class ...

--Kevin

US House Passes Bailout Plan

2008-10-03T11:19:00.001-07:00

http://www.msnbc.msn.com/id/26987291?GT1=43001

You might have already heard, but in case you didn't the US House passed the $700 BILLION bailout plan for financial services. I agree that something has to be done, the market would really crumble, but I have a feeling this is not the correct plan. The scary part was that other alternatives were barely even considered, it was this plan or nothing. How does this plan differ from the one on Monday, what were the extra throw-ins?

Something of this magnitude feels like it needs more thought ... I am seriously thinking about moving when I get more information on what this plan entails.

--Kevin

"No" on Bailout Plan

2008-09-29T11:40:00.001-07:00

http://www.msnbc.msn.com/id/26884523?GT1=43001

Dow is dropping like a rock, but I think the energy from this decision is already spent. I am still not jumping in yet until a final decision as been made. There are a whole bunch of stocks right now that are cheap ... I like RIMM long term in the call direction, but it's super attractive on the put side for very short.

--Kevin

Bailout Plan: Moving "Quickly" is a bad move ...

2008-09-26T10:58:00.000-07:00

I am far from being a political expert, but there's one thing I do know as a business owner. Moving quickly to get this plan approved and pushed through congress for Monday's opening bell I think might be detrimental. Another entrepreneur, and friend of mine (CEO of CRM software at Avidian.com) told me some wise words once: "Don't get too attached to the outcome". And right now the law makers and designers of this plan seem to be too attached to "Monday morning, Monday morning ...".

There's a difference between moving quickly, and moving quickly methodically and deliberately. Especially when we're talking about $700 billion :)

--Kevin

RIMM down 20%+

2008-09-26T08:05:00.000-07:00

http://finance.google.com/finance?q=NASDAQ:RIMM

RIMM is getting pounded this morning. Weaker forecast amplied by US market worries which amplify Canadian market worries. The old me months ago would have been pissed about missing out on the put momentum, but taking my time on this one and crunching the numbers. No rush. I have a feeling that RIMM might turn into a very sweet long-term value play, but won't know that until I look at how factors like current and long debt has moved, operation cost trends, etc.

--Kevin

Economic Bailout Plan = Action without Consequences

2008-09-25T07:52:00.000-07:00

Read this article this morning indicating that the economic bailout plan is "a done deal" with phrases like "Just tell the American people the cavalry has arrived; we’re home". Statements like these always scare me as a person living in this country, but inspires me as a market trader always looking for the next trade.

Why this Scares Me
It scares me because without consequence, rarely do people ever learn from their mistakes. Do you think that someone who drinks and drives will magically stop doing it if one day they get taken in for a DUI and then gets bailed out by the city mayer just as charges are about to be pressed? Some people might, but an entire country? What did we learn other than "It's ok to drive around without wearing your seatbelts ... because, don't worry the government will bail us out ..."? Granted the other side of the coin is 'economic catastrophy' so pick your poison, but it feels like some important lesson is missing out of this entire situation.

Why this Inspires Me
This inspires me because without consequence, history is bound to repeat itself. Next time we'll see the same symptoms + more. Your job, if you want to make money, is to figure what that "+ more" ... I'd say it'll be a couple years before we see anything like this that can be gamed. The 700B is coming out of tax payers money and what might be interesting is if people decide that they aren't going to stick around and literally pay for other people's (or their own) mistakes and decide to move shop elsewhere like Europe, or Asia -- now that tax burden increases on the people who are staying in the US. Don't get me wrong, I like this country a lot + I like making money, but it would be a shame really to see history repeat itself. Alright, I am looking forward to see what new laws they institutionalize (if any) out of this.

--Kevin

Economic Catastrophy? Alright, I am back, but ...

2008-09-24T14:19:00.000-07:00

Alright, I guess it takes a 'economic catastrophy' (Barack Obama) to break me away from my Impacta work and pay attention to the stock market. Anyhow, the way I see this market breakdown will have a couple effects that can be gamed, assuming the entire US economy doesn't go to Hell altogether:

Companies that are over-valued are getting punished, companies that are undervalued are also getting punished, companies that are juuuuust right are also getting punished.
There are companies with which it is unknown if it's undervalued, just right, or overvalued.
Ripples, and lots of them. The US economy is jittery right now, the slightest hint of bad/good news will create enormous volume.

I was going to close down this blog altogether since barely anyone has ever spoken up (which was my original goal for this blog, to encourage discussion yada yada), but given the above, I've decided to do the following for the coming years:

Clear out the profit tracker back to $0.00.
Start with $3000 and the goal now is to see how long it will take to reach $100k trading purely options, and riding the post-energy from events that happen. I am not trying to predict events, but really let them reveal themselves and ride their energy up or down.
Spend the time in between events figuring out who's undervalued, overvalued, just right and play those short-term based on the direction of #2 (up, down, inconsequential).

So you won't see as much intra-day traffic from me before, but more methodical and deliberate trades. The reality is, I don't have time anymore to be an intra-day trader, it was fun and I enjoyed my time, but as my stock trader friend once told me "why make $100 per day, when you can make $10k in one shot ... ". Let's see what happens, and let's have fun ... alright here we go.

--Kevin

Blame Greenspan? Uh, no ...

2008-08-18T15:15:00.001-07:00

Wow can you believe that it's almost been a month since I made a trade!? Anyways, I am back on this contract work probably until end of April now so I'll be a while before I back to my day-trading ways, but the rate at which I've been earning money the "legit" way I am not sure if I'll ever come back full-time.

Anyhow, I was passing by the MSN website and it had in big bold letters "Thanks a Lot, Green" (for inflation issues). The article is here: http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/NowGreenspanDoesntLikeBailouts.aspx.
It talks about how the Fed has had to bail out Bear Stearns (BSC), Fannie Mae and Freddie Mac and how all this turmoil is thanks to Mr. Greenspan. Greenspan "set this train wreck in motion" Huh?

I don't know Mr. Greenspan from Joe off the street (actually I do, I've just never had him over for dinner) but seems to me the real culprits are the underhanded mortgage/lending practices of companies like you know who :). Greenspan's policies might not have helped, but they certainly didn't solely create the mess we're in now. People getting mortgages when they shouldn't have was the problem, that led to them defaulting on their mortgages when they all of a sudden couldn't instantly sell their homes, which let to huge supply, lower demand which led to ... you get the idea. I can't believe how misleading some of these stories can be sometimes. Now the guy who abused the mortgage system and lost his home can now read this article and get a sense of vindication and find someone else other than himself to blame ... great, history to repeat itself.

--Kevin

Guess who's back on projects ... :(

2008-07-24T13:47:00.000-07:00

Well I'll be stuck on projects for the next 6 weeks ... so you won't be seeing much trading from me. Anyhow, some good has come out of all this Impacta work and marketing, and if things pan out the way I hope -- trust me I'll be a retired grunt and trading ALL the time (evil grin).

I ended early today (about 1/2 hour before market close) and took a look at the carnage MER was taking and tried to get in some downward momentum, but missed it entirely. VIX was nice and high today + housing market data was pretty poor, so perfect day for puts ... oh well that's life, plus there will be lots more opportunities later.

--Kevin

What Happens When Banks Fail

2008-07-15T12:35:00.000-07:00

Great article on MSN today about what happens before, during and after banks fail: http://www.msnbc.msn.com/id/25678769?GT1=43001. I bank at a pretty small credit union myself (but then again it's backed by almost 80% of all of Microsoft employees payrolls so I am not worried :P) but still useful knowledge in case yours goes upside down.

--Kevin