Stock Market Day-Trading Discussion Thread
- Thread starter usctrojanman29_IHB
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Simon will need to rollover some debt soon. Thats not going to be easy. Great stock to short.
But as I leave work its looking really ugly in Asia for Thursday morning.
And I have a really bad feeling about Citi. Credit Default Swaps up 120 and the stock off 23%. They may be the next banking shoe to fall.
If you watch CNBC's Fast Money, then you might get the same ideas as trojanman. Of course I don't think they are bad ideas, and I may follow on the Simon play. Anyone know when they have to start rolling their debt over, and how much it is? Eh, I have a feeling I will be looking at a 10-Q tonight. Oh who am I kidding, me and my ADD, here is the link to the PDF for their 11/7/08 10-Q.
Nice. Did you ever pick up SPG and SHLD
Or what about selling the Nov 35 or 40 puts?
usctrojanman29_IHB
New member
Bite your tounge. haha Anyhow, I'm considering selling short Sears and Simon Properties because I think those stocks can be haircut down another 50%+ in the next 2-3 months. I think Sears is one of the worst retailers and Simon is the largest mall owner in the US.WINEX said:
bltserv_IHB
New member
usctrojanman29 said:
Simon will need to rollover some debt soon. Thats not going to be easy. Great stock to short.
But as I leave work its looking really ugly in Asia for Thursday morning.
And I have a really bad feeling about Citi. Credit Default Swaps up 120 and the stock off 23%. They may be the next banking shoe to fall.
graphrix_IHB
New member
skek said:
If you watch CNBC's Fast Money, then you might get the same ideas as trojanman. Of course I don't think they are bad ideas, and I may follow on the Simon play. Anyone know when they have to start rolling their debt over, and how much it is? Eh, I have a feeling I will be looking at a 10-Q tonight. Oh who am I kidding, me and my ADD, here is the link to the PDF for their 11/7/08 10-Q.
usctrojanman29_IHB
New member
From skimming through their 10-Q, it looks like they got a boatload of debt that's maturing in 2010. You might have to look at their 10-K to see the footnote on the 5-year debt repayment schedule. The other reason I see these guys having problems refinancing their debt is that the 30-year treasury swap are trading NEGATIVE which means that people are willing to pay you to convert to fixed rates versus floating or in other words people are buying up the 30-year bonds like no tomorrow due to the fear of lower rates (as witnessed today). I think Simon might have the same ultimate fate as General Growth...bankruptcy....as malls are the first retailers to get hit the hardest (grocery anchored retail centers are the last to get hit). I think vacancies at malls will begin to climb shortly after x-mas as in-line retailers go belly up and the big buys scale down and close stores.graphrix said:
usctrojanman29_IHB
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Well, I like to take calculated risks since I'm young. I'm only gonna short like 50-100 shares of each stock with over $100k in liquidity to my name.skek said:
jbenko_IHB
New member
USCtrojan,
I think plays on Simon and Sears are fantastic plays that I will engage in as well. I think they both go into single digits eventually. Especially Sears...I hate Sears.
Here is my play though. Instead of shorting the stock I'm going to buy put options and I'm thinking out of money puts. For Simon, I'd say around 25 strike and for Sears I'd say 15 strike (december). I'll run the calcs later tonight to see which strike is the best option.
The main reason for puts vs. shorting is capital preservation. We are in new territory. It doesn't matter the fact that both of these companies can go under, but you have to remember that these markets are irrational and wild. We can easily go up 1,000 and this stock can easily move up 10 a share kicking you in the nuts. You can position yourself where you buy puts giving you the same reward structure as shorting, with a lot less capital.
This market will hit 7K imo and both of these suckers will go down, but since we are on the low end of the market and haven't had a big blow up rally...the potential time bomb is ticking...
Saying that I wouldn't touch November puts for the same reason as above.
Either way, big props for bring it to attention. It slipped through my hands and the potential is great and obvioius.
I think plays on Simon and Sears are fantastic plays that I will engage in as well. I think they both go into single digits eventually. Especially Sears...I hate Sears.
Here is my play though. Instead of shorting the stock I'm going to buy put options and I'm thinking out of money puts. For Simon, I'd say around 25 strike and for Sears I'd say 15 strike (december). I'll run the calcs later tonight to see which strike is the best option.
The main reason for puts vs. shorting is capital preservation. We are in new territory. It doesn't matter the fact that both of these companies can go under, but you have to remember that these markets are irrational and wild. We can easily go up 1,000 and this stock can easily move up 10 a share kicking you in the nuts. You can position yourself where you buy puts giving you the same reward structure as shorting, with a lot less capital.
This market will hit 7K imo and both of these suckers will go down, but since we are on the low end of the market and haven't had a big blow up rally...the potential time bomb is ticking...
Saying that I wouldn't touch November puts for the same reason as above.
Either way, big props for bring it to attention. It slipped through my hands and the potential is great and obvioius.
graphrix_IHB
New member
Heh, I hadn't read BV's latest comment, but I was going to come in and say the December puts for the 25 strike on SPG looks good, and the 15 strike SHLD looks good. I have a feeling when BV runs the calcs, the SHLD will pan out the best. However, I do think SPG is going to take a dump tomorrow, as it looks like GGP is going to file BK. Duh! BTW, according to Wiki GGP is the master developer of Summerlin NV. after taking it over from the Hughes corp.
Anyway, the SPG put is expensive, but the momentum is down, way down. After looking at their 10-Q, I do have some concerns. They were overly optimistic about the holiday sales numbers, and it will be reflected in the next 10-Q. They were happy about the low rate on the LIBOR, and we all know that has had to hurt them a bit. They mention how they have enough cash and credit facilities to make it through 2009, but after that... they may not be able to continue paying their debt without rolling it over. With wacky rates, retail numbers expected to be the worst since before any of us were born, and them dependent upon debt, I would say there is a high likelihood you would make money on the short/put side of this stock.
Here is my warning, and as the futures show, the market will open down tomorrow, and so will SPG. But... we did not have a short covering rally today, so expect at least one tomorrow, if not two. I would say get in, and get out quickly once you see the rally coming. Or... you can take the sit back and wait for the rally approach, and hope you can pick up the puts even cheaper. I will say, I have tried this strategy on C lately, and it hasn't worked. Today the rally never came, and yesterday despite any rally, gawddamn C kept going down. Grumble, grumble.
Anyway, the SPG put is expensive, but the momentum is down, way down. After looking at their 10-Q, I do have some concerns. They were overly optimistic about the holiday sales numbers, and it will be reflected in the next 10-Q. They were happy about the low rate on the LIBOR, and we all know that has had to hurt them a bit. They mention how they have enough cash and credit facilities to make it through 2009, but after that... they may not be able to continue paying their debt without rolling it over. With wacky rates, retail numbers expected to be the worst since before any of us were born, and them dependent upon debt, I would say there is a high likelihood you would make money on the short/put side of this stock.
Here is my warning, and as the futures show, the market will open down tomorrow, and so will SPG. But... we did not have a short covering rally today, so expect at least one tomorrow, if not two. I would say get in, and get out quickly once you see the rally coming. Or... you can take the sit back and wait for the rally approach, and hope you can pick up the puts even cheaper. I will say, I have tried this strategy on C lately, and it hasn't worked. Today the rally never came, and yesterday despite any rally, gawddamn C kept going down. Grumble, grumble.
usctrojanman29_IHB
New member
I hope we get a big rally Thanksgiving week so my GS calls can expire worthless. I'd like to pick up these turds at higher prices because they are going to single digit stocks next year.graphrix said:
usctrojanman29_IHB
New member
The next support levels for the major indexs which are the Oct. 2002 lows are as follows (if we fall/close below them....well, LOOK OUT BELOW):
Dow - 7,181 (intraday) and 7,286 (closing)
NASDAQ - 1,110 (intraday) and 1,114 (closing)
S&P - 769 (intraday) and 777 (closing)
Dow - 7,181 (intraday) and 7,286 (closing)
NASDAQ - 1,110 (intraday) and 1,114 (closing)
S&P - 769 (intraday) and 777 (closing)
jbenko_IHB
New member
Here are the calcs. The first decline is based on a 60day volatility probability, the second decline is based on 30day volatility probability. We have experienced faster volatility the past 30 days than the past 60 days. So if you want a more conservative approach use the first decline, if you think the stock will keep up with its 30 day volatility then the second decline/payout will be favored.
SPG @ 45/9.8 (29.9% decline/65.8% payout) or 40/7.0 for (31.6% decline/132% payout)
SHLD @ 30/8.0 (36% decline/46.88% payout) or 25/5.5 for (54.4% decline/118% payout)
Personally, I'm going to pass on both of these. Though the potential is there, the option premium is too expensive for the payout. I can't fathom another 54% decline in stock price to only get a 100% return. Of course if the stock moves 20 dollars south right off the bat, you'll profit. But my model calculates option value on expiration day. Its too difficult to calculate a progressive option value price.
If you guys look at my previous post where I posted the calcs on FSLR, XOM, KBH etc...you'll see how different they are. A smaller decline is needed and even a bigger payout. It suprised me to be honest, I really thought it was a homerun, but I'll pass.
Shorting though might not be a bad option because there is no premium to be paid. You get instant results if you are right.
SPG @ 45/9.8 (29.9% decline/65.8% payout) or 40/7.0 for (31.6% decline/132% payout)
SHLD @ 30/8.0 (36% decline/46.88% payout) or 25/5.5 for (54.4% decline/118% payout)
Personally, I'm going to pass on both of these. Though the potential is there, the option premium is too expensive for the payout. I can't fathom another 54% decline in stock price to only get a 100% return. Of course if the stock moves 20 dollars south right off the bat, you'll profit. But my model calculates option value on expiration day. Its too difficult to calculate a progressive option value price.
If you guys look at my previous post where I posted the calcs on FSLR, XOM, KBH etc...you'll see how different they are. A smaller decline is needed and even a bigger payout. It suprised me to be honest, I really thought it was a homerun, but I'll pass.
Shorting though might not be a bad option because there is no premium to be paid. You get instant results if you are right.
jbenko_IHB
New member
Here are some other calcs.
GET @ 7.5/2.0 (41.0% decline/143% payout) or 2.5/0.15 for (-71%% decline/300% payout)
ZLC @ 10/2.4 (36.3% decline/91.7% payout) or 7.5/1.1 (50.5% decline/200% payout)
This is more of a range I like. For example GET has a 60day 71% volatility for a 300% payout. I can come short of that...lets say 41% and still have 143% payout. However, the potential is there.
I'm just more concearned about a rally. I think I'm going to keep the puts I have for a potential blow up, however I'm more interested in making future plays once we get a rally.
Right now the 30 day and 60 day Stochastics shows that we are well below the lows and RSI is also at its lows. Put/Call ratios are at their highs and short activity is very high as well. All this leads to a giant rubberband stretched to its mzx ready to burst. Since we are in new territory trying to retest the resistance of 7800 there is a potential we blow right through it and have a -600 pt drop. At the same time that will lead to more pressure and setup a perfect scenario where we can have a 1K or 1.2K intraday rally. Not because fundamentals are there, but because of so much short activity. IT will be the mother of all shorts.
To be honest...the right play in this type of situation is either calls (as there is a greater chance for upward movement than downward) on decent stocks, or a straddle to capture big movements either direction.
Or perhaps a cheaper straddle...ATM puts and deep out of the money calls.
GET @ 7.5/2.0 (41.0% decline/143% payout) or 2.5/0.15 for (-71%% decline/300% payout)
ZLC @ 10/2.4 (36.3% decline/91.7% payout) or 7.5/1.1 (50.5% decline/200% payout)
This is more of a range I like. For example GET has a 60day 71% volatility for a 300% payout. I can come short of that...lets say 41% and still have 143% payout. However, the potential is there.
I'm just more concearned about a rally. I think I'm going to keep the puts I have for a potential blow up, however I'm more interested in making future plays once we get a rally.
Right now the 30 day and 60 day Stochastics shows that we are well below the lows and RSI is also at its lows. Put/Call ratios are at their highs and short activity is very high as well. All this leads to a giant rubberband stretched to its mzx ready to burst. Since we are in new territory trying to retest the resistance of 7800 there is a potential we blow right through it and have a -600 pt drop. At the same time that will lead to more pressure and setup a perfect scenario where we can have a 1K or 1.2K intraday rally. Not because fundamentals are there, but because of so much short activity. IT will be the mother of all shorts.
To be honest...the right play in this type of situation is either calls (as there is a greater chance for upward movement than downward) on decent stocks, or a straddle to capture big movements either direction.
Or perhaps a cheaper straddle...ATM puts and deep out of the money calls.
usctrojanman29_IHB
New member
So far so good, GS is down 3 to 52. The bid on the calls are now down to $.04 and the ask down to $.05.
jbenko_IHB
New member
usctrojanman29 said:
Nice. Did you ever pick up SPG and SHLD
BLUE FIRE_IHB
New member
usctrojanman29 said:
Or what about selling the Nov 35 or 40 puts?
usctrojanman29_IHB
New member
Good point because the premiums on this stock are outragous. I might sell maybe like 10 of these puts by the end of the day if we continue to trade lower at a higher price (even the 30 puts).BLUE FIRE said:
usctrojanman29_IHB
New member
Wow, the 1-month and 3-month T-bill are yielding .01%...I'm really concerning that we may be looking at a HUGE short covering rally in the near term (hopefully next week). Oil is almost at $50...WOW.
Another WOW, GS breaks below $50 a share and the $70 calls bid goes up to $.06 and the ask goes up to $.09 (guess the volatility is climbing).
Another WOW, GS breaks below $50 a share and the $70 calls bid goes up to $.06 and the ask goes up to $.09 (guess the volatility is climbing).
usctrojanman29_IHB
New member
No, both opened lower and I'm waiting for a rally before I enter. It's tempting to sell 50 shares of each now and then possibly sell another 50 shares after a short squeeze, but I'll just wait for the rally because both these dogs do into single digits next year. The only think that will sorta suck is that I'll have to pay the dividend on SPG.blackvault_cm said: