Frx

[riverbabe]

'Ya just gotta LOVE that vampire bat saliva. Looks like a buy here with the positive news yesterday? Maybe a short term trade? river

[New-born baby]

'Ya just gotta LOVE that vampire bat saliva. Looks like a buy here with the positive news yesterday? Maybe a short term trade? river

I don't know, River. Today's action was a black candle. Opened higher, but then sold off and finished higher than yesterday, but still lower than today's open. Kinda bearish.

Then you have that gap down from about a week ago. Yeah, FRX has traded up a little since then, but that is normal for a bear flag. That's bearish, too.

PnF gave a high pole warning on Oct 23. I have learned to respect those things. Another bear.

SO I'd have to say that if you got into this one, you'd best be setting a close stop. You have three bears staring you in the face, and I usually don't jump into a trade with three bears staring me in the face.

[riverbabe]

I don't know, River. Today's action was a black candle. Opened higher, but then sold off and finished higher than yesterday, but still lower than today's open. Kinda bearish.

Then you have that gap down from about a week ago. Yeah, FRX has traded up a little since then, but that is normal for a bear flag. That's bearish, too.

PnF gave a high pole warning on Oct 23. I have learned to respect those things. Another bear.

SO I'd have to say that if you got into this one, you'd best be setting a close stop. You have three bears staring you in the face, and I usually don't jump into a trade with three bears staring me in the face.

Actually I only mentioned it because my "real broker" today recommended it as a short term trade looking for a 7-8 point gain. He apparently is relying on the resumption of the clinical trial announced yesterday, after the sell-off (the gap down) last week when the trial was temporarily suspended. This broker is generally very reliable. He is a senior broker, works for one of the biggies and has made me a lot of money over many years. Not only that, but he knows that I have learned enough to monitor his every move. I don't have a buy confirmation yet, so maybe he is waiting for a better entry.

However, I also was a little horrified at the chart and the P/F. Your analysis is dead on and I appreciate you taking the time to look at it. This will be a real test of his judgement (and my trust), so I'll be keeping very close tabs on it. Thanks again. river

[Runner]

Looks to me as if FRX is sitting near support from a weekly chart perspective. Daily chart does not appeal to me with that gap down..

[riverbabe]

Looks to me as if FRX is sitting near support from a weekly chart perspective. Daily chart does not appeal to me with that gap down..

Thanx Runner. See previous response to NBB. I do keep in mind that my broker has access to a lot of inside professional research that us plebes aren't privilege to. I learned that from an earlier subscription to "breakout stocks" and "stocks under $10" on thestreet.com. Man, they had access to all kinds of research that didn't show up on the normally accessible news threads, and they shared it with subscribers! Just like Las Vegas. The odds are stacked in the house's favor. So, if the house professes to be working to your benefit, sometimes you just have to trust. Thanks for taking the time to comment! river

[Runner]

Well I don’t have his research that is for sure. I just have a chart in front of me. My bias is that of caution in FRX. I always view a gap down as a sign of weakness. I see next bull task is a close above 50.60.

[New-born baby]

Thanx Runner. See previous response to NBB. I do keep in mind that my broker has access to a lot of inside professional research that us plebes aren't privilege to. I learned that from an earlier subscription to "breakout stocks" and "stocks under $10" on thestreet.com. Man, they had access to all kinds of research that didn't show up on the normally accessible news threads, and they shared it with subscribers! Just like Las Vegas. The odds are stacked in the house's favor. So, if the house professes to be working to your benefit, sometimes you just have to trust. Thanks for taking the time to comment! river


Don't you just love stock market manipulation? :(

Anyway, I'll say this: we have serious resistance at $49.93. If FRX can clear it, then I'd be much more bullish on FRX. But remember: I only read charts.

[Runner]

Thanx Runner. See previous response to NBB. I do keep in mind that my broker has access to a lot of inside professional research that us plebes aren't privilege to. I learned that from an earlier subscription to "breakout stocks" and "stocks under $10" on thestreet.com. Man, they had access to all kinds of research that didn't show up on the normally accessible news threads, and they shared it with subscribers! Just like Las Vegas. The odds are stacked in the house's favor. So, if the house professes to be working to your benefit, sometimes you just have to trust. Thanks for taking the time to comment! river

I guess even the pro's get it wrong with all the extra research. We shall see maybe it will fill the gap and take off. I would be a little concerned if I was holding it. Then again my risk is most likely different from others.

[riverbabe]

I guess even the pro's get it wrong with all the extra research. We shall see maybe it will fill the gap and take off. I would be a little concerned if I was holding it. Then again my risk is most likely different from others.

Runner, it doesn't look good to me either! Everything is going further negative. Full stochs are going further into oversold territory. RSI is almost there. MACD is really negative, A/D ratio is decreasing, as is OBV. Lots of analysts downgrades, even with a positive earnings report and positive projections. Still selling off even with good FDA news. Not good. Not good at all.

The broker is getting a call from me first thing Monday morning. This is now too risky for me also. Will post the results here. river

[Lyehopper]

I think FRX is looking like a great short play here myself....

You know River.... I fired my broker years ago.... and this is the God's honest truth, he's now delivering mail for the US Postal Service in Lynchburg VA.LOL!.... Looking back now on some of the advice he gave me (and the stocks he pumped) I see that he wasn't qualified to even be the janitor at a brokerage firm.

[New-born baby]

Runner, it doesn't look good to me either! Everything is going further negative. Full stochs are going further into oversold territory. RSI is almost there. MACD is really negative, A/D ratio is decreasing, as is OBV. Lots of analysts downgrades, even with a positive earnings report and positive projections. Still selling off even with good FDA news. Not good. Not good at all.

The broker is getting a call from me first thing Monday morning. This is now too risky for me also. Will post the results here. river

River,
You have a first rate option chain on FRX.

[riverbabe]

River,
You have a first rate option chain on FRX.

Baby, the relative options novice has to ask "what is a 'first rate option chain'"? Could I potentially make money on this POS if I sell calls? river

[riverbabe]

I think FRX is looking like a great short play here myself....

You know River.... I fired my broker years ago.... and this is the God's honest truth, he's now delivering mail for the US Postal Service in Lynchburg VA.LOL!.... Looking back now on some of the advice he gave me (and the stocks he pumped) I see that he wasn't qualified to even be the janitor at a brokerage firm.

Yeah but... this is the guy that lost only 10% in my sister-in-law's 1.5M portfolio when the big tech bubble burst! I know this because I was the executor of her will. Another brokerage (that I fired!) lost me more than 50% (a nightmare, kept selling losers and investing in worse losers). That's why I was so impressed and switched. I haven't been disappointed. He and I are on really good terms so a good discussion about any investment he suggests isn't a problem.

[New-born baby]

Baby, the relative options novice has to ask "what is a 'first rate option chain'"? Could I potentially make money on this POS if I sell calls? river

Sure. And at the least, you won't lose money. I don't know what you paid, but you can sell a $45 call and if it doesn't fall below $45 by Nov 17, it will get called away and you'll break even or make a little. If it falls further, you sell the $40 call and hold the $45 call for extra profit.

I'd sell a call on this one Monday. I would not allow myself to get in a hole that I can't get out of without a lot of pain.

Another play: sell the call and buy a put.

Give me the entry price and we can at least suggest a play.

[riverbabe]

duplicate, sorry

[riverbabe]

NBB, the entry price was 48.98 including commissions (400 shares). river

[New-born baby]

NBB, the entry price was 48.98 including commissions (400 shares). river

Okay. You basically have $49 in a stock now valued at $47.30. It has incredible resistance at $49.87, so it doesn't look like $50 is in the cards this month. Since I am writing one hour before the market opens, prices may change from this post. But what you can do for cheap insurance is sell the $50 NOV call for $.25 per share, and buy the $45 NOV PUT for $.40. So for $.17, you can protect yourself for now. ($.15 plus $.01 for each transaction if you are using InterActive Brokers for your brokerage firm). THAT'S CHEAP insurance, imho. :D

If we had acted earlier, we could have sold the $45 call for $4.40, and guaranteed yourself a small profit with a lot of insurance, and you'd be out of the position by NOV 17 (my opinion: the quicker out of this one the better).

IF FRX starts to drift even lower (below $46 is trouble because it makes a head and shoulders target of $38 minus), you may be wise to buy two puts for every 100 shares so that you can make money on the fall in price. It may be wise to sell two calls for every 100 shares also. Once the direction of the stock becomes clear, get in a position, and when the stock hits support, you could get out of a position if it seems advisable. In addition you may want to consider selling calls at a closer strike. For instance you could sell the DEC $45 right now for $3.30. You'd only do that if you are convinced FRX is going to take a dump. Again, I don't like this one below $46.

With options there are 10,000 things you can do. If I figure I made a mistake, I won't let the position drift so far down that I can't sell an option to at least break even. This one has already drifted too far South for that now. Let's hope for an up day today :D

[riverbabe]

Baby, everything you have said makes total sense. Thank you! And I am working on it.

Also, what you have made me realize is that I need to learn much more about options. I went to several options lectures at the Money Show in Vegas and what I heard made me a little nervous because there are so many different strategies with "foreign names." I also have the free CD from Optionetics but haven't taken the time to play it yet (my BAD!). Thanksgiving resolution: Do it! The way you explain your strategy is straightword and it makes me realize that I CAN do this if I just do some studying! I really like the idea of being able to break even on a bad trade just by buying insurance. Now, it's just a matter of learning what insurance to buy and when. river

[New-born baby]

Baby, everything you have said makes total sense. Thank you! And I am working on it.

Also, what you have made me realize is that I need to learn much more about options. I went to several options lectures at the Money Show in Vegas and what I heard made me a little nervous because there are so many different strategies with "foreign names." I also have the free CD from Optionetics but haven't taken the time to play it yet (my BAD!). Thanksgiving resolution: Do it! The way you explain your strategy is straightword and it makes me realize that I CAN do this if I just do some studying! I really like the idea of being able to break even on a bad trade just by buying insurance. Now, it's just a matter of learning what insurance to buy and when. river


Excellent.

Nice to see FRX moving up a little this morning. I am watching it for you. I'd like to see a nice play for you for $$$ and safety. If I find one, I"ll let you know.

What is your broker? If you have Interactive Brokers, then you can buy or sell an option for $1. But if you trade two or more, the price drops down to $.50 per option. CHEAP. Some folk are paying $9.95 per trade plus the $.95 per contract.

[riverbabe]

NBB, I talked to my broker by email this morning. Basically, I think the difference between him and us is the definition of "short term trade." He is looking much further down the road. Also, he told me he has his own $ invested in FRX too and has faith in his "analysis."

I have asked him to give me an outline of his analysis and what his strategy would be if the shorts got hold of it and it sank fast.

He really got freaked out by talk of options strategies. At this point, I'm not sure I can convince him to do this in FRX, and my hands are tied because the shares are held in the brokerage account.

Anyway, he closed with..."Out goes my neck, I'd rather add than bail. Now I'll watch doubly closely .... ." That last sentence at least is good. river

[DSteckler]

Ask why he freaked out when you talked option strategies. Unless buying or selling options is contrary to your account's investment goals and objectives, or the risk tolerance level selected on your account application, he has to carry out your instructions.

[riverbabe]

Ask why he freaked out when you talked option strategies. Unless buying or selling options is contrary to your account's investment goals and objectives, or the risk tolerance level selected on your account application, he has to carry out your instructions.

Thanks, I need to look back at that paperwork!

[riverbabe]

The broker got back to me. His analysis is for a 2-4 month term and it makes some sense to me in this time frame. Also, he would rather use stops than options on this one. I'll stick with him and his plan for now. He has considered all the alternative scenarios, but is still overall bullish. river

[New-born baby]

He really got freaked out by talk of options strategies. At this point, I'm not sure I can convince him to do this in FRX, and my hands are tied because the shares are held in the brokerage account.

Anyway, he closed with..."Out goes my neck, I'd rather add than bail. Now I'll watch doubly closely .... ." That last sentence at least is good. river


River,
Let me say something about brokers. Most cannot read a chart. I have two family members who work for brokerage firms, and most within their firms cannot read a chart or execute option strategies. Frankly just a few bigwigs in the main office in [city deleted] call the plays and they encourage their clients to purchase suggested products. Is that how your broker works? Anyone who "freaks out" over a covered call, or a straddle is really ignorant of options. I will tell you why he freaked out: he doesn't know anything about options. And when a person adds to a losing position, that is very dangerous. Ask any experienced trader. Doubling down is dangerous.

Yes. I am a hard nose. But I do think you should realize that most brokers know much less than you know. And they get paid to give "advice."

[riverbabe]

NBB, without revealing the exact words of his email to me, the impression I have is exactly the same as yours re. options. He has sold calls for me in the past, but got freaked over "complicated" strategies. 'Nuff said. Per my previous post, I am going to learn these for my mad money account because I believe they are very valuable. Thanks for all your help and consideration. river

[DSteckler]

What brokerage firm does he work for?

[riverbabe]

What brokerage firm does he work for?

Actually, I don't want to divulge that in this public forum. Hope you understand. It really is one of the biggies. river

[DSteckler]

If it's ED Jones, that explains it. The firm is very much opposed to all option strategies except covered calls, and even then it's like pulling teeth to get them to do it.

[New-born baby]

If it's ED Jones, that explains it. The firm is very much opposed to all option strategies except covered calls, and even then it's like pulling teeth to get them to do it.

And I wonder why.

[Tatnic]

River,
Let me say something about brokers. Most cannot read a chart. I have two family members who work for brokerage firms, and most within their firms cannot read a chart or execute option strategies. Frankly just a few bigwigs in the main office in [city deleted] call the plays and they encourage their clients to purchase suggested products. Is that how your broker works? Anyone who "freaks out" over a covered call, or a straddle is really ignorant of options. I will tell you why he freaked out: he doesn't know anything about options. And when a person adds to a losing position, that is very dangerous. Ask any experienced trader. Doubling down is dangerous.

Yes. I am a hard nose. But I do think you should realize that most brokers know much less than you know. And they get paid to give "advice."

I don't think this is necessarily true. This guy is being conservative because he knows his client is inexperienced and may panic and do something rash. And even though writing calls can be a pretty conservative play, it can also be pretty stupid depending on which calls you write. So we really don't know enough to say whether or not he's doing right by her.

And as Dave said, Ed Jones as a rule does not even deal with options, in fact I thought they didn't period but I could be wrong on that. And just because they don't doesn't mean they're not doing right by their clients, I believe they have one of the highest ratings of client satisfaction as most of their clients are people who could care less about trading for themselves or working on their own cars, etc.

[riverbabe]

I don't think this is necessarily true. This guy is being conservative because he knows his client is inexperienced and may panic and do something rash.

WHAT??? WHAT??? WHAT??? I have been investing successfully for over 35 years!!! Inexperienced NO NO NO, panic NO NO NO, do something rash NO NO NO. Do I come across as inexperienced, panicable and rash??? Wow! I am NONE of those things! You must have me confused with somebody else! Are you stereotyping me because I am female??? I admit I don't know a heck of a lot about options strategies as insurance for stock positions, but that doesn't mean I'm inexperienced in other types of investing!!! Who ARE you??? river

[riverbabe]

WHAT??? WHAT??? WHAT??? I have been investing successfully for over 35 years!!! Inexperienced NO NO NO, panic NO NO NO, do something rash NO NO NO. Do I come across as inexperienced, panicable and rash??? Wow! I am NONE of those things! You must have me confused with somebody else! Are you stereotyping me because I am female??? I admit I don't know a heck of a lot about options strategies as insurance for stock positions, but that doesn't mean I'm inexperienced in other types of investing!!! Who ARE you??? river

It was a JOKE! Illustrating inexperience, panic and rashness! Love you Tatnic. river

[Tatnic]

WHAT??? WHAT??? WHAT??? I have been investing successfully for over 35 years!!! Inexperienced NO NO NO, panic NO NO NO, do something rash NO NO NO. Do I come across as inexperienced, panicable and rash??? Wow! I am NONE of those things! You must have me confused with somebody else! Are you stereotyping me because I am female??? I admit I don't know a heck of a lot about options strategies as insurance for stock positions, but that doesn't mean I'm inexperienced in other types of investing!!! Who ARE you??? river

I was going by that beautiful picture of the trout, the one where you look to be no older than 18! Maybe that's your daughter or an old pic? My bad for assuming ;)

But in all seriousness, trading options can be a way to just lose your money at a faster rate. If you enter a bad trade, get out immediately instead of then trying to play around with options. Its like driving with 4 wheel drive...it has to be engaged before you get into the mud hole, not afterwards.

NOw just because Dr. Haddad uses options to his advantage doesn't mean you can. He practices a very conservative form of call writing which he has honed over a long course of time, and he knows he's going to lose money on the options trade if he is to be successful. That's a totally different mindset from what novice option traders have.

[Tatnic]

I was going by that beautiful picture of the trout, the one where you look to be no older than 18! Maybe that's your daughter or an old pic? My bad for assuming ;)

But in all seriousness, trading options can be a way to just lose your money at a faster rate. If you enter a bad trade, get out immediately instead of then trying to play around with options. Its like driving with 4 wheel drive...it has to be engaged before you get into the mud hole, not afterwards.

NOw just because Dr. Haddad uses options to his advantage doesn't mean you can. He practices a very conservative form of call writing which he has honed over a long course of time, and he knows he's going to lose money on the options trade if he is to be successful. That's a totally different mindset from what novice option traders have.

I really like Haddad's strategy and I'll tell you why. When he sells (writes) a covered call, he focuses on options with more time value than intrinsic value. If he is to be sucessful, the intrinsic value of the option will move in lockstep with the underlying stock, while the time value will be less than what he sold. So while he usually loses on the call write he really gains because the time value he shorted is less when he covers. Its a pretty simple but brilliant strategy, and at the same time very conservative. This is by far one of the most appropriate option plays I've ever witnessed and its so simple that not too many people could make it work.

[riverbabe]

Tatnic, Dr. Haddad's strategy intrigues me too - especially when his share number is so large that he makes a lot of money from just penny gains. Your explanation of his options strategy is interesting. I am going to have to pay more attention to it so I too can see what he is doing in real time. Thank you!

BTW, if you want to see the "real" me, check out "Who are you?" Lyehopper already outed me. But there is a picture of me on my 39th Birthday ;) . river

[riverbabe]

Well, my broker came through. FRX sold 1/30/07 at 56.026 for the 7 point short term gain he promised. (Bot 10/31 @ 48.98). Not hedged.

Nice surprise. Riverbabe