Small Cap Value Report 10 Jul - AVN VNET ZATT TMMG SPRP SID RGS RST ANCR
this morning, and alleges that, since 2007, the Ireland based company is violating a 2005 agreement not to offer trades on commodities like gold and oil.
The CFT also accuses Intrade of soliciting retail customers to buy options on future events - Another violation of their 2005 agreement, which was made, because the CFTC accused Intrade of violating these same rules. The suit was filed in D.C.
Fundamental analysis based investors will argue that this stock is cheap at this level and I'm willing to buy it down here. While traders like to look for ideal support levels to hold before going long, selling naked puts removes that part of the equation. This example isn't too popular with a lot of traders since selling naked puts can present some nerve rattling experiences.
Intrade and TEN jointly operate an online "prediction market" trading website, through which customers buy or sell binary options which allow them to predict ("yes" or "no") whether a specific future event will occur, according to the CFTC's complaint. customers to trade options products prohibited by the CFTC's ban on off-exchange options trading.
Specifically, according to the complaint, from September 2007 to June 25, 2012, Intrade and TEN operated an online "prediction market" trading website, which allowed U.S.
customers to buy and sell off-exchange options on the website.
In addition, the complaint alleges that TEN violated an order issued by the CFTC in 2005 that found that TEN had previously engaged in similar conduct and ordered TEN to cease and desist from violating the Commodity Exchange Act and CFTC regulations, as charged.
Lock and Replace
Let's assume you bought 100 shares of International Business Machines (IBM) at an average of $200/share.
In this article, I will talk about utilizing options exclusively into a binary event as a way to take advantage of high IV (implied volatility). One option (no pun intended) is to lock in profits of $7.80/share and use the profits to buy calls or call spread into earnings. By Jeff Wilson
In the previous post I talked about supplementing stock positions with options as part of a hedging strategy. It's trading at $207.80/share. You are faced with the question of not knowing what to do with your profitable position into earnings.
activities violate the Commodity Exchange Act or the CFTC's regulations." persons to buy and sell commodity options, even if they are called 'prediction' contracts, unless they are listed for trading and traded on a CFTC-registered exchange or unless legally exempt. The requirement for on-exchange trading is important for a number of reasons, including that it enables the CFTC to police market activity and protect market integrity. David Meister, the Director of the CFTC's Division of Enforcement, stated: "It is against the law to solicit U.S. Today's action should make it clear that we will intervene in the 'prediction' markets, wherever they may be based, when their U.S.
The CFTC's complaint also charges Intrade and TEN with knowingly filing false "Annual Certification" forms with the CFTC stating that Intrade limited its options offerings to eligible market participants. Contrary to these representations, the complaint alleges that Intrade unlawfully solicited and permitted retail U.S.
customers for trading, as well as soliciting, accepting, and confirming the execution of orders from U.S. Here's the CFTC release:
Washington, DC - The U.S. The CFTC's complaint also charges Intrade and TEN with making false statements concerning their options trading website in documents filed with the CFTC, and charges TEN with violating a 2005 CFTC cease and desist order (see CFTC Press Release 5124-05, October 4, 2005). Commodity Futures Trading Commission (CFTC) today filed a civil complaint in federal district court in Washington, DC, charging Intrade The Prediction Market Limited (Intrade) and Trade Exchange Network Limited (TEN), Irish companies based in Dublin, Ireland, with offering commodity option contracts to U.S. customers, all in violation of the CFTC's ban on off-exchange options trading.
Lock and Get Paid to get Back In
Assuming you are faced with same scenario in the previous example concerning IBM stock. Maybe this time, you are not as confident that IBM will have better than expected numbers which can serve as the impetus for buying pressure on the shares. However, you being the proactive value investor that isn't too concerned with the technicals is willing to buy 100 shares of IBM stock again if it dipped 3.5% from here at roughly $200/share.
I do not have any position in IBM but may initiate one within prior to earnings or within 48 hours after earnings are reported. Good luck trading into the coming earnings season.
All stock and options prices are as of close Friday, October 12, 2012.
The information provided above is for educational purposes only and does not constitute investment advice.
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Twitter: @jgwilson929 and @seeitmarket Facebook: See It Market Please consult with your financial advisor before taking any action.
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