Rolling the dice on XOM

Another name that reports on Monday 2/1/10 is XOM. Does not look like the market is expecting much. But I decided to buy 20 Feb '10 $70 call contracts for .11. I am risking $220 dollars. Take a look at the price slices below. In the first screen shot I left vol alone and then I adjusted it down by 5%. Historical vol is currently at about 14% and this option is trading with a vol of 19% so an adjustment of 5% would put it in line with historical.

The options market is only pricing in about a 3.8% move based on the front month straddle. This gives XOM an expected range of 62.75-67.70. Like I said this is just a gamble, but if it hits I could win the option lottery so to speak. Every once in a while I like to take these small bets just for fun. Have to fullfill that gambler inside.

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WOW! I think that sums it up

Many of you have been reading this blog may have noticed that my blogging frequency has increased over the past few weeks as I got short the market. As you can imagine I am down money since getting short the market, this is the time when most people pull away from posting. But my goal is to stay active and involved and show you that trading is not always rainbows and butterflies. It is times like these that the things I have been sharing over the past couple of weeks are so important. You need to trade small relative to your account. I have a decent short position in the market and my portfolios are set up to make some awesome returns if we finally turn lower. But something I would like to point out is that my account is 70% Cash. I learned a long time ago how important it is to live by the rules you preach. Because of my discipline I am able to continue to hold my positions, I have time and capital on my side. I can't stress enough how important it is not to get to big....

Stay Small, Stay Out of Trouble

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more good news from FXStreet : Tom Fitzpatrick, senior technical analyst at Citibank in New York. Monday, July 15, 2002 "Parity is a psychological, not a technical level...and whether we pause around parity or not, we are likely to see significant further dollar losses...Our initial target is $1.03 to $1.0450. If that level is taken out, it actually casts a question mark against the whole of the dollar's rally of the last seven years, and could open up a full-blown bear market for the dollar." Julian Jessop, chief European economist at Standard Chartered Bank. Monday, July 15, 2002 "The dollar is under pressure from everything from economic problems to asset reallocation away from the U.S. and corporate accounting problems. It's difficult to see any positive factor for the dollar at the moment. The root of the problem is the U.S. current account deficit. If the U.S. doesn't have to attract an enormous amount of foreign capital, people wouldn't have to wor...

Forex Is Crazy

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