Here is the transcript to this week’s Live Q&A chat. Join me next Wednesday at 2pm EST at https://tradingwithcody.com/chat or send me an email with your question at support@tradingwithcody.com.
What’s up, doc?
Q. Hi Cody. Can you update us on your thoughts on a few of your call option trades? 1. Intel – It wasn’t too long ago that a subscriber asked you to pick just one stock that you felt the strongest about and that was Intel. I’ve got common that has been under water for awhile, and I bought your Dec and Jan calls which were up for awhile and now down quite a bit. How are we sitting with our Intel positions? 2. All but one of my series of Microsoft calls are getting killed. Where do we sit there do you think? 3. Our GDX calls have gone from a double to down 40% or so…what do you expect there? Do you ever cut bait on losing calls? It seems like when you have a loser we simply don’t hear anything about it…like the third VIX tranche recently that basically evaporated, the FIO call.
A. 1. Intel’s gotta get some traction in the mobile world soon or that stock’s going to continue to flounder here. I think it can hit $25 or even $30 if it just gets a hint of growth away from PC and servers. 2. Yes, I mentioned I felt like an idiot after buying those MSFT calls on the Ballmer-exit news. I plan on just holding them steady into year-end as of now, but will certainly let all of you know if I change that. 3. I suggested taking a big chunk of profits on the GDX calls while they were up big and I recently bought some of those GDX calls back. Nothing’s changed with the GDX in my analysis or positioning since then. I make mistakes on some of my calls and trades like everybody else and options trading is especially risky, so it is what it is.
Q. Cody, the rest of my call option post got cut off. What was remaining was that I look to you for when to get into particular calls (and I understand the risk) but I am hoping you could also pull out a yellow flag and a red flag from time to time as also look to you for help on when to cut bait and move on with some capital preservation. Thank you.
A. You have seen me cut bait even on call and put options in the past. It’s an art, not a science.
Q. Cody, do you have a process for placing option orders, for instance if the spread is 2.10 a 2.20 do you put your bid in under the current bid? At the bid? Or somewhere between the B/A or does it just depend on the action of the moment when you place your orders?
A. It depends. It depends on how badly I want in the position and/or whether I’ve already got some exposure to it, etc.
Q. Hi Cody, What are your thoughts on TVIX? With the financial stalemate in congress, volatility in the market is bound to increase. TVIX should be moving off of lows as the uncertainty continues.
A. I think that might be “too obvious” a set up there. I’m not big in the VIX at all right now, but I have recently traded some VIX calls and might do so again soon. Stay tuned.
Q. Cody, what specific aspects of the Scutify app did you find so appealing vs the competition?
A. Scutify aggregates real-time tweets on every stock/commodity/currency and puts it right next to real-time news, videos, blog posts, and other info and analysis for that stock/commodity/currency. I love the ease-of-use of being able to collate the twitter-feeds and the other features so that I don’t have to use more than just one app (and one site) to see all that in one place. I thought from the moment I logged onto it, that Scutify is the perfect collection of information and real-time sentiment and analysis for every trader and investor. StockTwits is good, but doesn’t have the news feeds I want. StockTouch is pretty, but no real-time tweets. Yahoo Finance and CNBC are great for mainstream headlines and quotes and news, but they don’t have nearly the depth and real-time action that Scutify does. W15,000 people have downloaded and used the Scutify iPhone app more than twice in the last two weeks since we took it over. We’ll soon be releasing an Android and iPad app next, by the way. Thanks for asking!
Q. Cody, like we talked about yesterday, none of all-stars or others seem not to respond to questions on WSAS. May be aggravating. Suctify seems to be like twitter format just for posting thoughts.
A. Yes, we’re going to get each of the All-Stars to come back at least once a week for an hour in the old Investor’s Chat Room on WSAS so that you can have instant access to them once again. Obviously with the HUGE success that we’ve instantly found with the Scutify app and site, the model of WSAS has had to morph and so it is. Bear with us, Bill, Scott and I are on the ball and we’re gonna get it right.
Q. Regarding Scutify, it doesn’t look like it covers all stocks. I’ve looked up a couple tickers and there aren’t in there…small cap stocks.
A. It’s in the works. Had no idea that we’d have 10k daily visitors are two weeks of promoting it.
Q. Hello Cody, I have a question regarding the physical gold purchases. Storage is obviously one issue, but what I really don’t see is what I am supposed to do with it in the event of a financial crisis. I find it hard to imagine being able to conveniently buy things like a loaf of bread with a gold coin or ingot. Are you anticipating a new replacement financial structure into which we can deposit our metal hoard? Could you describe in layman’s terms what you foresee happening with the actual coins we purchase in the event of a financial crisis. What do we actually do with them to unlock their value?
A. Since back in the early 1970s when the Republican/Democrat Regime completely removed the value of the dollar from a gold/silver-based backing, they’ve simultaneously coerced every OPEC nation to accept payment for oil in only dollars. In short, that’s why we call it a “reserve currency” or a “petro dollar”. Meanwhile, China and Russia and Brazil and the fringes of the EU are sick to death of having to buy dollars to buy oil and they are actively trying to move to a new “reserve currency” to replace the “petro dollar”. And here in the US, ever since the 2008 bailouts enabled the US markets to be pretty much completely corrupted without punishment, along with the sending of trillions of dollars of unearned and essentially non-existent welfare and handouts to the same banks who cost Russia, the EU, and China hundreds of billions of dollars in mortgage security related scams….well, what we know so far, is that Regime/Fed in the US will do anything they can with the dollar and their power to control that dollar to the detriment of the value of your savings and wealth. The end-game of this is most likely a continuation of the long-term decline and eventual collapse of the US dollar as we currently use it, and that eventually you’ll likely trade some of your gold and silver coins for 10-100x the number of dollars (or whatever currency the US and its citizens are using at that point) than you paid for them and use whatever currency regime(s) have replaced the status quo system.
Q. Hello Cody – Just wanted to give you a big Hoo-Ra for the recent Cree recommendation. I’m up nicely on it.
A. Rock on and congrats for pulling the trigger on the CREE.
Plus one on the CREE pick…great addition to the portfolio!
Q. Hey Cody, I know you said it was a long shot on the bankrupt ECTY, but now down about 50% in the last week, do you have any new feelings on it? Would you suggest riding this one out or adding a little?
Q. Piggybacking on the ECTY question. In my lay experience here, the BK trades with big volume were the winners and the BK trades with low volume like ECTY end up not popping, or at least not within our timeframe. You’ve said in the past that volume wasn’t a very important component. When I brought this one up for consideration, what did you look at to sway you to “go” instead of “pass”? Thanks.
A. Q#1: I think I might nibble on a small second tranche of the ECTY(Q) but it’s a tiny trade and I don’t want to bother with building it up and making it a painful loss. Patience on the BK trade for now. Q#2: You were right I do believe, that there’s been some correlation if not causation between the volume of the BK stock and the price action for a pop.
Q. Seems that the window has moved on the last two BK trades. Rather than making that quick buy in hindsight waiting a week for the buy and a week or two after that for the pop was the better play. I guess we will find out soon and perhaps there is a correlation between volume and the window of opportunity?
A. Yes, see my prior answer. We have to adapt and if these BK trades don’t work right anymore, so be it.
Q. Cody, with Broadcom being beat up lately do you think it might be a good time to get in? They have their earnings announcement later this month and with all the increased iphone sales reports and BRCM being a component thereof I’m wondering if you might see some potential value.
A. The question is whether they’ve had sell-thru into that iPhone bonanza. Inventories in the channel between BRCM and the end unit have been high recently. Would rather be long than short BRCM tho.
Okie dokie then. Peace out and all that harmonious stuff. Catch ya on the flip side.
