24 Hour Instant Dividends for retirement accounts

Folks, money is all over the place on wall street. No one is picking it.

I know it is fall time, but the stuff laying on the street right now are green dollars.

It is not fall on wall street, it is the beginning of spring!

Enough of this poetic writing, hey me editor of this blog. Now a bit more serious stuff.

Seriously, here is just one of the way you can make good money for your retirement account. I am going to take two examples: The QQQQ (Nasdaq 100 index ETF) and the IWM (russell 2000 Index ETF).

From the top, the 50% discount on each of these two is at around $28 for the QQQQs, and $43 for IWM.

Now if I told you that you can get these two at even lower prices, or you get paid if you do not get them.

If you look at options chains for these two 10 months from now (September 2009), you can get QQQQ and IWM at the following prices:

1. For QQQQ: $(25-2.70) or $22.30.
2. For IWM: $(40-5.20) or $34.80

These are more than 60% discount prices, on major indices.

How to you obtain these prices: Buy QQQQ or IWM, and write a september 2009 call.

Your return on investment will about 13% for the QQQQs, and 16% on IWM. This is assuming you wait until september of 2009, and QQQQ and IWM finish above $25 and $40. If they do not, you will not lose a cent if prices are above your cost basis ($22.30 and $34.80).

Note that you do not need to wait until september to take your gains. If market rally anytime from now to September, you can back back your calls and sell your ETF stocks thus banking your profits.


We call the discount obtained selling the calls, the "instant dividend".

Also note that returns did not include the possible other real dividend payments, which will add even more to the above returns.

Before concluding, we would like to mention that you double the above returns by implementing the above trade using less out of pocket money.

Email us, and we will tell you about the doubling of the above returns.
We can call it, the double dividend!

It is SPRING on Wall Street, not Fall!

Stock market bottom price prediction october 2008 (third visit to the bottom)

After successfully calling the stock market bottom on october 10, october 16, it is now time to call the stock market for a third time:

2:14PM: with NDX at 1187, we are starting to scale in on long side of NDX.

Additions after the market close:

After we posted the above market call, the blogging platform used for this blog was temporarily out of service. Therefore we could not post the completion of the entry, and also the exit.

The exit was done at market close with NDX at 1239. The average entry price was around 1184, therefore, the profits was around 55 NDX points (which is not a small feat especially for only less than two hours of market exposure).

The profits represent 4.5% return on a major market index.

A reader asked if we have exited the long position. You know now the answer.

A question that the reader did however ask, and which we think is important, is the reason why we did take the profits. There are in fact multiple reasons:

1. While we think we are in the area of a market bottom, there is a chance that the market might sell off before a reversal to the upside. However this selloff is not necessary for a rally to emerge.

2. The reversal of the down trend of the last few days should be confirm when price breaks through the high price of the previous day. Tomorrow Friday is imporant to watch. We will see whether the high of Thursday (today october 23, 2008)will be broken. In order for this to be a strong rally (if any), one would want to see a break of yesterday's high during the morning session. There is a reason for this, and we will discuss it another time as such discussion is longer than what we can cover in this post.

3. Now what if the high of previous (today Thursday) is broken tomorrow (Friday). We might still have a retreat to the 1230 to 1240 area sometime in the middle of the morning, before a secong leg of the rally develops towards the end of the afternoon.

4. If the market falls towards the morning, we will be watching the testing of today's bottom. We may re-enter close to the lows of today or soon after the low is broken if any.

In sum, if you look at all scenarios, it was wise to take the profits.

5. The last point we did not discuss now is related to retirement accounts. A retirement account is for longer term and to hedge it it is important to take the profits from the brokerage account which is a short term trading account.

To your profits!

Stock market price prediction: QQQQ, NDX, NQ Trading (Wednesday October 22, 2008)

Stock market price prediction: QQQQ, NDX, NQ Trading (Wednesday October 22, 2008):

We could not report earlier trading for today, and the last few days. It is now 1:40ish, and we may be at a potential end to the down move, or at least a reaction up.

The size we are adopting is half normal size.

1:42PM: with NDX at 1257, we are staring to scale in on the long side (the overall
position will be half the normal size).

3:16pm: WITH NDX at 1234, we are adding the second part of the half normal size long position.

PROFIT TAKING:

3:54PM: with NDX at 1244, we took profit on long position entered at 3:16PM and NDX at 1234.