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Bernard L. Madoff

Options Trading

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Needs its own thread.

I just reactivated my OptionsXpress account which accesses US Markets (Options, Stocks and Futures) because I'm noticing that Australian markets are poor liquidity and 40-1000% above fair value.

Why does it cost 42% ($14.95) of the brokerage to trade a US market than it does Aussie thru Commsec ($34.95)?

http://www.optionsxpress.com.au/pricing_and_commissions/

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Needs its own thread.

I just reactivated my OptionsXpress account which accesses US Markets (Options, Stocks and Futures) because I'm noticing that Australian markets are poor liquidity and 40-1000% above fair value.

Why does it cost 42% ($14.95) of the brokerage to trade a US market than it does Aussie thru Commsec ($34.95)?

http://www.optionsxpress.com.au/pricing_and_commissions/

It's different here... ;)

Good idea on this having it's own thread.

Do you think the 40 to 1000% above fair value is because of a larger commission for the party who writes up the option? The horse has bolted on buying puts on US banks I imagine?

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Why don't we have no win no pay services here?

As its name implies, MarketNeutralOptions is an advisory service site specializing in options trading. It focuses on the Iron Condor and Double Diagonal options trading strategies and tracks and provides trade recommendations on the exchange traded funds (ETF). It is the only option advisory service outfit that we know of which makes the bulk of its income based on the performance of its advice.

The total fee includes a yearly subscription sign-up cost of $25 plus a cost of $1 per 1% gain in profits from recommended trades. In addition, the fee on profits is capped at $50 for any trading month. So whether a trader realizes a 50% profit gain from one, two or an unlimited number of trades within one month, he/she only pays a maximum of $50 for those recommendations.

The site also offers a free 30-day trial membership along with two free educational ebooks to its subscribers, with a value of $190:

"Introduction to the Greeks in Options Trading" and

"Understanding and Profiting from Iron Condor and Double Diagonal"

Visit the stock advisory site for additional information:

http://www.marketneutraloptions.com

Tradeself provides stock picks, penny stock picks, and stock alerts for day traders and swing traders. The site maintains a 74% accuracy rate in picking winning stocks and its portfolio reflects an average gain of 900% per year since 2002. The Tradeself membership fee can be as low as $22 per month based on an annual subscription or you can subscribe on a monthly basis with the monthly rate of $30. For a typical stock recommendation, Tradeself provides justification through technical analysis, allows its members to access all of the charting analysis results online via its membership website and provides specific entry and exit prices for each recommendation. There is a one week trial membership available to anyone who is interested in getting a better feel of how the company operates.

http://www.optionsoutlet.org/products/tradeself.HTML

http://www.trade.newsmonster.org/reports/advisory_services.html

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The horse has bolted on buying puts on US banks I imagine?

Yeah. Only Australia stands to fall.

I was thinking regular end of day trading for FAIR VALUE. I think the overpricing is the lack of volume (illiquidity).

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Yeah. Only Australia stands to fall.

I was thinking regular end of day trading for FAIR VALUE. I think the overpricing is the lack of volume (illiquidity).

The Aussie ETO market was never as deep as the US one to begin with and I think some of the option writers have taken an extended vacation after the GFC. Volumes which were never very high to begin with have decreased since then.

Fewer people in the ETO market, more illiquidity.

Nothing you can do about it except to play the game and accept that frustration in getting a fair price is likely to be the norm rather than the exception.

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Suncorp Metway (ASX: SUN), a known major (including flood) Insurer in QLD and a major lender has <$500M in contingency cash.

I put out some Put option feeler buys and stump me (Brad Haddin wouldn't) but they were instant fills at fair value.

SUNMX8 Sep 29th 2011 expiry $7.75 strikes filled at $0.470 ($0.435 fair).

SUNEF8 Jun 23rd 2011 expiry $7.50 strikes filled at $0.250 ($0.250 fair).

:phone1:

:clap:

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Suncorp Metway (ASX: SUN), a known major (including flood) Insurer in QLD and a major lender has <$500M in contingency cash.

I put out some Put option feeler buys and stump me (Brad Haddin wouldn't) but they were instant fills at fair value.

SUNMX8 Sep 29th 2011 expiry $7.75 strikes filled at $0.470 ($0.435 fair).

SUNEF8 Jun 23rd 2011 expiry $7.50 strikes filled at $0.250 ($0.250 fair).

:phone1:

:clap:

I just bought SUNUB7 Dec 22nd 2011 expiry $7.50 strikes filled at $0.465 ($0.515 fair). Thats almost a 10% discount to fair!!! :thumbsup::punk:

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Suncorp is Australia's 5th largest Bank and Largest General insurer. OMG. :shocking:

Suncorp-Metway also owns the GIO, AAMI, Apia, Just Car Insurance, Shannons, InsureMyRide, Vero, Asteron and Tyndall insurance brands in Australia, and Vero, Asteron, Guardian Trust, Tyndall, Vero Marine, Vero Liability, AA Insurance, SIS, CMV/AXIOM, Mariner, Comprehensive Travel Insurance and Autosure brands in New Zealand.

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Suncorp is Australia's 5th largest Bank and Largest General insurer. OMG. :shocking:

And remember, TP, at the start of the GFC, they were chasing capital.

I can only hope they have used the last two years wisely, and cleaned up their balance sheet.

With the torrent of claims they are going to receive from the floods, they could have a struggle accessing money.

Are they large enough to cause a shiver in the Big 4?

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And remember, TP, at the start of the GFC, they were chasing capital.

I can only hope they have used the last two years wisely, and cleaned up their balance sheet.

With the torrent of claims they are going to receive from the floods, they could have a struggle accessing money.

Are they large enough to cause a shiver in the Big 4?

Domino effect?

As we have been mentioning since the floods hit Australia, our expectation would be for the banks, especially the Queensland based ones, to take a big hit from bad loans.

Today we note that Goldman Sachs has done some numbers.

The Queensland floods crisis could put nearly $5 billion worth of mortgages and commercial loans at risk of default, as the financial fallout mounts from the worst natural disaster in the state in nearly three decades.

A new report from Goldman Sachs has found there could be defaults on $4.1bn worth of home loans, which equates to 16,500 homes, in the state's southeast.

It was also estimated that 2950 commercial loans, worth $737 million, could be in trouble.

The estimates come amid grim forecasts that property prices in Brisbane's riverside suburbs could plummet by up to 50 per cent after the floods. The expected falls are also likely to put increased pressure on rents across the city.

Goldman Sachs banking analyst Ben Koo said preliminary research showed that up to 67 per cent of houses and business damaged in the floods last week had no insurance or flood coverage.

It was estimated that about 20 per cent of the houses that were fully inundated and had no insurance would default on their loans. The banks would lose about 10 per cent of the outstanding loan value on those mortgages.

Again we have to ask what the effect will be on capital requirements when the banks also "prudently" revalue their securitised properties in these areas, including the ones that were not directly effected by the flooding.

And while the banks are "prudently" re-adjusting their own LVTs , and "experts" are estimating that property values in some areas have suddenly fallen by 50%, we would have to ask again if a couple of those little-known clauses in home loans contracts are about to come and bite the indebted; even when they think they have been saved from the floods.

Section 2. - 3.5 Value of the security.

The value of and title to the Security Property must be to our reasonable satisfaction at all times during the term of the Contract. We may obtain a new valuation of any security property.

and

Section 9.0 Default

You are in default of under the Contract if any of the following conditions apply;

...

c) Value or title unsatisfactory : We are reasonable satisfied with the value of/or title to the security property or the security over it will be inadequate security for our Loan in accordance with our usual prudent credit standards.

At this point in time it would obviously be a public relations nightmare for the banks to be enforcing these contracts. But in 6 months time, when the floods are becoming a distant memory, we just wonder whether people in these flooded areas will suddenly get a surprising letter from their bank, on top of the one from their insurer

http://delusionaleconomics.blogspot.com/2011/01/gs-loan-default-estimations-couple-of.html

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