Happy New Year!

Hello!

I know I have been so MIA this past month but between finals and the holidays I took a little break. I will begin updating both my blog and twitter more frequently.

Today I will be updating on some market trends.
In the next week or so I will update you with my positions.


I am so glad that Fiscal Cliff is all figured out. In the midst of the new agreement the Fed indicated that they were going to slow down their efforts to stimulate the economy. This sent most broad  indexes in the red for the day.

What do I mean by "slowing down efforts to stimulate the economy"?
When the Fed decides to stop stimulating (injecting more money into the economy by buying bonds) that usually means that consumers and business are only left to each other to buy and sell on the market and a lot of people fear that we are not stable to produce growth.
This information effects the market in more ways than one.
1. Effects economic growth sensitive equities (for example technology)
2. Effects commodities

Commodities: Commodities are gold, crude oil, soybeans, corn and various raw materials.

Why are they effected by the news?
Slowing down the stimulus -> slowing down the economy -> slowing down the use/need of  oil

In one of my previous blogs I mentioned how crude oil will show trends in the market. When there is an idea of the economy slowing down the prices for crude oil are going to drop because there will be less demand (people are pinching their pennies)

But there is in fact a light at the end of the tunnel.

Despite ending in the red zone on Thursday stocks ended higher on Friday.

What happened in those 24 hours?

Unemployment numbers! 155,000 jobs were added and unemployment met most predictions at 7.8%

How do unemployment numbers effect the market?

• When they are lower than predicted that usually means you will see some red at the end of the day, less jobs were added-> less people making money-> slow economy 
• Expectations are met indexes will be in the green. There were the jobs we expected-> expected level of consumers-> expected economy
• Expectations exceed predictions indexes and crude will end in the green. There were MORE jobs-> MORE consumers-> better economy. woohoo! 

Crude oil closed at .2% while Gold closed at -1.5% 

The S & P was the standout index ending with a 5 year high! 

Financial stocks led while tech weren't so lucky.

When looking at different stocks they effect different indexes. Since tech stocks slowed that will effect the NASDAQ which includes mostly tech stocks.

Funny how different two days can be! 

To buy: looking at Google (as always) I know I seem partial but we see good performance from Google however Google is looking a little rich (as in expensive) at these levels, I'll be looking to buy on a pullback (when there is a price drop). Also apple and BP. I'll let you know of any buys!

Let me know if you have any questions!

Brit

November 25th: Where do I start?

Hello Everyone!

Long time no see, I have something special in the works for you guys so please be patient with me :)

I conducted a workshop over the weekend and I got a lot of questions and I wanted to offer answers to whoever is reading! The number one question I received is where do I start?
Here are some of the steps I took. As you know if you have any questions tweet me, comment etc!

1. First make the decision that you want to begin trading. Although this seems like a no-brainer, trading does involve commitment and risks. If you're willing to put in the time you can really learn a lot and do more with your money. Remember a lot of the market is based on people's emotions. As soon as you put a trade into play check your emotions at the door, the market is going to do what it wants. Trade accordingly.
2. Set a trading plan.This is SUPER important. Don't fudge your plan to fit what you want to do. When you've hit your desired profit liquidate. If you've been losing on a position, get out. It's important to set these standards beforehand so you are not trying to figure it at the last minute.
3. Decide how much money you are willing to invest. This should involve a serious look into your finances. This money should come out of discretionary income, not rent/bill/emergency money. There is an opportunity to make money but there is also an opportunity to lose that money as well.
4. Now that you've put some money aside set your targets.This goes for both losing and winning positions.
• What are you willing to risk? Set your risk level at a safe percentage (1%-5%). Meaning if you have $1,000 position and it's down $150 get out and stay out.
• What is your target profit (risk/reward)? How much are you willing to risk in order to make a profit. If you're just going to break even from a trade then what is the point of even doing it? AT LEAST have a 2 to 1 ratio (for every 1 dollar you risk, there is a 2 dollar reward) 
5. Exit and entry strategies.
• Now that your risk level is set be ready to exit a position if it is not performing. You will not always pick a perfect stock and you will be wrong. Don't wishfully think some magic is going to happen. Get out! Write down where you want to get out, discipline yourself to get out. This also goes for profitable positions, once you've hit your mark liquidate. You will never lose taking a profit. It is a horrible feeling when a position is losing because you held on too long. Don't be greedy!
6. Compare online brokerage accounts. If you are going to trade options which is what I mostly talk about in my blog I would suggest Options Xpress, they have pretty good rates. Beyond rates look at their virtual trading system, tutorials for entering positions and options for your mobile device. I haven't looked around recently perhaps I will do a comparison one of these days. 
7. RESEARCH RESEARCH RESEARCH. Watch the news find out what is going on in the world, what is going on in the economy.
8. Pick some stocks that you think are going to grow. I think this is where a lot of people get overwhelmed. The thing that I like about options is that you do not have to pay the price of the stock, which gives you access to companies like Apple and Google. You're deciding on a movement, which makes it a more manageable. PAPER TRADE (or Virtual trade in most cases) Act like your actually trading without using your money. You are the consumer,companies base their success on your purchasing decisions.

Don't be overwhelmed! Be discpilined, have confidence and gain knowledge.

I know this was a wordy post but I got a lot of questions on where/how to start so I wanted to give some details.

Thanks!
Brit


I have attached some pictures from my workshop last week!

October 24th, 2012

Hello!

I have some tips after looking at the market so far this week.

The DOW and S & P have been trending downwards the last couple of days and if you're looking to buy now is the time! Right now the market has been pretty dull, there have been some earning winners but the rumors of Bernake retiring (which would slow down the market)  and Romney's performance on Monday (chances of having a businessman in office) have some investors worried.

What do you do when the markets are flat? Don't get scared or shrug away, BUY!!

One of the fundamentals of trading: Buy low, sell high. You aren't going to be able to buy as much in bullish market.


I've attached the charts for both below to show trends

Buy some gold! The Gold December options (GCZ2) are a buy right now!
When people start to get worried about the stock market they look to gold.

I've attached a chart showing the relationship between the Dow and Gold for the last 3 years.  We notice that when the dow drops gold goes up. What's the dow doing right now...(Going Down) it's just a matter of time before gold reacts.

The price forecast of gold for 2013 has been estimated $2,000 per ounce!




Google: Google is a good company and we've seen solid growth in the last six months. Right now is the time to take advantage of the price drop (anywhere between 675-680). I'm going with some $755 Nov Calls (priced at about .65). Google was able to reach the 750 range at this beginning of this month/ end of September and I think we will see it again.


I'll tweet more buys if I have some.

Let me know if you have any questions or if you have some potential buys.

October 13

I am so sorry! I have been swamped with midterms. But I wanted to give informative post that kind of breaks down the options market.

What is an option?

An option is a derivative instrument based on stocks, commodities, futures etc.

you're probably thinking... What is a derivative instrument?  It is a trading tool that is valued from another security. This means the value of the option moves due to other securities and variables.
 ( from http://www.optiontradingpedia.com/)

Options Quotes

Unlike the stocks you see ticking on the top of your iphone a options price will be listed separately. While the stock price is important factor of an option it is possible for an option to be down while it's stock is up. I have attached a picture of an options chart 
(from Yahoo Finance Options for Google)

I have previously tweeted things like I bought a Sept 115 Goldman call, this mean that from the time I bought the call until it expires I expect the stock to be $115. I bought the option when it was trading around $99. We see here how the stock price plays a roll in the option but isn't the end all be all to the option. 

Research and expiration

Options are speculative, you speculate if the stock will go up or down. It isn't very smart to just go make decisions on stocks without doing the proper research. You can use sites such as marketwatch and cnbc to identify trends, use current events such as earnings. You can also use spreads but that is a little advanced. Make sure you use the information to help gain an edge.

When picking the price of the call you want the option to be "in the money" before it expires. For instance it is possible for Google to trade at $1000.00, but if you're buying an option that expires soon it is very unlikely for it to happen in the given time frame.

With that being said it's important to pay attention to the price you pay or the price you sell the option (bid/ask) the closer you get to being "in the money" the more expensive they will be. If we look at the table from earlier we see that as the strike price increases the price decreases. 

Benefits of Options

Options give you the opportunity to trade highly priced stocks without the capital. (yay for college students) for example: You buy 100 Oct. GOOG Calls, that will cost $300. If you wanted to buy 100 shares of GOOG it would cost $74,400 (woah).
When picking your calls or puts don't just go by the cheapest price, pay attention to the strike and the expiration.

Options also offer some protection, you can only lose the amount that you paid. If we look at the previous example, if GOOG starts to move against you, the loss will be $300 as opposed to $74,400.

They also offer flexibility, you can gain on an option that is gaining or losing. You can also be conservative or risky.

Let me know if you have any questions! I am here to help. I know it's a lot of information but it's important to understand the basics before you start!

Best,Brit

For up to date info follow my twitter

September 9th, 2012

GOLDMAN!

So I haven't had many positions since my last update. I picked up some last minute calls of $GS and just waited and watched! It moved slow but I am so glad I was patient.

I had about 40 $115 September Calls, it was finally "in the money" on Wednesday as it got closer and closer to the 115 price. By Friday this was about a $5,000 trade. Happy Birthday to me!

I've been researching all weekend for some new positions. Check my twitter for my most up to date trades. www.twitter.com/TheBritReport

Thanks!
Brit

August 25th, 2012

Hello!

I'm back! I finished my internship about two weeks ago so I've been spending the last couple of weeks preparing for school. Since my last post I've made a few trades. I will be getting back into the swing of things on monday.

Google
On top of Goldman I dipped back into Google buying a September $705 call for 1.85 selling it at $3.60 realizing a $365 gain.

Goldman
I'm still heavy in Goldman. I've bought about 10 more 115 September calls looking to see some upward movement this week. The stock has climbed since my original buy but still not enough.


Got excess refund?

Earlier this week I tweeted about investing your refund check. I'm not financial planner but I will share that right now interest rates are low. You will barely get any money back placing excess funds into CD or savings account. I would consider an options account. Read up on stocks you like, practice paper/virtual trading and if you have questions tweet me! Options accounts usually just charge a commission and it's a better than just letting your money sit.

Be sure to follow me on twitter for my most up to date trade info @TheBritReport

August 10th, 2012

Hello all!

Let's get to the money!

Ten Year Note

FINALLY the TYU turned in my favor. I had 6 short positions since about the end of July for September expiration. I had an average of 134'410 and liquidated at 133'175.

Here's are the calculation for profit for a short position

Sold Price     Bought      Tics      Tic Value     Profit
134'000     -  133'175 =   17.5  x      31.25    = $546.875
133'270     -  133'175 =   9.5    x      31.25    = $296.875
134'110     -  133'175 =   25.5  x      31.25    = $796.875
135'025     -  133'175 =   49     x      31.25    = $1531.25 * 3 = $4593.75
__________________________________________________________________
Gross Profit                                                                              $6,234.375

AWESOME!

At one point this looked like a loser but I held out and didn't let my emotions take over and now it's $6,200 winner. If you've been following my TYU calls... you're welcome =)

Goldman Sachs

Currently, I have 25 Goldman Sachs (GS) 115 September Calls. I have been extremely bullish. As I stated on twitter a couple weeks ago it only takes some good news to have it shoot up. I am hoping that the news about Goldman not having legal liabilites regarding the subprime mortgages gives the stock a boost today. I need a rally in GS NOW.

 

That's all for now!

Brit