ETF Covered Calls

Wow.  I ran the ETF-Cashinator tonight to see what was happening and the volume on leveraged ETF’s is totally insane.   Wall Street has turned into one giant casino.  Check out the movement of EDZ and over 2x the normal trading volume today at 13 million shares vs average of 6 million!   Almost any leveraged ETF (FAS, FAZ, QID, etc) has had huge increases in volume.   When there seems to be a clear indication that the market is sliding or climbing, investors (i.e gamblers) pounce and load up on these ETFs and options.    I have a sinking feeling in my stomach that this isn’t going to end well and the whole thing will get “ripped” apart under the stress and strain of ups and downs.   It’s no different than a jumbo jet that goes through too many periods of compression and decompression until the fuselage rips open.   Be careful.

ETF Covered Calls website is for educational and entertainment purposes only. Any investment activity is not without risk including loss of principal. Neither this website nor its authors assume any responsibility arising from the use or misuse of any information presented in this blog. You are urged to contact a financial adviser before making any investment decisions. Past performance is no indication of future performance.

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I’ve been keeping an eye on the price of oil and everyone is talking about it but I’m guessing it’s going to crash hard at some point.   The price of natural gas has barely budged and other commodities don’t seem to be surging either so I’m left to believe that there is paper demand and games being played with oil futures.   Unfortunately I’m in-the-money with my OIH options but I’m hoping OIH will stay above $110 so I can cash out.     The only caveat is if a major hurricane blows through the Gulf of Mexico between now and July expiry.   In other news, the US Treasury (10 year) market didn’t do too well today as yields spiked.   I think the Fed is double dipping again so we’re in for some pain…

Keep an eye out and be careful out there….

ETF Covered Calls website is for educational and entertainment purposes only. Any investment activity is not without risk including loss of principal. Neither this website nor its authors assume any responsibility arising from the use or misuse of any information presented in this blog. You are urged to contact a financial adviser before making any investment decisions. Past performance is no indication of future performance.

© ETFCoveredCalls.com

The Dow dropped nearly 300 points and broke below 7000 so I cranked up the ETF-Cashinator for some clues about the markets future.  I was initially happy when I saw that the April calls look like the premium/ratios were returning to more normal levels and was planning to write that we would hit the bottom sometime between now and April but then I looked at the ETF-Putinator and my jaw nearly dropped!   The ETF-Putinator is showing crazy and wild premiums/ratios for every month into the future!    It makes sense that everyone is negatively and massively placing negative bets or buying insurance against further losses.   As a contrarian type investor I actually see this as a positive sign as everyone has piled on to the stern of the ship so it’s time to consider moving toward the bow for some profits.  It is simply concerning that sooo many people have piled to the backside that it may tip the whole thing (market) over once and for all.   Let’s see what happens tomorrow…

ETF Covered Calls website is for educational and entertainment purposes only. Any investment activity is not without risk including loss of principal. Neither this website nor its authors assume any responsibility arising from the use or misuse of any information presented in this blog. You are urged to contact a financial adviser before making any investment decisions. Past performance is no indication of future performance.

© ETFCoveredCalls.com