"The idea of the lone genius who has the eureka moment where they suddenly get a great idea that changes the world is not just the exception, but almost nonexistent," says Steven Johnson, author of "Where Good Ideas Come From: The Natural History of Innovation." That's because innovation, whatever the Facebook movie told you, isn't really about individuals. And in making it about individuals, we misunderstand, and thus impede, innovation.
I was not born physically or mentally superior to my grandparents. But I would have been much likelier to invent Facebook than they were. The natural capabilities of human beings don't change much from year to year, but their environments do, and so do the technology and store of knowledge they can access. Better sanitation lets people live in cities, where they can learn from one another. Transportation and communication advances allow ideas to mingle across distances that, a thousand years ago, they would never have traversed. The development of the Internet makes the coding of social networks possible.
When these advances happen, they happen to many people simultaneously, so many people tend to see the next step forward at the same time. In 2003, we were all social network geniuses, at least compared with everyone in 1993.
Consider CU Community, a Facebook competitor started at Columbia University. Adam Goldberg, its creator, programmed his social network over the summer in 2003. It was more advanced than Facebook, with options for pictures and integrated blogging software, though it did lack the elegant minimalism of Zuckerberg's design. (Disclosure: Washington Post Co. Chairman Donald E. Graham is on Facebook's board, and The Post markets itself on Facebook.)
Today, Zuckerberg is many times as rich as Goldberg. He won. Zuckerberg's dominance can be attributed partly to the clean interface of his site, partly to the cachet of the Harvard name and partly to luck. But the difference between Mark Zuckerberg and Adam Goldberg was very small, while the difference between what Mark Zuckerberg could do and what the smartest college kid in 1999 could do was huge. It was the commons supporting them both that really mattered. But the focus on individuals leads us to overinvest in the rewards for individual innovation and underinvest in the intellectual commons that make those innovations possible. We're investing, in other words, in the difference between Zuckerberg and Goldberg rather than the advances that brought them into competition.
Consider the current debates in Congress. Republicans are fighting to add $700 billion to the deficit to extend the Bush tax cuts for income above $250,000. It is hard to imagine the innovations that happen at a 35 percent tax rate for your two-hundred-thousand-and-fifty-first dollar, but not at 39 percent. We're also helping creators and their heirs hold legal monopolies on innovations for much longer, extending individual copyrights to the life of the author plus 70 years, for instance. Would we lose so many great ideas if the monopoly lasted only until 15 years after the inventor's death?
At the same time, the recession has broken the back of state budgets. California is gutting its flagship system of universities. Salaries are dropping, and research money is drying up. And California is not alone. According to the Center on Budget and Policy Priorities, 43 states have cut funding for higher education, while 33 others -- plus the District of Columbia -- have hacked away at K-12. And Congress seems to have given up on the energy and climate bill that could've kick-started our green energy industry -- even as China has committed almost a trillion dollars in green energy funding over the next decade.
And let's not kid ourselves into thinking that public investments don't matter. Direct public investment was crucial for developing a national railroad system, planes and semiconductors. It was behind the Internet and the Global Positioning System. It was behind the educated populace that developed those innovations.
Nor should we be overly sanguine about the private sector's interest in innovation. The average company spends 2.6 percent of its budget on research and development, and a National Science Foundation survey found that only 9 percent of companies reported a product innovation between 2006 and 2008. "You can't be an innovative economy if only 9 percent of your companies are innovating," economist Michael Mandel wrote.
People have many incentives to innovate. They love what they're doing. They're competing with others. They want to make money. They want, as Zuckerberg does in the film, to "make something cool." And they should be richly rewarded for their successes.
But there really isn't a replacement for public investment, and good rules. You need a good education system. You need intellectual-property rules that ensure space for new ideas and uses. You need a tax code that encourages research and development spending. You need, in other words, to furnish people with an environment in which innovation can take place.
We need to think harder about whether we want to spend our limited dollars on the vision of innovation in the Facebook movie or the reality of innovation behind Facebook.
Photo credit: Paul Sakuma/Associated Press
Submitted by Options Trading Signals
Learn How Out-of-the-Money Butterflies Create Profits Trading SPX
Over the past few weeks the broad stock market has seemingly grown
increasingly more bullish. Market pundits, traders, and even high
profile money managers are stating publicly that the easy trade over the
next few years will simply be being long high quality stocks. While
time may prove these managers wise, it is likely a bit early to be that
bullish.
As a trader, our job is to create profits consistently regardless of
price action. The best traders are masters of blocking out the noise and
emotion, and letting various forms of data guide their decision making.
At this point in time the bulls have the bears pushed against key
resistance at the SPX 1150 area. However, the bears have their eyes set
on the 1130 level and from there the key SPX 1040 support area.
If the S&P 500 breaks out over the 1150 area with strong volume
we could move higher to test recent highs; however, if the 1040 area
were to give way to the bears the bullish parade would end. At this
point in time, it is too early to tell which side is going to win this
battle. The monthly chart of SPX tells the entire story.
Until proven otherwise, my bias is to the downside. What might
surprise most readers is the reasoning behind my thinking. My
expectation of lower prices has nothing to do with macro economic
conditions, it has nothing to do with unprecedented intervention that we
have witnessed by the United States federal government, and it has
nothing to do with housing numbers. The reasoning behind potentially
lower prices is simple, defined risk. The SPX chart above and even the
daily chart listed below are both indicative that the SPX 1150 area is a
critical psychological level for market participants. We are literally
at a precipice right here, right now.
When major resistance or support is very near the current spot price
of any underlying, typically low risk/reward setups can be found. After
spinning through several ideas and option strategies, an out of the
money butterfly spread seemingly made a lot of sense. The out of the
money butterfly spread would benefit from the passage of time and would
not be as exposed to a comeuppance in volatility. This strategy could
produce a great potential return for a defined amount of risk.
After some brief analysis, the best proxy was using the Spider ETF
SPY as opposed to the SPX index. The bid/ask spreads are quite wide on
SPX at times, particularly when volatility is rising. Consequently, it
can be arduous to get decent fills from the SPX market makers in rapidly
moving market conditions which seem to be the norm recently. Besides
the normal option expiration on monthly or quarterly basis, options that
expire every week have grown in popularity recently. A primary reason
why volumes have exploded is due to the weekly expirations routine
offering of unbelievable risk/reward setups, particularly through the
utilization of Theta (time) decay trading setups.
After running through various expiration dates, it made since to
utilize the October weekly options that expire on Friday, October 8.
Since I have a bias to the downside, I used an out of the money put
butterfly. Traditional butterflies are typically written where the
current price is straddled by the wings of the butterfly spread. In an
out of the money butterfly, an option trader places the entire position
out of the money. It helps reduce the cost of the butterfly, and because
the option contracts are out of the money, they are not impacted as
harshly by rising volatility. In addition, these out of the money
butterflies usually have very attractive risk/reward characteristics.
SPY was trading around $114.13/share at the close on Thursday, so the
out of the money butterfly I constructed had the following strikes:
Long 1 OCT WKLY. SPY 108 Put / Short 2 OCT WKLY. SPY 111 Puts / Long 1
OCT WKLY. SPY 114 Put. Here is a snapshot of the SPY October weekly
option chain as of the close Thursday:
The Thursday closing option prices are as follows for the butterfly
mentioned above: SPY 108 Put = $18/contract; SPY 111 Put = $37/contract;
SPY 114 Put = $127/contract. The total cost to place the out of the
money SPY weekly put butterfly would have been $71 per side (not
including commissions). The maximum gain at expiration on this trade
would be a close at $111/share on SPY and it would produce a profit
around $225 (not including commission).
Clearly we would not expect to achieve the maximum gain, but this
trade would produce a profit if SPY closed between $108.70/share and
$113.30/share at expiration (October 8). The profitability chart is
below; keep in mind that the red line is the valuation at expiration and
the white line would be the profit based on that particular day.
Obviously market conditions throughout the trading day Friday and
next week will alter the prices and implied volatility of this trade.
This should not be viewed as a trade that should be taken, but an
example of what kind of returns are possible for option traders that
want to use out of the butterflies with a directional bias.
The most exciting thing about a trade like this is that the trader
can crisply define his/her risk. When the maximum risk is a specified
amount, managing risk becomes almost arbitrary. A trader simply
determines how much he/she is willing to risk/lose, and simply places
the trade. A mere $142 risk could produce a potential profit well over
$450! Keep in mind, that should price move within the confines of the
outer strikes (wings) of the butterfly, it might make sense to take
profits depending on the size of a trader’s position. Typically I like
to take profits once price action has produced a gain of 10-20%
depending on market conditions, time frame, and the strategy that I am
using. After taking profits, I typically utilize contingent stop orders
for the remainder of my position and manage it accordingly.
There are additional manipulations that could be made if price looked
like it were going to break below the 108 strike level that would allow
this trade to either remain essentially flat or potentially profit even
more. Additionally, a similar trade using calls could be placed using
the weekly call strikes 115/118/121 for a trader who was bullish.
Regardless of a trader’s directional bias, the beauty of options is not
only their ability to produce setups where risk is clearly defined, but
the potential to manipulate a position in real time allows for
fluctuations in price action or market conditions.
As for the direction of the market, who knows what the next six
trading sessions will bring. Sometimes not trading is the best trade,
but if you absolutely feel you must have some exposure, keep positions
small, risk exposure tight, and do not hesitate to take profits – easier
trades lie ahead.
benchcraft company scam
Mine Coverage Taxes BBC <b>News</b> Budget - NYTimes.com
The BBC will cut back on some of its coverage plans for the rest of the year because of the high cost of covering the mine rescue in Chile.
CNN and Fox <b>News</b> Top Channels for Mine Rescue - NYTimes.com
Ratings for the cable news channels were inflated as the Chilean miners were rescued one by one.
Fox <b>News</b> Ratings HUGE For Final Chilean Miners' Rescue
Fox News saw a staggering 7 million viewers as the final miner was rescued in Chile Wednesday night. The network averaged 7.066 million total viewers in the 8PM hour (when the final miner was rescued) and 4.862 million total viewers in ...
benchcraft company portland or
"The idea of the lone genius who has the eureka moment where they suddenly get a great idea that changes the world is not just the exception, but almost nonexistent," says Steven Johnson, author of "Where Good Ideas Come From: The Natural History of Innovation." That's because innovation, whatever the Facebook movie told you, isn't really about individuals. And in making it about individuals, we misunderstand, and thus impede, innovation.
I was not born physically or mentally superior to my grandparents. But I would have been much likelier to invent Facebook than they were. The natural capabilities of human beings don't change much from year to year, but their environments do, and so do the technology and store of knowledge they can access. Better sanitation lets people live in cities, where they can learn from one another. Transportation and communication advances allow ideas to mingle across distances that, a thousand years ago, they would never have traversed. The development of the Internet makes the coding of social networks possible.
When these advances happen, they happen to many people simultaneously, so many people tend to see the next step forward at the same time. In 2003, we were all social network geniuses, at least compared with everyone in 1993.
Consider CU Community, a Facebook competitor started at Columbia University. Adam Goldberg, its creator, programmed his social network over the summer in 2003. It was more advanced than Facebook, with options for pictures and integrated blogging software, though it did lack the elegant minimalism of Zuckerberg's design. (Disclosure: Washington Post Co. Chairman Donald E. Graham is on Facebook's board, and The Post markets itself on Facebook.)
Today, Zuckerberg is many times as rich as Goldberg. He won. Zuckerberg's dominance can be attributed partly to the clean interface of his site, partly to the cachet of the Harvard name and partly to luck. But the difference between Mark Zuckerberg and Adam Goldberg was very small, while the difference between what Mark Zuckerberg could do and what the smartest college kid in 1999 could do was huge. It was the commons supporting them both that really mattered. But the focus on individuals leads us to overinvest in the rewards for individual innovation and underinvest in the intellectual commons that make those innovations possible. We're investing, in other words, in the difference between Zuckerberg and Goldberg rather than the advances that brought them into competition.
Consider the current debates in Congress. Republicans are fighting to add $700 billion to the deficit to extend the Bush tax cuts for income above $250,000. It is hard to imagine the innovations that happen at a 35 percent tax rate for your two-hundred-thousand-and-fifty-first dollar, but not at 39 percent. We're also helping creators and their heirs hold legal monopolies on innovations for much longer, extending individual copyrights to the life of the author plus 70 years, for instance. Would we lose so many great ideas if the monopoly lasted only until 15 years after the inventor's death?
At the same time, the recession has broken the back of state budgets. California is gutting its flagship system of universities. Salaries are dropping, and research money is drying up. And California is not alone. According to the Center on Budget and Policy Priorities, 43 states have cut funding for higher education, while 33 others -- plus the District of Columbia -- have hacked away at K-12. And Congress seems to have given up on the energy and climate bill that could've kick-started our green energy industry -- even as China has committed almost a trillion dollars in green energy funding over the next decade.
And let's not kid ourselves into thinking that public investments don't matter. Direct public investment was crucial for developing a national railroad system, planes and semiconductors. It was behind the Internet and the Global Positioning System. It was behind the educated populace that developed those innovations.
Nor should we be overly sanguine about the private sector's interest in innovation. The average company spends 2.6 percent of its budget on research and development, and a National Science Foundation survey found that only 9 percent of companies reported a product innovation between 2006 and 2008. "You can't be an innovative economy if only 9 percent of your companies are innovating," economist Michael Mandel wrote.
People have many incentives to innovate. They love what they're doing. They're competing with others. They want to make money. They want, as Zuckerberg does in the film, to "make something cool." And they should be richly rewarded for their successes.
But there really isn't a replacement for public investment, and good rules. You need a good education system. You need intellectual-property rules that ensure space for new ideas and uses. You need a tax code that encourages research and development spending. You need, in other words, to furnish people with an environment in which innovation can take place.
We need to think harder about whether we want to spend our limited dollars on the vision of innovation in the Facebook movie or the reality of innovation behind Facebook.
Photo credit: Paul Sakuma/Associated Press
Submitted by Options Trading Signals
Learn How Out-of-the-Money Butterflies Create Profits Trading SPX
Over the past few weeks the broad stock market has seemingly grown
increasingly more bullish. Market pundits, traders, and even high
profile money managers are stating publicly that the easy trade over the
next few years will simply be being long high quality stocks. While
time may prove these managers wise, it is likely a bit early to be that
bullish.
As a trader, our job is to create profits consistently regardless of
price action. The best traders are masters of blocking out the noise and
emotion, and letting various forms of data guide their decision making.
At this point in time the bulls have the bears pushed against key
resistance at the SPX 1150 area. However, the bears have their eyes set
on the 1130 level and from there the key SPX 1040 support area.
If the S&P 500 breaks out over the 1150 area with strong volume
we could move higher to test recent highs; however, if the 1040 area
were to give way to the bears the bullish parade would end. At this
point in time, it is too early to tell which side is going to win this
battle. The monthly chart of SPX tells the entire story.
Until proven otherwise, my bias is to the downside. What might
surprise most readers is the reasoning behind my thinking. My
expectation of lower prices has nothing to do with macro economic
conditions, it has nothing to do with unprecedented intervention that we
have witnessed by the United States federal government, and it has
nothing to do with housing numbers. The reasoning behind potentially
lower prices is simple, defined risk. The SPX chart above and even the
daily chart listed below are both indicative that the SPX 1150 area is a
critical psychological level for market participants. We are literally
at a precipice right here, right now.
When major resistance or support is very near the current spot price
of any underlying, typically low risk/reward setups can be found. After
spinning through several ideas and option strategies, an out of the
money butterfly spread seemingly made a lot of sense. The out of the
money butterfly spread would benefit from the passage of time and would
not be as exposed to a comeuppance in volatility. This strategy could
produce a great potential return for a defined amount of risk.
After some brief analysis, the best proxy was using the Spider ETF
SPY as opposed to the SPX index. The bid/ask spreads are quite wide on
SPX at times, particularly when volatility is rising. Consequently, it
can be arduous to get decent fills from the SPX market makers in rapidly
moving market conditions which seem to be the norm recently. Besides
the normal option expiration on monthly or quarterly basis, options that
expire every week have grown in popularity recently. A primary reason
why volumes have exploded is due to the weekly expirations routine
offering of unbelievable risk/reward setups, particularly through the
utilization of Theta (time) decay trading setups.
After running through various expiration dates, it made since to
utilize the October weekly options that expire on Friday, October 8.
Since I have a bias to the downside, I used an out of the money put
butterfly. Traditional butterflies are typically written where the
current price is straddled by the wings of the butterfly spread. In an
out of the money butterfly, an option trader places the entire position
out of the money. It helps reduce the cost of the butterfly, and because
the option contracts are out of the money, they are not impacted as
harshly by rising volatility. In addition, these out of the money
butterflies usually have very attractive risk/reward characteristics.
SPY was trading around $114.13/share at the close on Thursday, so the
out of the money butterfly I constructed had the following strikes:
Long 1 OCT WKLY. SPY 108 Put / Short 2 OCT WKLY. SPY 111 Puts / Long 1
OCT WKLY. SPY 114 Put. Here is a snapshot of the SPY October weekly
option chain as of the close Thursday:
The Thursday closing option prices are as follows for the butterfly
mentioned above: SPY 108 Put = $18/contract; SPY 111 Put = $37/contract;
SPY 114 Put = $127/contract. The total cost to place the out of the
money SPY weekly put butterfly would have been $71 per side (not
including commissions). The maximum gain at expiration on this trade
would be a close at $111/share on SPY and it would produce a profit
around $225 (not including commission).
Clearly we would not expect to achieve the maximum gain, but this
trade would produce a profit if SPY closed between $108.70/share and
$113.30/share at expiration (October 8). The profitability chart is
below; keep in mind that the red line is the valuation at expiration and
the white line would be the profit based on that particular day.
Obviously market conditions throughout the trading day Friday and
next week will alter the prices and implied volatility of this trade.
This should not be viewed as a trade that should be taken, but an
example of what kind of returns are possible for option traders that
want to use out of the butterflies with a directional bias.
The most exciting thing about a trade like this is that the trader
can crisply define his/her risk. When the maximum risk is a specified
amount, managing risk becomes almost arbitrary. A trader simply
determines how much he/she is willing to risk/lose, and simply places
the trade. A mere $142 risk could produce a potential profit well over
$450! Keep in mind, that should price move within the confines of the
outer strikes (wings) of the butterfly, it might make sense to take
profits depending on the size of a trader’s position. Typically I like
to take profits once price action has produced a gain of 10-20%
depending on market conditions, time frame, and the strategy that I am
using. After taking profits, I typically utilize contingent stop orders
for the remainder of my position and manage it accordingly.
There are additional manipulations that could be made if price looked
like it were going to break below the 108 strike level that would allow
this trade to either remain essentially flat or potentially profit even
more. Additionally, a similar trade using calls could be placed using
the weekly call strikes 115/118/121 for a trader who was bullish.
Regardless of a trader’s directional bias, the beauty of options is not
only their ability to produce setups where risk is clearly defined, but
the potential to manipulate a position in real time allows for
fluctuations in price action or market conditions.
As for the direction of the market, who knows what the next six
trading sessions will bring. Sometimes not trading is the best trade,
but if you absolutely feel you must have some exposure, keep positions
small, risk exposure tight, and do not hesitate to take profits – easier
trades lie ahead.
bench craft company reviews
Mine Coverage Taxes BBC <b>News</b> Budget - NYTimes.com
The BBC will cut back on some of its coverage plans for the rest of the year because of the high cost of covering the mine rescue in Chile.
CNN and Fox <b>News</b> Top Channels for Mine Rescue - NYTimes.com
Ratings for the cable news channels were inflated as the Chilean miners were rescued one by one.
Fox <b>News</b> Ratings HUGE For Final Chilean Miners' Rescue
Fox News saw a staggering 7 million viewers as the final miner was rescued in Chile Wednesday night. The network averaged 7.066 million total viewers in the 8PM hour (when the final miner was rescued) and 4.862 million total viewers in ...
bench craft company reviews
benchcraft company portland or
benchcraft company portland or
Mine Coverage Taxes BBC <b>News</b> Budget - NYTimes.com
The BBC will cut back on some of its coverage plans for the rest of the year because of the high cost of covering the mine rescue in Chile.
CNN and Fox <b>News</b> Top Channels for Mine Rescue - NYTimes.com
Ratings for the cable news channels were inflated as the Chilean miners were rescued one by one.
Fox <b>News</b> Ratings HUGE For Final Chilean Miners' Rescue
Fox News saw a staggering 7 million viewers as the final miner was rescued in Chile Wednesday night. The network averaged 7.066 million total viewers in the 8PM hour (when the final miner was rescued) and 4.862 million total viewers in ...
bench craft company reviews
"The idea of the lone genius who has the eureka moment where they suddenly get a great idea that changes the world is not just the exception, but almost nonexistent," says Steven Johnson, author of "Where Good Ideas Come From: The Natural History of Innovation." That's because innovation, whatever the Facebook movie told you, isn't really about individuals. And in making it about individuals, we misunderstand, and thus impede, innovation.
I was not born physically or mentally superior to my grandparents. But I would have been much likelier to invent Facebook than they were. The natural capabilities of human beings don't change much from year to year, but their environments do, and so do the technology and store of knowledge they can access. Better sanitation lets people live in cities, where they can learn from one another. Transportation and communication advances allow ideas to mingle across distances that, a thousand years ago, they would never have traversed. The development of the Internet makes the coding of social networks possible.
When these advances happen, they happen to many people simultaneously, so many people tend to see the next step forward at the same time. In 2003, we were all social network geniuses, at least compared with everyone in 1993.
Consider CU Community, a Facebook competitor started at Columbia University. Adam Goldberg, its creator, programmed his social network over the summer in 2003. It was more advanced than Facebook, with options for pictures and integrated blogging software, though it did lack the elegant minimalism of Zuckerberg's design. (Disclosure: Washington Post Co. Chairman Donald E. Graham is on Facebook's board, and The Post markets itself on Facebook.)
Today, Zuckerberg is many times as rich as Goldberg. He won. Zuckerberg's dominance can be attributed partly to the clean interface of his site, partly to the cachet of the Harvard name and partly to luck. But the difference between Mark Zuckerberg and Adam Goldberg was very small, while the difference between what Mark Zuckerberg could do and what the smartest college kid in 1999 could do was huge. It was the commons supporting them both that really mattered. But the focus on individuals leads us to overinvest in the rewards for individual innovation and underinvest in the intellectual commons that make those innovations possible. We're investing, in other words, in the difference between Zuckerberg and Goldberg rather than the advances that brought them into competition.
Consider the current debates in Congress. Republicans are fighting to add $700 billion to the deficit to extend the Bush tax cuts for income above $250,000. It is hard to imagine the innovations that happen at a 35 percent tax rate for your two-hundred-thousand-and-fifty-first dollar, but not at 39 percent. We're also helping creators and their heirs hold legal monopolies on innovations for much longer, extending individual copyrights to the life of the author plus 70 years, for instance. Would we lose so many great ideas if the monopoly lasted only until 15 years after the inventor's death?
At the same time, the recession has broken the back of state budgets. California is gutting its flagship system of universities. Salaries are dropping, and research money is drying up. And California is not alone. According to the Center on Budget and Policy Priorities, 43 states have cut funding for higher education, while 33 others -- plus the District of Columbia -- have hacked away at K-12. And Congress seems to have given up on the energy and climate bill that could've kick-started our green energy industry -- even as China has committed almost a trillion dollars in green energy funding over the next decade.
And let's not kid ourselves into thinking that public investments don't matter. Direct public investment was crucial for developing a national railroad system, planes and semiconductors. It was behind the Internet and the Global Positioning System. It was behind the educated populace that developed those innovations.
Nor should we be overly sanguine about the private sector's interest in innovation. The average company spends 2.6 percent of its budget on research and development, and a National Science Foundation survey found that only 9 percent of companies reported a product innovation between 2006 and 2008. "You can't be an innovative economy if only 9 percent of your companies are innovating," economist Michael Mandel wrote.
People have many incentives to innovate. They love what they're doing. They're competing with others. They want to make money. They want, as Zuckerberg does in the film, to "make something cool." And they should be richly rewarded for their successes.
But there really isn't a replacement for public investment, and good rules. You need a good education system. You need intellectual-property rules that ensure space for new ideas and uses. You need a tax code that encourages research and development spending. You need, in other words, to furnish people with an environment in which innovation can take place.
We need to think harder about whether we want to spend our limited dollars on the vision of innovation in the Facebook movie or the reality of innovation behind Facebook.
Photo credit: Paul Sakuma/Associated Press
Submitted by Options Trading Signals
Learn How Out-of-the-Money Butterflies Create Profits Trading SPX
Over the past few weeks the broad stock market has seemingly grown
increasingly more bullish. Market pundits, traders, and even high
profile money managers are stating publicly that the easy trade over the
next few years will simply be being long high quality stocks. While
time may prove these managers wise, it is likely a bit early to be that
bullish.
As a trader, our job is to create profits consistently regardless of
price action. The best traders are masters of blocking out the noise and
emotion, and letting various forms of data guide their decision making.
At this point in time the bulls have the bears pushed against key
resistance at the SPX 1150 area. However, the bears have their eyes set
on the 1130 level and from there the key SPX 1040 support area.
If the S&P 500 breaks out over the 1150 area with strong volume
we could move higher to test recent highs; however, if the 1040 area
were to give way to the bears the bullish parade would end. At this
point in time, it is too early to tell which side is going to win this
battle. The monthly chart of SPX tells the entire story.
Until proven otherwise, my bias is to the downside. What might
surprise most readers is the reasoning behind my thinking. My
expectation of lower prices has nothing to do with macro economic
conditions, it has nothing to do with unprecedented intervention that we
have witnessed by the United States federal government, and it has
nothing to do with housing numbers. The reasoning behind potentially
lower prices is simple, defined risk. The SPX chart above and even the
daily chart listed below are both indicative that the SPX 1150 area is a
critical psychological level for market participants. We are literally
at a precipice right here, right now.
When major resistance or support is very near the current spot price
of any underlying, typically low risk/reward setups can be found. After
spinning through several ideas and option strategies, an out of the
money butterfly spread seemingly made a lot of sense. The out of the
money butterfly spread would benefit from the passage of time and would
not be as exposed to a comeuppance in volatility. This strategy could
produce a great potential return for a defined amount of risk.
After some brief analysis, the best proxy was using the Spider ETF
SPY as opposed to the SPX index. The bid/ask spreads are quite wide on
SPX at times, particularly when volatility is rising. Consequently, it
can be arduous to get decent fills from the SPX market makers in rapidly
moving market conditions which seem to be the norm recently. Besides
the normal option expiration on monthly or quarterly basis, options that
expire every week have grown in popularity recently. A primary reason
why volumes have exploded is due to the weekly expirations routine
offering of unbelievable risk/reward setups, particularly through the
utilization of Theta (time) decay trading setups.
After running through various expiration dates, it made since to
utilize the October weekly options that expire on Friday, October 8.
Since I have a bias to the downside, I used an out of the money put
butterfly. Traditional butterflies are typically written where the
current price is straddled by the wings of the butterfly spread. In an
out of the money butterfly, an option trader places the entire position
out of the money. It helps reduce the cost of the butterfly, and because
the option contracts are out of the money, they are not impacted as
harshly by rising volatility. In addition, these out of the money
butterflies usually have very attractive risk/reward characteristics.
SPY was trading around $114.13/share at the close on Thursday, so the
out of the money butterfly I constructed had the following strikes:
Long 1 OCT WKLY. SPY 108 Put / Short 2 OCT WKLY. SPY 111 Puts / Long 1
OCT WKLY. SPY 114 Put. Here is a snapshot of the SPY October weekly
option chain as of the close Thursday:
The Thursday closing option prices are as follows for the butterfly
mentioned above: SPY 108 Put = $18/contract; SPY 111 Put = $37/contract;
SPY 114 Put = $127/contract. The total cost to place the out of the
money SPY weekly put butterfly would have been $71 per side (not
including commissions). The maximum gain at expiration on this trade
would be a close at $111/share on SPY and it would produce a profit
around $225 (not including commission).
Clearly we would not expect to achieve the maximum gain, but this
trade would produce a profit if SPY closed between $108.70/share and
$113.30/share at expiration (October 8). The profitability chart is
below; keep in mind that the red line is the valuation at expiration and
the white line would be the profit based on that particular day.
Obviously market conditions throughout the trading day Friday and
next week will alter the prices and implied volatility of this trade.
This should not be viewed as a trade that should be taken, but an
example of what kind of returns are possible for option traders that
want to use out of the butterflies with a directional bias.
The most exciting thing about a trade like this is that the trader
can crisply define his/her risk. When the maximum risk is a specified
amount, managing risk becomes almost arbitrary. A trader simply
determines how much he/she is willing to risk/lose, and simply places
the trade. A mere $142 risk could produce a potential profit well over
$450! Keep in mind, that should price move within the confines of the
outer strikes (wings) of the butterfly, it might make sense to take
profits depending on the size of a trader’s position. Typically I like
to take profits once price action has produced a gain of 10-20%
depending on market conditions, time frame, and the strategy that I am
using. After taking profits, I typically utilize contingent stop orders
for the remainder of my position and manage it accordingly.
There are additional manipulations that could be made if price looked
like it were going to break below the 108 strike level that would allow
this trade to either remain essentially flat or potentially profit even
more. Additionally, a similar trade using calls could be placed using
the weekly call strikes 115/118/121 for a trader who was bullish.
Regardless of a trader’s directional bias, the beauty of options is not
only their ability to produce setups where risk is clearly defined, but
the potential to manipulate a position in real time allows for
fluctuations in price action or market conditions.
As for the direction of the market, who knows what the next six
trading sessions will bring. Sometimes not trading is the best trade,
but if you absolutely feel you must have some exposure, keep positions
small, risk exposure tight, and do not hesitate to take profits – easier
trades lie ahead.
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Mine Coverage Taxes BBC <b>News</b> Budget - NYTimes.com
The BBC will cut back on some of its coverage plans for the rest of the year because of the high cost of covering the mine rescue in Chile.
CNN and Fox <b>News</b> Top Channels for Mine Rescue - NYTimes.com
Ratings for the cable news channels were inflated as the Chilean miners were rescued one by one.
Fox <b>News</b> Ratings HUGE For Final Chilean Miners' Rescue
Fox News saw a staggering 7 million viewers as the final miner was rescued in Chile Wednesday night. The network averaged 7.066 million total viewers in the 8PM hour (when the final miner was rescued) and 4.862 million total viewers in ...
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Mine Coverage Taxes BBC <b>News</b> Budget - NYTimes.com
The BBC will cut back on some of its coverage plans for the rest of the year because of the high cost of covering the mine rescue in Chile.
CNN and Fox <b>News</b> Top Channels for Mine Rescue - NYTimes.com
Ratings for the cable news channels were inflated as the Chilean miners were rescued one by one.
Fox <b>News</b> Ratings HUGE For Final Chilean Miners' Rescue
Fox News saw a staggering 7 million viewers as the final miner was rescued in Chile Wednesday night. The network averaged 7.066 million total viewers in the 8PM hour (when the final miner was rescued) and 4.862 million total viewers in ...
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Mine Coverage Taxes BBC <b>News</b> Budget - NYTimes.com
The BBC will cut back on some of its coverage plans for the rest of the year because of the high cost of covering the mine rescue in Chile.
CNN and Fox <b>News</b> Top Channels for Mine Rescue - NYTimes.com
Ratings for the cable news channels were inflated as the Chilean miners were rescued one by one.
Fox <b>News</b> Ratings HUGE For Final Chilean Miners' Rescue
Fox News saw a staggering 7 million viewers as the final miner was rescued in Chile Wednesday night. The network averaged 7.066 million total viewers in the 8PM hour (when the final miner was rescued) and 4.862 million total viewers in ...
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Mine Coverage Taxes BBC <b>News</b> Budget - NYTimes.com
The BBC will cut back on some of its coverage plans for the rest of the year because of the high cost of covering the mine rescue in Chile.
CNN and Fox <b>News</b> Top Channels for Mine Rescue - NYTimes.com
Ratings for the cable news channels were inflated as the Chilean miners were rescued one by one.
Fox <b>News</b> Ratings HUGE For Final Chilean Miners' Rescue
Fox News saw a staggering 7 million viewers as the final miner was rescued in Chile Wednesday night. The network averaged 7.066 million total viewers in the 8PM hour (when the final miner was rescued) and 4.862 million total viewers in ...
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Mine Coverage Taxes BBC <b>News</b> Budget - NYTimes.com
The BBC will cut back on some of its coverage plans for the rest of the year because of the high cost of covering the mine rescue in Chile.
CNN and Fox <b>News</b> Top Channels for Mine Rescue - NYTimes.com
Ratings for the cable news channels were inflated as the Chilean miners were rescued one by one.
Fox <b>News</b> Ratings HUGE For Final Chilean Miners' Rescue
Fox News saw a staggering 7 million viewers as the final miner was rescued in Chile Wednesday night. The network averaged 7.066 million total viewers in the 8PM hour (when the final miner was rescued) and 4.862 million total viewers in ...
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Since I've written for both Google News outlets -- Examiner.com and AssociatedContent.com -- I have the unique perspective of a writer who has made money with both outlets, and thus thought it would be interesting to compare the experiences.
I began writing for AssociatedContent.com way back in August 31, 2006 -- when my very first article published (10 Legitimate Ways Stay-at-Home Moms Can Make Their Own Money) appeared on AC, as we like to call the site for short.
Nearly four years later, that piece has received 60,582 views and still brings in a few bucks per month in ad revenue.
In September 2009, I began writing for Examiner.com.
Yahoo's Purchase of Associated Content
With Yahoo reportedly paying anywhere from $90 million - $100 million for Associated Content earlier this year -- the site is poised for continued future success, ramping up to be one of the major players in content creation.
So how will this deal affect writer's pay on the down end?
How Much Have AssociatedContent.com and Examiner.com paid me?
To date, my total payments from AC have totaled $6,349.70 -- and to be fair, I don't write nearly as often for Associated Content as I do for Examiner.
Examiner.com payments have surpassed $25k in less than one year.
The issue may be due to...
Getting in Google News
Both Associated Content and Examiner are listed in Google News -- and typing "site:associatedcontent.com" into Google returns about 29,000,000 results, while typing "site:associatedcontent.com" into Google News returns about 868 as of this writing.
Typing "site:examiner.com" into Google returns about 13,600,000 results -- but typing "site:examiner.com" into Google News returns about 12,900 results as of this writing.
What that tells me is Examiner.com articles are saturated throughout Google News, and with Examiner planning to ramp up to 85,000 writers on their site by the end of 2010, I can see why they recently celebrated their 1,000,000th article.
Examiner.com gets some articles that have been published into Google News within minutes -- that's if they are approved.
Looks like Associated Content gets some articles in Google News pretty fast, too, just doing a quick view of the topical stuff that has been published today.
The Publishing Process
Publishing on Examiner and Associated Content are kind of similar, with both offering a place for writers who write their copy in Word or Notepad or wherever an opportunity to to paste the text into an area that "scrubs" the text clean.
And so is the linking process.
While Associated Content has a photo gallery to choose from, Examiner.com pays for images from Associated Press and Getty Images for writers to use alongside their articles.
With both sites, writers can use free photo options -- but PicApp.com photo code can be easily dropped into articles in Examiner, who gives their writers access to dropping in code as needed.
Both have minimum article needs, with Examiner's minimum around 200 or more whereas AC's is 400 and above.
Keeping up with both content creation websites makes an interesting comparison of how much money writers can make with both sites.
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Mine Coverage Taxes BBC <b>News</b> Budget - NYTimes.com
The BBC will cut back on some of its coverage plans for the rest of the year because of the high cost of covering the mine rescue in Chile.
CNN and Fox <b>News</b> Top Channels for Mine Rescue - NYTimes.com
Ratings for the cable news channels were inflated as the Chilean miners were rescued one by one.
Fox <b>News</b> Ratings HUGE For Final Chilean Miners' Rescue
Fox News saw a staggering 7 million viewers as the final miner was rescued in Chile Wednesday night. The network averaged 7.066 million total viewers in the 8PM hour (when the final miner was rescued) and 4.862 million total viewers in ...
big seminar 14
Mine Coverage Taxes BBC <b>News</b> Budget - NYTimes.com
The BBC will cut back on some of its coverage plans for the rest of the year because of the high cost of covering the mine rescue in Chile.
CNN and Fox <b>News</b> Top Channels for Mine Rescue - NYTimes.com
Ratings for the cable news channels were inflated as the Chilean miners were rescued one by one.
Fox <b>News</b> Ratings HUGE For Final Chilean Miners' Rescue
Fox News saw a staggering 7 million viewers as the final miner was rescued in Chile Wednesday night. The network averaged 7.066 million total viewers in the 8PM hour (when the final miner was rescued) and 4.862 million total viewers in ...
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