LunarEclipse said:

Bought 100 shares QID at $55, 100 more at $77, 200 more at $80, wrote 4 call options at 90 strike price two (2) at $1.85/share and two (2) at $4.30/share.  All 400 shares sold (assigned) at $90 strike price 11/23 option expiration.  Profit after commissions = $ 7,980.

Bought 100 shares QID at $74.53 and 200 more at $73.13 this Weds. 11/28.  Not looking to sell calls, the spreads are too big for one thing, and more importantly the premiums will spike if (when?) this market tanks again.  If the market continues up will wait till QID hits support around $60 and buy 200 shares more.  Otherwise, when the market tanks again (it will) I will sell in the $95-100 range. 

I am long a couple hundred shares Alcoa Aluminum (AA) and a couple hundred shares Valero (VLO).  Bought AA recently at $9.66 sold two Jan 10 calls at $1.45 and bought VLO at $30 a while back (OK it seemed cheap at the time) and sold two Dec 17 1/2 calls at $1.84 a week ago.  10+% return in less than a month with downside protection to 15 3/4.

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LunarEclipse said:

Hey Geokills looks like that distribution money you and I will be receiving today from ProShares will be treated as ordinary taxable income and NOT short term capital gains.  Ridiculous and unfair.  What it means is that ProShare can treat what should have been a short term capital loss as an ordinary loss which means they can write off these losses against their own income.  In other words, it's to their benefit and at the expense of their bagholders.  They probably negotiated with the IRS to get this done. What a bunch of scammers. 

http://seekingalpha.com/article/112499-proshares-rydex-cap-gains-payouts-completely-unfair

ProShares, Rydex Cap Gains Payouts Completely Unfair
by: Index Universe December 29, 2008     
Index Universe

By Matthew Hougan

The huge distributions at ProShares and Rydex are a reminder that the old rules on cap-gains distributions must change.

(If you haven't read my articles on the distributions at ProShares and Rydex, they are available here and here.)

Capital gains distributions from mutual funds are inherently unfair. Fund companies pay out a full year's gains on a single day, and the impact on shareholders is almost arbitrary:

If you happen to sell a fund one day before it pays a distribution, you avoid that distribution altogether;
If you happen to buy a fund one day before it pays a distribution, you get hit with the distribution in full.
With traditional mutual funds, this situation is unfortunate but tolerable. The majority of investors hold their mutual funds for many years. Therefore, the majority of shareholders receiving a distribution will have held the fund in question during the period in which the gains accrued.

With the ProShares and Rydex inverse ETFs, however, the situation is completely different. Industry discussions suggest that the average holding period for these ETFs is somewhere around two weeks. Therefore, we can assume that the vast majority of shareholders who got hit with distributions did not hold those ETFs when the gains accrued. That's inherently unfair. The trading-oriented nature of these ETFs means the once-per-year distribution system doesn't work.

The situation is made worse by the fact that short-term capital gains distributions are treated as regular income—and not as short-term capital gains—on tax returns. It sounds like a technical distinction, yet it's anything but. If distributions were treated instead as short-term gains, there wouldn't be a problem: after all, when ETFs make distributions, their share price drops by the amount of the distribution. An investor could therefore sell their ETF, realize the capital loss and offset any distribution that way.

But under current tax law, they cannot offset the distribution in full this way. Investors are allowed to offset $3,000 of regular income with short-term capital losses, but that's the limit. If an investor receives a distribution worth more than $3,000, they will be (unfairly) stuck paying the tax man.

This should be changed. I'm not sure why the Internal Revenue Service decided that short-term capital gains distributions should count as income, and not as what they are: short-term capital gains. Either the rule should be abandoned altogether or some sort of exemption should be made for trading-oriented ETFs.

Immediately.

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Ack, I sold out of my JPM trade from yesterday just a few hours too early.
The stock saw another 12% jump on top of the 11% that I booked.  Of course, I'm
not one to begrudge a profit & will take this lesson to heart as a learning experience.

Edit: Hah, news out after the bell that Diamond (JPM's CEO) has been buying
shares and the stock is almost up to $24 after hours.  That's 19% above where I
sold 50 shares this morning, and 32% above where I purchased 55 shares yesterday.


I also happened upon this excellent article by Daniel Dicker of TheStreet.com. 
Anyone wondering about the fluctuations in the oil and gasoline markets should
take a moment to wade through this one.  It's a little wordy at first, but carries
an informative message for those interested.

Quote:

For the Future of Oil, Look to the Past
By Daniel Dicker
1/21/2009  3:31 pm EST

The same patterns that emerged in the oil markets during their historic move
upward last summer are now just as apparent -- only in reverse. We can make
almost-certain predictions on oil and some related equities, particularly the
refiners, if only by remembering what happened last year and then looking for
perfectly mirrored and opposite actions now. Let me tell you what I mean.

A Brief History

Through the run-up in oil through 2007 and into July 2008, a premium or
backwardation of the oil curve was the norm. Oil on the futures markets is
traded in monthly delivery units, and the prices for those months are not set
collectively. Each month will trade separately and generate its own price. The
differentials between those prices are called spreads.

When the months closer to delivery -- the front months -- are trading at a
premium to the months further out on the curve (the back months), the market
is said to be trading at a premium. The market is then backwardated. This was
almost consistently the case during the bull-market bubble of oil leading to the
high price of $147 we saw in July 2008.

The spot month consistently ran at a premium of a few dollars to the next month
into the curve, and often that premium would continue through the curve. Front
months during the run-up could often carry $6, $7 or even $10 of premium to
the next month forward. What was even more telling was the relative
acceleration of the market at any one time. In other words, the faster that oil
was moving upward during the run up, the greater the premium one saw in the
front months. This is a commonly recognized phenomenon to traders -- it is
known as a squeeze.

Squeezes are historically caused by fundamental demand increases, often
because of short-term supply disruptions. In the case of oil in 2007 and the first
half of 2008, this was not, in my view, fundamentally the case. While there
existed an enormous demand increase for spot market oil contracts, that
demand wasn't driven primarily by supply problems. As people who read the
columns I wrote on this subject in 2008 know, I believe it was caused by
investment demand more than anything else.

The mechanism for traders and how this demand increase would affect trading
is even more interesting. As increased demand for spot month contracts came
in, liquidity providers would have to try to find arbitrage or spread hedges to be
able to sell these contracts to ravenous investors. Invariably, they would buy
back-month contracts to try to offset shorts they were accumulating in the front
contracts. As continued demand for front-month contracts emerged as oil raced
higher, arb traders were forced to cover front months, a condition that
worsened as these months approached expiration, when the "spot squeeze"
would force premiums to ratchet up quickly and without apparent reason. This
also had the side effect of putting unnecessary pressure downward on the
month about to become spot -- it would leave a "rally zone" of a few dollars that
would almost always be made up soon after becoming spot, as traders put self-
imposed floors and tried to cover shorts they created from the spread rolling
they had just completed.

So here's the pattern we saw on the upside -- premium markets as long-term
investor money flows into front months while short-term traders establish long
positions further out on the curve. This would often cause last-minute spot
squeezes and inordinate premiums as contracts expired.

Mirror Image

Let's look at the oil markets today. The perfect opposite is occurring. We now
have huge discount markets, known as a contango condition. As much as the
premium market was fueled by investor appetite, the contango market is being
bullied by investor retreat of capital and an ever-increasing deleveraging of
speculative accounts that were engaged in commodity investment.

As if looking in a mirror, discounts become more and more pronounced as spot
months near expiration, and the month that soon becomes spot is artificially
made strong from spread-rolling. It now leaves a vacuum to sell down to
immediately after becoming spot on the board and creates barriers to a
sustained rally, because the short-term trader is almost invariably long these
front months and stands waiting and hoping for a rally to sell. It is as difficult to
break this cycle on the downside as it was difficult to break the opposite cycle as
the market moved upward.

A Fire for the Refiners

The beneficiaries of this cycle further prove how much oil has become a capital
market, driven more by money flow and trade and less by demand and supply
issues. Crack spreads, a measure of the price of refined products when
compared to the raw crude from which they are manufactured, are proving this
disconnect between fundamentals and price.

During the run-up last year, cracks were continually under pressure as the
crude barrel price outraced the price of refined products. It was hard for
consumers to believe that domestic refiners were going broke with gas at $4.50
a gallon, but it was absolutely true. Cracks during peak summer periods ran at
single digits and often went negative, meaning that the price of gasoline was
trading for less than the price of the crude barrel that was used to create it.

Now that crude prices are under continued pressure from deleveraging, cracks
have shown remarkable recovery from those levels. Cracks for January and
February are now running at around $8.50, a terrific margin for gasoline in the
offseason. In essence, the fundamental relationship between gasoline and crude
oil has been restored with the removal of investor crude appetite. The winter
cracks in 2009 now represent historical "norms" for winter margins. This is a
disconnect we cannot explain otherwise -- it is incredible to see $9 cracks in the
winter while seeing negative summer cracks -- but this is what we have seen in
this tremendous unwinding.

Refiners have been helping this along, taking some advantage of this situation,
and probably not unreasonably so -- they suffered so miserably throughout the
run-up of the last year. In other years, they were able to see $25, $30,
sometimes $40 crack premiums in the summer, but they had to labor with loss
premiums last year. Now seeing an opportunity to recoup some of these
summer losses, they have "helped" the process by slowly decreasing utilization
of refining capacity for the last few months.

Utilization figures have come in from EIA reports in the low to mid-80% range --
the lowest level this country has seen since the early 1990s. And from a retail
level, it is a lot more palatable for the consumer for refiners to "help" along
the "reverse squeeze" the crude market is now experiencing for the benefit of
refinery margins: A $10 dollar margin increase for gasoline translates to
another 25 cents a gallon at the pump, much less noticeable or distasteful when
gas is selling for $1.75 a gallon.

Looking Forward

What might change and break this cycle of downward pressure? Much like the
bubble bursting last year in the summer, we'd need a renewed appetite for oil
exposure to go with an improved fundamental picture -- a difficult scenario to
imagine in the near future. However, the huge capital injections from the Fed
will at some point trump the deflationary spiral we're in and add an inflation wild
card to our mix. We'll see the discounts start to come out of the oil market and
give us an indication of a turnaround back up. Until that happens, the economy
will have to "suffer" with lower oil prices. And the domestic refiners will certainly
be better investments than they were with oil prices on the rise.


--------------------------------------------------------------------------------


Know what you own: Companies that may be affected by the price of crude
include ExxonMobil (XOM) , ConocoPhillips (COP) , BP (BP) , Marathon Oil
(MRO) , Valero (VLO) and Hess (HES) .

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AroundtheSon said:

gold run.

did you see STEM pop? good god.

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AroundtheSon said:

i see what you did there

just a nice pop for those that had waited patiently. Kind of cool for the underdogs you know. I am all up in the gold miners right now. Swinging them bitches when I can.

Up 11% today. but my portfolio still hurts overall due to the "recession". [/quote

You long NEM?