DRYS Options Plays

[netwrangler]

Dry Ships Inc., [DRYS] is a marvelously volatile stock that presents an idyllic playground for the option trader.
The Beta is 2.89 according to Google Finance
The Historic Volatility is ~70%, according to Peter Hoadley's software.

This volatility is far too high for the more conservative covered call trader.
That said, and with an average volume of 5.62m and a PE of 5.81, it's hard to imagine a better candidate for option trading.
Here is a chart to work from:

3337

I'm going to do 'something' here before the June 21st expiry.
I hope others will join me.

[zozozo333]

Dry Ships Inc., [DRYS] is a marvelously volatile stock that presents an idyllic playground for the option trader.
The Beta is 2.89 according to Google Finance
The Historic Volatility is ~70%, according to Peter Hoadley's software.

This volatility is far too high for the more conservative covered call trader.
That said, and with an average volume of 5.62m and a PE of 5.81, it's hard to imagine a better candidate for option trading.
Here is a chart to work from:

I'm going to do 'something' here before the June 21st expiry.
I hope others will join me.

So are you hoping it'll bounce off the resistance/support level? I'm still relatively new to options, so that chart says to me calls sound good. With my luck though, I should choose the opposite 8O.

[Riddicks]

This stock is def volatile and even though it has its support around $88-$90, its resistance right now is at $95-$96, you can make some money day trading this stock but I am new to options also. I would love to know what you guys think.

Me I am personally thinking of June $105 calls and if it gets to $110-$115, I would def get some puts on this baby.

[netwrangler]

....
So, are higher premium calls usually only on Volatile stocks (Beta>1+)?? Is a high Premium expressing more than just confidence in the stock going past the strike price, such as Volatility or Risk/Reward???

The premium of a call can be separated into two parts:

The 'intrinsic value' is the amount that the strike price is below the PPS of the underlying stock.
The 'time value' is the rest of it. [NOTE: If the strike price is above the PPS of the underlying stock, then the entire premium is considered to be 'time value'.]

The time value is determined by several factors:

The volatility of the stock - as you suggested, the higher the volatility, the higher the premium. This is not an expression of faith, but simply probability theory in action. If the stock bounced around a lot in the past, it is reasonable to expect it to bounce around a lot in the future.
The difference between the PPS of the underlying stock and the strike price - The time value of a call tends to be at its maximum at-the-money — that is, when the PPS and the strike price are the same.
The time left to expiry - the more time that is left, the higher the time value.
Other factors - anticipated news about the stock, the sector, or the economy can skew the premium value. Some investors look for this kind of skew as a tip-off that 'something is afoot'.


And given these factors:
As the stock approaches SP, two pressures occur. Time pushing it down, and the bouyancy of the stock. Past the SP it Bob's up!

Well, time is certainly eroding the value of the call. As for the buoyancy of the stock, that [as the lawyers say] assumes a fact not in evidence. The stock may or may not be buoyant. That's more dependent on fundamentals and current news.

There is a behavior called 'pinning', however, which occurs near expiry. Pinning describes the tendency of the PPS to be closer to a strike price at expiry than would be expected by chance. Note however:

That is 'a' strike price, not necessarily the one you have in mind;
'Closer than expected by chance' is a relative term. You could be talking $0.25 closer here.
It could be above or below the strike price. Indeed, studies show that it tends of oscillate around the strike price.

This last behavior is particularly vexing to a covered call holder trying to determine whether or not the CC position will be assigned. :y:

[netwrangler]

So are you hoping it'll bounce off the resistance/support level? I'm still relatively new to options, so that chart says to me calls sound good. With my luck though, I should choose the opposite 8O.

This stock is def volatile and even though it has its support around $88-$90, its resistance right now is at $95-$96, you can make some money day trading this stock but I am new to options also. I would love to know what you guys think.

Me I am personally thinking of June $105 calls and if it gets to $110-$115, I would def get some puts on this baby.
I'm really not sure how this will go, which is why I posted it.
Keventerprises called this stock to my attention.
I think it is a good candidate for trading - both now and in the future.

I'm going to do some Fundy analysis to see if that helps 'set the scene' here.
In the meantime, I'm hoping some of the option and/or chart experts will post their thoughts.

[Rich]

Wow Net, this is honestly beyond me! I thought you were just a common folk like myself, next I'm going to see 'Esquire' in front of your name!!

I've JUST started reading about options, and according to the book and what WSE told me months ago, its actually a safer haven than owning stock if you play things correctly.

I'll read this thread you started again in about a month and hope it makes sense then.

I wonder how many people here are as confused about options as I am.

Rich

[aiki14]

While I realize this is not a strategy for most people, I am selling the Jun 90 puts. Yesterday was a better day for it, but today was ok, and tomorrow will be as well.

[wallstreetsedge]

good post net, the insane volatility coan mae this stock swing either way... 70 or 140.. who knows lol

i gave it some thought, and weighed some pros and cons... it couldnt make a recent low and it still trades under fair value which is around the 130 range. to play this one i would either...

play using the 200 sma as my safe guard and buy the 80 calls 13.90/14.20 and short the 90's for 6.80/7.00... you end up protecting yourself for about 50% and a max reward of about 20%

or

play the delta and buy the 85 for 10/10.20 and short the 95 4.20, protecting yourself at about 40% and max profit of about 40%

[netwrangler]

I know I posted I would do some 'fundy' analysis on DRYS.
But I also said [in the chat room] that I would check out Schwab's chart analysis capability.
I did the latter first, and came up with a find.

Bottom line:
If you had followed an ARSI14/Price-cross strategy with DRYS for the last 6 months, you would have doubled your money.
This is especially significant since the entry PPS, last December, was $89.03 and the closing price today was $93.09.
So much for "a rising tide lifts all ships."
This is a total victory for the trading strategy!
No, I wasn't in the stock in December. This is a back-test. [Wudda/cudda/shudda]

Here is the six month chart:

3339

The strategy is simple:

When the price crosses the Adaptive RSI on the way up, you buy.
When the price crosses the Adaptive RSI on the way down, you go short.
At each cross, you close the prior position.

The test assumed a $10,000 stake.
Each trade is for 100 shares.
The bottom line [last column] on the trade table is profit.
You still have your $10,000.
Here is the [back-test] trade history:

3340

Holy Guacamole! That is really great performance! This was a swing/channel trader's dream!

So [cooler heads prevail] what happens next?

Two obvious alternatives are:

short now and ride the stock down to the next ARSI14/Price cross
wait until the next ARSI14/Price cross and go long.

Going beyond the this one test, the obvious questions are:

Will this strategy work again?
Well, I'll bet on the champion.
You only lose once.


Will this strategy work with other stocks?
I think that's a Fundy question.
What was it that made DRYS get into those long up and down swings?
Other stocks that behave like that might well work with this strategy.
Sounds like something to scan for.

Well, I still need to do some Fundy research.
This could be fun.

[netwrangler]

uhh, the obvious question is:
What is a swing trading analysis doing in the middle of the options forum?
I suggest that if you can figure out the swing trading pattern of a stock, your option trade decisions will be a lot simpler to make, and a lot more profitable.

It's like, "Well, if you know the stock is going up/down, there are lots of ways to make money."

[netwrangler]

I wonder how many people here are as confused about options as I am.

Rich
My guess is, "There are far more who are confused than will admit it. There are even more who don't even realize how confused they are."

Kudos to you for being up front about being confused.

If it is of any comfort, I qualified as 'totally confused' as recently as two years ago.
I still qualify as 'confused' on some of the advanced option plays.

Options involve moving targets.
They also involve math, including statistics.
That's usually enough to lose more than 90% of the audience.

But for those who hang in there, it's a trip!

[Riddicks]

The question from me is where do you get the ARSI from netwrangler? and chart program can I get it from? Is this just a normal RSI 14 number?

[netwrangler]

The question from me is where do you get the ARSI from netwrangler? and chart program can I get it from? Is this just a normal RSI 14 number?
I was testing the Schwab charting and analysis software.
The ARSI/Price-cross is a strategy included in that software.
The specific software is StreetSmartPro.
It is available for free to 'traders' at Schwab.

That said, I'll try to find a 'second source'.
Or maybe someone will post one.

Sorry I don't know more. This is something I found [and shared] today.

[Riddicks]

Sorry, meant to say which chart program do I get it from.

[netwrangler]

Sorry, meant to say which chart program do I get it from.Did our posts cross?

[Riddicks]

That's fine sir. I use E Trade and Quest Trader up here and they don't have ARSI overlays. But would RSI 14 indicator, work just as well if it were over 50 and under 50 every time it crosses over?

[Riddicks]

Yup, thank you once again.

[netwrangler]

That's fine sir. I use E Trade and Quest Trader up here and they don't have ARSI overlays. But would RSI 14 indicator, work just as well if it were over 50 and under 50 every time it crosses over?
That didn't seem to work when I tried it in StockCharts.com.
I just eyeballed the results, but the 50 crosses and the buy/sell signals did not line up as far as I could tell.

[netwrangler]

And for those of you staying up late to get the latest in mathematical input...

Here is the formula for the Adaptive RSI 'study' used above:

3341

So [as the math profs say] it is intuitively obvious that the adaptive RSI 'study' massages a standard version of the RSI and then uses it as a smoothing constant to calculate a variation of a moving average.

For the number-dummies amongst us [and yes, I count myself as one] take a look at how an SMA and EMA are calculated. The ARSI is just another approach to modifying the SMA.

What this suggests, of course, is that I need to back-test various SMAs and EMAs to establish that the ARSI is actually a better indicator.

I'm really going to hate it if an SMA20/Price-cross produces better results.

[Riddicks]

This is great stuff. I wonder how many more stocks are out there that have the volatility of DRYS and move along the ARSI as it does.

Thanks wrangler...

[peter518]

Playing such short term options (only 2 weeks to expire) requires a lot of time and trading skills. Therefore I would buy Dec/08 or Jan/09 calls when it establishes a solid bottom. The chart annexed here indicates that DRYS is still in the down trend.

Another quality maritime shipping company is EXM
EXCEL MARITIME CARRIERS LTD - http://www.excelmaritime.com (http://www.excelmaritime.com/)http://www.stockwatch.com/images/spacer.gif

Cheers!

Peter

http://www.stockwatch.com/images/spacer.gifU - U:DRYS - DRYSHIPS INC - 1 year | 3 year (http://www.stockwatch.com/swnet/charts/charts_histori.aspx?action=go&time=3&style=bar&period=d&divisions=20&symbol=U:DRYS&region=U) | 5 year (http://www.stockwatch.com/swnet/charts/charts_histori.aspx?action=go&time=5&style=bar&period=d&divisions=20&symbol=U:DRYS&region=U) Exponential Moving Avg (10) __ Exponential Moving Avg (50) __ Exponential Moving Avg (100) __http://www.stockwatch.com/swnet/charts/charts_histproc.aspx?symbol=U:DRYS&region=U&ind1=vol&ind2=MACD&ind3=RSI&ind1p1=12&ind1p2=25&ind1p3=50&ind2p1=12&ind2p2=26&ind2p3=9&ind3p1=14&ind3p2=25&ind3p3=50&ptype=candle&pov1=mae&pov2=mae&pov3=mae&pov1p1=10&pov1p2=&pov2p1=50&pov2p2=&pov3p1=100&pov3p2=&d1=20070607&d2=20080606&per=d&npdivs=20&width=830&priceheight=400&indheight=100&log=F
Just the Image for Printing (http://www.stockwatch.com/swnet/charts/charts_histproc.aspx?symbol=U:DRYS&region=U&ind1=vol&ind2=MACD&ind3=RSI&ind1p1=12&ind1p2=25&ind1p3=50&ind2p1=12&ind2p2=26&ind2p3=9&ind3p1=14&ind3p2=25&ind3p3=50&ptype=candle&pov1=mae&pov2=mae&pov3=mae&pov1p1=10&pov1p2=&pov2p1=50&pov2p2=&pov3p1=100&pov3p2=&d1=20070607&d2=20080606&per=d&npdivs=20&width=830&priceheight=400&indheight=100&log=F)

Dry Ships Inc., [DRYS] is a marvelously volatile stock that presents an idyllic playground for the option trader.
The Beta is 2.89 according to Google Finance
The Historic Volatility is ~70%, according to Peter Hoadley's software.

This volatility is far too high for the more conservative covered call trader.
That said, and with an average volume of 5.62m and a PE of 5.81, it's hard to imagine a better candidate for option trading.
Here is a chart to work from:

3337

I'm going to do 'something' here before the June 21st expiry.
I hope others will join me.

[Riddicks]

So is this the bottom for DRYS? I think its pretty darn close and this thing moves well with the overall market. Talking to Kev earlier, I think the July calls were looking really good today and they might look good on Monday too.

What do you guys say? July calls at $100, $105, and $115? Are they at good value now?

[netwrangler]

So is this the bottom for DRYS? I think its pretty darn close and this thing moves well with the overall market. Talking to Kev earlier, I think the July calls were looking really good today and they might look good on Monday too.

What do you guys say? July calls at $100, $105, and $115? Are they at good value now?So far, the ARSI indicator called a good short on 5/20 when the price was $104. I'll stay with the short view until the ASRI crosses the price again.

So my view works great with Kevins plan to sell nekked calls.

As for DRYS moving well with the overall market, I guess you could say that. It has amplified the market moves since last December. If you think the market is headed up, then buying calls make sense.

The 20-day Historic Volatility sits at 75 - relatively high for an average stock, but not that high for DRYS. Still, buying a straddle and betting on DRYS moving one way of the other might be the best play. [Since my sentiments are towards 'short', I prefer being long puts rather than calls here.]

I'll be working on this over the weekend.

[wallstreetsedge]

i think theyre good buys, not if you bought them today bc youre losing 2 days and imo it pulls down $1-2 before rebounding... the only way i would have said to buy them today was if you were creating a spread.. but even in creating a spread going int o a weekend, i would go in the money by 1-2 strikes

if yorue willing to wait till monday for a sign, then going out the money to maybe the 100's would be a good risk:reward

[netwrangler]

For the folks who aren't really sure what DRYS does [and I was one of those folks until very recently], here's a summary from Google Finance:

DryShips Inc. (DryShips) is a holding company that, through its subsidiaries, is engaged in the ocean transportation services of drybulk cargoes worldwide through the ownership and operation of the drybulk carrier vessels. As of December 31, 2007, the Company owned and operated a fleet of 38 vessels and eight new buildings consisting of nine Capesize drybulk carriers (including four new building Capesize drybulk carriers), 33 Panamax drybulk carriers (including two new building Panamax drybulk carriers), two new building Kamsarmax drybulk carriers and two Supramax drybulk carriers. Its fleet carries a variety of drybulk commodities, including major bulks, such as coal, iron ore and grains, and minor bulks, such as bauxite, phosphate, fertilizers and steel products. In addition to its owned fleet, DryShips has also chartered-in a Panamax drybulk carrier for a period of three years ending in December 2008. As of April 25, 2008, the Company had acquired a 66.6% interest in Ocean Rig ASA.
I had not known that DRYS is the majority stock holder of Ocean Rig ASA.
In my view, that introduces another factor into the fundamental analysis of the company.

[Riddicks]

By June 11th, 2008 that controlling interest in Ocean Rigs should be 75% including the voting power.

This is very significant as OCR operates in offshore drilling for Oil and Gas industry. They are mainly marketed to companies for exploration and drilling programs worldwide, especially for Deep water drilling and tougher environments.

I hope that helps.

[netwrangler]

I told Riddicks that I would do the DD required this weekend to become an expert in the Dry-Bulk Shipping sector.

Well, that may have been a little ambitious. :?
How's about that I have achieved a basic level of expertise, and it's only Saturday?

The DRYS web-site has a link to a 'sponsored report' from Barron's.
I figure a 'sponsored report' on the company's web site has to be favorable to the Dry-Bulk Shipping sector, and it is.
At the same time, I figure that any report the Barron's is willing sign their name to has to contain some worthwhile information, and it does.

Here is a link to the report. (http://www.capitallink.com/press/BarronsArticleOct192006.pdf)

I read the report [13 pages] and believe that it does provide a good 'intro' to the world of dry-bulk shipping.
Moreover, you get a real feel for how the shipping business and global trade economics relate. I hadn't expected to learn about that.

The good news is that this is a 2006 report. You can see if their forecasts were accurate.
The bad news is that this is a 2006 report. If you want forecasts for 2009, you will need to find a different source.

Still, this is good stuff. It's worth a read.

[Keventerprises]

While I realize this is not a strategy for most people, I am selling the Jun 90 puts. Yesterday was a better day for it, but today was ok, and tomorrow will be as well.

Good idea, Aiki. I'm watching seeling Puts intently, but as yet have not actually done that. The worst that would most likely happen is that you would be forced to buy someone's DRYS shares at $90, or your selected Strike Price below that, and then your true cost that you're protected down to is that minus your Premium collected?

Did you sell Jun $85 Puts for $2.00+? Protected to $83? Good observation! DRYS jumps out at me when these high premiums present themselves, yet I'm being cautious about Naked Puts, but I'd feel comfortable owning shares for 83+, or even Jun 90's minus $4=$86. Am I in the Ballpark?

[Keventerprises]

For the folks who aren't really sure what DRYS does [and I was one of those folks until very recently], here's a summary from Google Finance:

DryShips Inc. (DryShips) is a holding company that, through its subsidiaries, is engaged in the ocean transportation services of drybulk cargoes worldwide through the ownership and operation of the drybulk carrier vessels. As of December 31, 2007, the Company owned and operated a fleet of 38 vessels and eight new buildings consisting of nine Capesize drybulk carriers (including four new building Capesize drybulk carriers), 33 Panamax drybulk carriers (including two new building Panamax drybulk carriers), two new building Kamsarmax drybulk carriers and two Supramax drybulk carriers. Its fleet carries a variety of drybulk commodities, including major bulks, such as coal, iron ore and grains, and minor bulks, such as bauxite, phosphate, fertilizers and steel products. In addition to its owned fleet, DryShips has also chartered-in a Panamax drybulk carrier for a period of three years ending in December 2008. As of April 25, 2008, the Company had acquired a 66.6% interest in Ocean Rig ASA.
I had not known that DRYS is the majority stock holder of Ocean Rig ASA.
In my view, that introduces another factor into the fundamental analysis of the company.

Great job Net! I'm sorry that I missed these posts. I've been studying options intently and managing work on the new house. I'm glad that I was finally able to help you and hopefully others with this recommendation. I feel DRYS has good support at $90, and added more to average down my cost and then continue to do so later with selling covered options. Thanks for the Due Diligence! I'm glad that you found it interesting.

[netwrangler]

DRYS has posted the slides and audio from an April 24, 2008 conference call dealing with their Ultra Deep Water Drilling strategy, including the acquisition of Ocean Rig.

Here is a link to that conference call. (http://www.irwebpage.com/dryships/webcast2/webcast_2008-Apr.html)

They ask you for ID before you can access the call, but it is free.
I found the information interesting.

[aiki14]

Good idea, Aiki. I'm watching seeling Puts intently, but as yet have not actually done that. The worst that would most likely happen is that you would be forced to buy someone's DRYS shares at $90, or your selected Strike Price below that, and then your true cost that you're protected down to is that minus your Premium collected?

Did you sell Jun $85 Puts for $2.00+? Protected to $83? Good observation! DRYS jumps out at me when these high premiums present themselves, yet I'm being cautious about Naked Puts, but I'd feel comfortable owning shares for 83+, or even Jun 90's minus $4=$86. Am I in the Ballpark?

The Jun 90's for 4, and looking at the asian oil market right now we should get a pull back that brings the shares up a couple bucks.

[Keventerprises]

By the time I had made up my mind, DRYS had dipped more than it should have, so I sold the Jun 85 Puts (DQRRQ) for 3.30 (at a PPS of 86.82), so it's protected down to 83.52 (Cost), which I feel there is very little chance of it going that low in two weeks, and I'd be comfortable owning them at that anyway with the exception of a catastrophe...We should change the motto of the competing Arab Oil (Wet) ships to, "Put your ships in Uranus."

:captain:

BTW, Solars are following Oil up and down, and so is Gold and Silver. PAL is holding O.K. though. I sold 100 contracts of PAL (PALIU) for October 7.50 Calls for $1.00. Kev's Nekked! Actually I'm covered on that one but sold SWC and kept the October 15 SWCJC Calls I sold. :bath: :fight: Where's that, LucRunt1?

[peter518]

See...

The risk you took...

If you simply bought DRYS put, you might have made money.

Cheers!

Peter

=====

1 Year Chart for DQRRQhttp://www.stockwatch.com/images/red_arrow.gifJust the Image For Printing (http://www.stockwatch.com/swnet/charts/charts_histproc.aspx?symbol=DQRRQ&region=U)
http://www.stockwatch.com/swnet/charts/charts_histproc.aspx?symbol=DQRRQ&region=U

By the time I had made up my mind, DRYS had dipped more than it should have, so I sold the Jun 85 Puts (DQRRQ) for 3.30 (at a PPS of 86.82), so it's protected down to 83.52 (Cost), which I feel there is very little chance of it going that low in two weeks, and I'd be comfortable owning them at that anyway with the exception of a catastrophe...We should change the motto of the competing Arab Oil (Wet) ships to, "Put your ships in Uranus."

:captain:

BTW, Solars are following Oil up and down, and so is Gold and Silver. PAL is holding O.K. though. I sold 100 contracts of PAL (PALIU) for October 7.50 Calls for $1.00. Kev's Nekked! Actually I'm covered on that one but sold SWC and kept the October 15 SWCJC Calls I sold. :bath: :fight: Where's that, LucRunt1?

[aiki14]

Well that did not go my way, had to buy the puts to close the position, down $2+ per contract for 20 contracts. Couple tough days this week.

[Keventerprises]

Well that did not go my way, had to buy the puts to close the position, down $2+ per contract for 20 contracts. Couple tough days this week.

You did the right thing for Damage Control. It's going to get worse on Friday. Your Puts may not have gotten exercised, but you did the right thing. Buy Shares or Calls cheap on Monday.

[Keventerprises]

See...

The risk you took...

If you simply bought DRYS put, you might have made money.

Cheers!

Peter

=====

1 Year Chart for DQRRQhttp://www.stockwatch.com/images/red_arrow.gifJust the Image For Printing (http://www.stockwatch.com/swnet/charts/charts_histproc.aspx?symbol=DQRRQ&region=U)
http://www.stockwatch.com/swnet/charts/charts_histproc.aspx?symbol=DQRRQ&region=U

My hind sight is 20/20 too. I'm trying to develop 100/20 Foresight, with Bi-Focals.

[Keventerprises]

They've already dropped since noticing this, but why would anyone buy a DRYS Dec 80 Call now for 18.40? If I had sold that, wouldn't I effectively be selling my current shares for $100, and be glad to see them get exercised soon?

[netwrangler]

They've already dropped since noticing this, but why would anyone buy a DRYS Dec 80 Call now for 18.40? If I had sold that, wouldn't I effectively be selling my current shares for $100, and be glad to see them get exercised soon?
Well, you would be effectively selling your current shares for 98.40, but whose counting?
Assuming an pps basis of $85 going in, you are looking at ~15% for a six-month hold — not bad at all in a market where the DOW is down ~7% YTD.

But don't look for the buyer of that call to exercise early.
As long as there is time value left in the call, it is almost always better for the holder of a call to sell the call and buy the stock in the open market rather than exercise the call early.

So the deep in-the-money call is one way to play a covered call on a volatile stock. But figure you are going to be in that position for six-months, or you are going to make less than $98.40.

[Keventerprises]

Well, you would be effectively selling your current shares for 98.40, but whose counting?
Assuming an pps basis of $85 going in, you are looking at ~15% for a six-month hold — not bad at all in a market where the DOW is down ~7% YTD.

But don't look for the buyer of that call to exercise early.
As long as there is time value left in the call, it is almost always better for the holder of a call to sell the call and buy the stock in the open market rather than exercise the call early.

So the deep in-the-money call is one way to play a covered call on a volatile stock. But figure you are going to be in that position for six-months, or you are going to make less than $98.40.

Hi Net,
Aiki used the term Risk Tolerance. Would you or him please discuss Risk Management? I sold 2 contracts for DRYS Jun 80 Calls, and they're barely not getting exercised at 77.50. I held off on doing a Rolldown, but it's been 'exciting'. What is an effective protection strategy that works either way, such as the double duty plays that you've mentioned, put/call spread, straddle or Iron Condor? Without buying back my Puts, if I bought Calls down low, they could go lower. What is the best downside protection? Even selling Calls on the VIX could go up, although buying Puts on the VIX cheap looks good.

Going out further on selling options looks like it takes out the temporary low swings, but could be a rookie move if stocks and calls come back up. Aiki also used the phrase, "Could get messy."

Thank you always!

[wallstreetsedge]

i just plugged this into my charts and saw how oversold it is.. any plans for a quick upside trade? can even think about using a spread on it

[peter518]

I find that DRYS Sept 95C and 105C have abnormal volumes today, and 100C also had 3241 contracts traded yesterday. The net buy-to-open volume for DQRIT was 1812 yesterday. There are also abnormal activities in Jan '09 90C and 110C today. Do these activities indicate big institutions have jumped in to grab the good opportunity for a big gain later?

Any comments?

Cheers!

Peter

================================================== ====

Sept 2008
95.00 (http://finance.yahoo.com/q/op?s=DRYS&k=95.000000)DQRIS.X (http://finance.yahoo.com/q?s=DQRIS.X)4.20http://us.i1.yimg.com/us.yimg.com/i/us/fi/03rd/down_r.gif 1.704.004.204,1741,526100.00 (http://finance.yahoo.com/q/op?s=DRYS&k=100.000000)DQRIT.X (http://finance.yahoo.com/q?s=DQRIT.X)3.30http://us.i1.yimg.com/us.yimg.com/i/us/fi/03rd/down_r.gif 1.503.103.303655,993105.00 (http://finance.yahoo.com/q/op?s=DRYS&k=105.000000)DQRIA.X (http://finance.yahoo.com/q?s=DQRIA.X)2.63http://us.i1.yimg.com/us.yimg.com/i/us/fi/03rd/down_r.gif 1.372.402.654,1051,408
Jan 2009
90.00 (http://finance.yahoo.com/q/op?s=DRYS&k=90.000000)ZDUAR.X (http://finance.yahoo.com/q?s=ZDUAR.X)9.10http://us.i1.yimg.com/us.yimg.com/i/us/fi/03rd/down_r.gif 3.409.009.602,1286,75295.00 (http://finance.yahoo.com/q/op?s=DRYS&k=95.000000)ZDUAS.X (http://finance.yahoo.com/q?s=ZDUAS.X)8.05http://us.i1.yimg.com/us.yimg.com/i/us/fi/03rd/down_r.gif 2.557.808.3012639100.00 (http://finance.yahoo.com/q/op?s=DRYS&k=100.000000)ZDUAT.X (http://finance.yahoo.com/q?s=ZDUAT.X)7.10http://us.i1.yimg.com/us.yimg.com/i/us/fi/03rd/down_r.gif 2.206.707.20592,520105.00 (http://finance.yahoo.com/q/op?s=DRYS&k=105.000000)ZDUAA.X (http://finance.yahoo.com/q?s=ZDUAA.X)6.00http://us.i1.yimg.com/us.yimg.com/i/us/fi/03rd/down_r.gif 2.205.806.306171,078110.00 (http://finance.yahoo.com/q/op?s=DRYS&k=110.000000)ZDUAB.X (http://finance.yahoo.com/q?s=ZDUAB.X)5.10http://us.i1.yimg.com/us.yimg.com/i/us/fi/03rd/down_r.gif 2.285.005.401,8181,128


http://www.stockwatch.com/swnet/charts/charts_histproc.aspx?symbol=DQRIT&region=U

[Riddicks]

I don't know much about options, but I do know that this stock is in a free fall right now. The BDI index dropped today the most it has in a long time (6 Months?). China, because of their backlog at their ports and their inventory of supplies, they aren't importing as much right now, although, that back log will be finished in 3-4 weeks and we should start seeing the order quantities back up. Also the Charter price for the Capesize ships has dropped quite a bit, even though DRYS has only a couple of those and mainly their ships are Panama size, this still effected them.

All of this together is hurting this stock, and it could go even further. I keep moving my support point. To start it was $88, $82, $78, $70.50 and now $65. But maybe the funds or the big boys know something and they know that when this stock takes off, it will move fast, so just make sure you are ready.

It could be this or it could be that nobody likes this stock and nobody wants to invest even a penny in to this. Who knows?

[Keventerprises]

i just plugged this into my charts and saw how oversold it is.. any plans for a quick upside trade? can even think about using a spread on it

That's what I'm thinking too. With this volatile of a stock, would we use a Credit Spread, or Straddle? Buy Calls 2 Strikes up, and sell Puts one Strike down? Like that? Sell 70 Puts for $1.50 and Buy 85-90 Calls cheap ($.30 and $.10, respectively), and then sell the Calls before next Friday if they've gone up?

[Keventerprises]

I find that DRYS Sept 95C and 105C have abnormal volumes today, and 100C also had 3241 contracts traded yesterday. The net buy-to-open volume for DQRIT was 1812 yesterday. There are also abnormal activities in Jan '09 90C and 110C today. Do these activities indicate big institutions have jumped in to grab the good opportunity for a big gain later?

Any comments?

Cheers!

Peter

It seemed like alot of interest in future value to me also that Jan Bids were so high on Calls. They have come down with the share price a bit though (as a percentage). They were at 22.5% of the PPS for Jan Calls 2-3 Strikes out. I would buy Calls on this one, rather than sell them, unless it's farther out. Maybe farther out will bring a better premium and trade the options along the way.

[wallstreetsedge]

ive been thinking, why not play an arbitrage on drys?

[netwrangler]

ive been thinking, why not play an arbitrage on drys?
What a great idea? [Where's my sarcastic emoticon? Well, this will have to do.] :y:

Arbitrage is a transaction with an assured gain.
So, what was the "arbitrage" transaction you had in mind?
You don't say ... the implication being that you can see it, and we are dunces if we can't.
But the truth is that there is no "arbitrage" opportunity here.

This is a junk post, wse. You are capable of much better than this.

[wallstreetsedge]

ill post it in a separate post on how to create an arbitrage along with an example.. also i meant to say "play"... not played

[netwrangler]

ill post it in a separate post on how to create an arbitrage along with an example.. also i meant to say "play"... not played
If you want to change 'play' to 'played' don't bother.

I have to tell ya, I can post some really great trades to make after the fact.

[Keventerprises]

From my basic knowledge and instincts of options, to gain downside protection, what about in addition to selling 70 Puts for $1.50, also buying 65 Puts for $.50, plus buying 80 Calls for $.90? Without commission, this has a net income of .10. I call it a Credit Saddle. What do you really think? If it moves early in the coming week, sell out of the other one before values go down near expiration. I still have 100 uncovered shares to play with. What do you really think?

[netwrangler]

From my basic knowledge and instincts of options, to gain downside protection, what about in addition to selling 70 Puts for $1.50, also buying 65 Puts for $.50, plus buying 80 Calls for $.90? Without commission, this has a net income of .10. I call it a Credit Saddle. What do you really think? If it moves early in the coming week, sell out of the other one before values go down near expiration. I still have 100 uncovered shares to play with. What do you really think?
Kev, the basic question is, "What do you see happening with the PPS for DRYS stock?"
It's pretty hard to evaluate an options play without a scenario for the underlying security.

I still rate DRYS as a short, although my conviction for that rating is decreasing.
The stock will turn around.
It's just a question of when.

Because DRYS has such a history of long swings, I'd rather wait until the upswing is clear than try to predict the turn.

[Keventerprises]

From my basic knowledge and instincts of options, to gain downside protection, what about in addition to selling 70 Puts for $1.50, also buying 65 Puts for $.50, plus buying 80 Calls for $.90? Without commission, this has a net income of .10. I call it a Credit Saddle. What do you really think? If it moves early in the coming week, sell out of the other one before values go down near expiration. I still have 100 uncovered shares to play with. What do you really think?

p.s. The downside pays for the upside.

[Keventerprises]

p.s. The downside pays for the upside.

2 down, 1 up seems safe. 60-90?

[netwrangler]

From my basic knowledge and instincts of options, to gain downside protection, what about in addition to selling 70 Puts for $1.50, also buying 65 Puts for $.50, plus buying 80 Calls for $.90? Without commission, this has a net income of .10. I call it a Credit Saddle. What do you really think? If it moves early in the coming week, sell out of the other one before values go down near expiration. I still have 100 uncovered shares to play with. What do you really think?
Hey Kev,

Here are a couple of looks at your 'Credit Saddle' position:

The first takes your selection of options and tests the return from buying 10 contracts of each. So:

Sell 10 JUN70 puts @ $1.50
Buy 10 JUN65 puts @ $0.50
Buy 10 JUN80 calls @ $0.95

The payout graph looks like this:

3392

You only make $50 on the position premiums with this analysis because the position analyzer wants to buy the calls at the ask price, not the bid. I didn't override the price so the analyses from the position analyzer would be consistent. Go ahead and add $50 to the return if you want.

This position is protected down to a pps of $70. Don't see that helping protect any underlying stock much. Only protection is the $50 (or $100) you make on the premiums initially. Note also, you have to wait until the pps goes above $80 to make any real bucks.

Max loss is ~$5,000, and that kicks in at a pps of $65. Max profit is unlimited. You are looking a ~$5,000 profit at a pps of $85, and almost twice that at $90

=====
A second approach takes a little more bullish stance:

Sell 10 JUN75 puts @ $3.18
Buy 10 JUN70 puts @ $1.00
Buy 10 JUN80 calls @ $0.95

The payout graph looks like this:

3393

The good news here is
- you start with a premium net of $1,230
- you have a lower max loss of ~$4,000

The bad news is
- your breakeven pps goes up from $70 to $73.77
- you hit your max loss level at a pps of $70, rather than $65.

Both positions fit with a bullish outlook. The second position works best if you are not too concerned about the stock going down, or are going to monitor this position tightly.

=====
The premiums in the above examples are from the Friday close. As I'm sure you know, those will not be the premiums in Monday's trading because of the reduced time to expiry.

I'll try to do some simulation of Monday's prices and see if I can't find something we could stalk on Monday.
If I find something, I'll post it here.

[netwrangler]

DRYS has been on a trip downward since closing at just above $110 on May 16th. The close on Thursday of 71.33 represents a ~35% decline in 19 trading days.

Friday's close was up 3.4% to 73.74. Moreover, the Friday trading candle was a razor sharp Doji that remained entirely above the Thursday close. I have been tracking this with the Adaptive RSI indicator. For some reason, this relatively obscure indicator has done an extraordinary job of calling the turns on DRYS since last December. The bad news is that it calls them a day or three late.

With that as background, I have to wonder if Monday will be the turnaround day. Management of this Greek shipping company will be in New York City for an Investors Day. The Saudis are talking about increasing crude liftings by 500kbpd. The ARSI indicator can't make the call before Monday's close, but a close in the high 70s would probably do it.

If DRYS gaps up at the open Monday, I'd believe that was the turn.

So how do you play that?
Well you can always just buy the stock.
Buying calls works too, although which ones will depend on what happens to the DRYS pps and implied volatility.
I'll look at JUL80 and JUL85 calls first.

What about Kev's 'Credit Spread'? Well, taking an educated guess at what the option premiums will be tomorrow assuming a pps of 75, I come up with this:

* Sell 10 JUN70 puts @ $0.95
* Buy 10 JUN65 puts @ $0.20
* Buy 10 JUN80 calls @ $0.95

The payout graph looks pretty much the same as the one in the prior post, except that the premiums net out to a -$200 instead of a +$50. That bothers me because if nothing happens by Friday, you're out the $200.

The other approach I suggested works out a little better at an assumed pps of 75. I figure the premiums will be close to this:

* Sell 10 JUN75 puts @ $2.85
* Buy 10 JUN70 puts @ $0.95
* Buy 10 JUN80 calls @ $0.95

Again the payout graph looks like it did for this alternative in the prior post, except that the initial net premium goes down from $1260 to $950. If nothing happens before expiry at the end of the week [and the price stays between 75 and 80] you keep the $950.
Above $80 you start to make some real money.
Below $73.50 or so, it's time to bail.

Will I be doing this?
No, I'll probably play the straight calls.

And, of course, if DRYS doesn't bounce tomorrow, it's "Nevermind."

[Riddicks]

Thanks net, I love how in two weeks you have become the resident expert on DRYS, you said you would do your homework and man you have. Thanks for the info, keep it coming brotha. Also the volume on Thurs was almost twice the avg day and the drop in price was a lot, this caught my eye because the 2-3 days prior to that it was dropping just much but on volumes of 3 million or so, and it was 9 mil on Thursday, does that mean anything also?

Thanks net for your DD.

[Keventerprises]

Good job, Net.

As a sensitive Musician, and very a logical thinker, you have a great balance. What sign are you?

You're Astrological. :D You rock Bro! Do you fly in your dreams?

Recent photo of Netwrangler: :thrasher:

-Kevin

[netwrangler]

Good job, Net.

As a sensitive Musician, and very a logical thinker, you have a great balance. What sign are you?

You're Astrological. :D You rock Bro! Do you fly in your dreams?

-Kevin
Ah, shucks, Kev. You don't really believe in that astrology stuff.
Takes me [well maybe both of us] back the 'Hair'.
That was fun
- but then was then and now is now.
And 'now' we are talking about real money.

Here's a chart on how it went for DRYS today.

3403

So, there is no confirmation of a turn.
This stock could gap downward in a trice.
I went long on DRYS at the open, but am worried that I held my DRYS shares overnight.
But, to quote from 'GWTW', "Tomorrow is another day."

I figure this is an on-going adventure.
See ya in the chat room to figure how all this works out.

[Keventerprises]

Ah, shucks, Kev. You don't really believe in that astrology stuff.
Takes me [well maybe both of us] back the 'Hair'.
That was fun
- but then was then and now is now.
And 'now' we are talking about real money.

Here's a chart on how it went for DRYS today.

3403

So, there is no confirmation of a turn.
This stock could gap downward in a trice.
I went long on DRYS at the open, but am worried that I held my DRYS shares overnight.
But, to quote from 'GWTW', "Tomorrow is another day."

I figure this is an on-going adventure.
See ya in the chat room to figure how all this works out.

Indeed. I viewed it as a very volatile sign that I am charting Calls and Puts below and above each other! I am charting Options from 65-105! Your predicted Jun 75 Puts went up to 2.15 today. You have a good sense and do the right thing. Encore.

[textech]

Looks like it's going to gap up this am. Could be a good sign.

[Keventerprises]

Looks like it's going to gap up this am. Could be a good sign.

Good call! We felt it would happen, but DRYS is a wild ride. Up 10% HOD! I'm thinking that as far as options are concerned, it's better to Buy Options on this one rather than Sell them! July should be good for the general market, but I'm afraid to Sell any Options on DRYS. 30% swings in less than 1 month is scary. I'm looking at Buying options on DRYS rather than selling control on this Maverick!

Congratulations, Net! 10% Gain today on DRYS?! DRYS is like the wildest Bull in the pen. Wrangle that Bastard Net! :top:

[netwrangler]

Good call! We felt it would happen, but DRYS is a wild ride. Up 10% HOD! I'm thinking that as far as options are concerned, it's better to Buy Options on this one rather than Sell them! July should be good for the general market, but I'm afraid to Sell any Options on DRYS. 30% swings in less than 1 month is scary. I'm looking at Buying options on DRYS rather than selling control on this Maverick!

Congratulations, Net! 10% Gain today on DRYS?! DRYS is like the wildest Bull in the pen. Wrangle that Bastard Net! :top:
Thanks for the cheer-leading, Kev.

I will say, frankly, that I am proud of this call.
As Riddicks noted, I did my homework.
[One thing Riddicks forgot to mention (such a modest person) is that he contributed to that homework.]

This call was the result of both Fundy and Tech analysis.
There is no way I could have made this call before I joined the OTF.
So, Thierry, take credit for this.

But also, give credit to Aiki14, luc1grunt, TonyM, Albert0373, Englishman26, Dadooh27, Microhedge, and [let the trumpets blare] Chinaman711.
These are the folks that have helped me learn how to trade.

Thank you, thank you, thank you!

=====
Oh and Kev, I think you are going to love my next post in this thread ...

[netwrangler]

Please delete this post.

[netwrangler]

DRYS had the courtesy to rise well above my purchase price today.
That's certainly good news, but immediately raises the question of whether or not to take profits.

I think that DRYS has the potential to go back up above 100. But I know that this is a very volatile stock, and could just as easily decide to go down to 70. I wanted to protect at least some of my paper gain and still have a way to participate if the PPS keeps going up.

My solution was a collar. Here is the set up:

sold JUL90 calls @ $4.10
bought JUL75 puts @ $4.10
As it happened, the premium from the calls exactly paid for the premium for the puts, making this a true 'costless' collar. If the premiums had not matched, the position would still be a 'collar', just not a costless one.

Here is what the payout diagram looks like:

3408

There are three possibilities:

If the PPS is above 90 at expiry [July 19th, but really July 18th close] I expect the shares will be assigned. That yields a 20% gain for a 35-day position. I'm more than happy to take that gain.

If the PPS stays below 90 but above 75, both options are worthless at expiry and I am left with the stock.

If the PPS is below 75, I can exercise the put at expiry and get my money back. [My entry price was $74.80]
But I'm not really satisfied with a breakeven at the low end. If the PPS falls, I expect to liquidate the position early.

Here is a chart of what I might expect to get from liquidating the position at different dates and PPS levels.

3409

I set an alert to warn me when the PPS gets to 76. If the alert fires, I will assess at the time whether I believe DRYS can recover, or whether it is time to bail. If I bail, I want to do so at a PPS above 75 if possible.

Note that the closer we get to expiry, the lower the expected gain from liquidating the position. This 'seepage' isn't too bad initially. The 7/2 [red] line hasn't lost a great deal. The 7/10 [green] line is marginal, and I certainly don't want to accept the 7/17 [black] payout. If the PPS is down in the last week before expiry, I am going to be very antsy, and looking for other alternatives.

One other alternative is rolling the call down to a lower strike.
Well, I'll cross that bridge when I get to it.
In the meantime, I'm rooting for 90. :wink:

[Keventerprises]

DRYS had the courtesy to rise well above my purchase price today.
That's certainly good news, but immediately raises the question of whether or not to take profits.

I think that DRYS has the potential to go back up above 100. But I know that this is a very volatile stock, and could just as easily decide to go down to 70. I wanted to protect at least some of my paper gain and still have a way to participate if the PPS keeps going up.

My solution was a collar. Here is the set up:

sold JUL90 calls @ $4.10
bought JUL75 puts @ $4.10
As it happened, the premium from the calls exactly paid for the premium for the puts, making this a true 'costless' collar. If the premiums had not matched, the position would still be a 'collar', just not a costless one.

Here is what the payout diagram looks like:

3408

There are three possibilities:

If the PPS is above 90 at expiry [July 19th, but really July 18th close] I expect the shares will be assigned. That yields a 20% gain for a 35-day position. I'm more than happy to take that gain.

If the PPS stays below 90 but above 75, both options are worthless at expiry and I am left with the stock.

If the PPS is below 75, I can exercise the put at expiry and get my money back. [My entry price was $74.80]
But I'm not really satisfied with a breakeven at the low end. If the PPS falls, I expect to liquidate the position early.

Here is a chart of what I might expect to get from liquidating the position at different dates and PPS levels.

3409

I set an alert to warn me when the PPS gets to 76. If the alert fires, I will assess at the time whether I believe DRYS can recover, or whether it is time to bail. If I bail, I want to do so at a PPS above 75 if possible.

Note that the closer we get to expiry, the lower the expected gain from liquidating the position. This 'seepage' isn't too bad initially. The 7/2 [red] line hasn't lost a great deal. The 7/10 [green] line is marginal, and I certainly don't want to accept the 7/17 [black] payout. If the PPS is down in the last week before expiry, I am going to be very antsy, and looking for other alternatives.

One other alternative is rolling the call down to a lower strike.
Well, I'll cross that bridge when I get to it.
In the meantime, I'm rooting for 90. :wink:

VERY good job, Net! The thing that worries me about today's profit taking is that it may have established a 'new' lower trading range for the near future. You did the right thing to Rollout to July. It may channel in the lower range for a time before breaking out of resistance to re-establish itself. This stock seems to be currently being traded by people riding the waves, and $10 up is the latest new frontier of 75-85. This seems to disregard the stocks merits and fundamentals and is just being played, by heavier hitters than us. I don't see much of 'Program Traders' or Institutional Investors making big moves with regard to volume trades lately? I don't see any extreme Institutional investing, and yet his does not seem to be about the Stock itself.

DRYS only has a current P/E of 5.1:1, Acc Distribution (Institutional Investing) is decent at 68 on a scale of 100, and there is NO Insider Trading. The Stochastic and MACD have been down and rising. Where is the Ghost in the closet, and what is it's name? This stock does not seem to be being traded on it's own merits. It's being treated like a rented mule.

[Keventerprises]

Look at this chart of DRYS and the VIX Volatility Index together. Note the exact opposite behavior of DRYS compared to the VIX. As Netwrangler noted, DRYS often moves with the Market, which is also the opposite of the VIX.

Also note on this chart that the VIX is often just a little ahead of the movement of DRYS, indicating direction a little in advance for where DRYS is going. Where the VIX is going, DRYS will soon follow, and DRYS moves 3 times as much as a percentage! This comparison chart has been similar each time I've looked at it. I'm going to watch these two together more closely and see how they play together.

This is a 1 Year, Daily line chart on 6/20/08. This will be interesting to also watch some closer frequency, shorter term charts down to 1 Day, 1 minute. This is 1 year, Daily:

3424

This a 5 Day Chart showing DRYS and VIX with similar behavior and relationship:

3425

Very interesting! I'm going to chart these two, intra day, and see if I can get a feel for where DRYS is going based on the VIX as one indicator.

[Keventerprises]

Look at this chart of DRYS and the VIX Volatility Index together. Note the exact opposite behavior of DRYS compared to the VIX. As Netwrangler noted, DRYS often moves with the Market, which is also the opposite of the VIX.

Also note on this chart that the VIX is often just a little ahead of the movement of DRYS, indicating direction a little in advance for where DRYS is going. Where the VIX is going, DRYS will soon follow, and DRYS moves 3 times as much as a percentage! This comparison chart has been similar each time I've looked at it. I'm going to watch these two together more closely and see how they play together.

This is a 1 Year, Daily line chart on 6/20/08. This will be interesting to also watch some closer frequency, shorter term charts down to 1 Day, 1 minute. This is 1 year, Daily:

3424

This a 5 Day Chart showing DRYS and VIX with similar behavior and relationship:

3425

Very interesting! I'm going to chart these two, intra day, and see if I can get a feel for where DRYS is going based on the VIX as one indicator.

Based on this Net, here is my prediction: When the VIX tops out and turns lower, your Jul 75 Puts that you bought will then peak at a price of around $5+ and will be safe to sell to close. Then your Jul 90 Calls that you sold can be bought back at their lowest price of somewhere close to $2.25-2.50 and then you won't be vulnerable if the stock goes way up, as the market is supposed to do in July. Right now, I'm going to Buy July 90 Calls when it hits $2.50.

I also bought 19 and 20 Puts on the Vix for $.25 and $.50, and I absolutely guarantee that sometime during the next month those will be worth $1.00-2.00, and the only risk is where to sell at the highest. Anything positive is all good and no worries. VIX Options CANNOT be exercised at any time, for any reason, by either party in advance of Expiration, but you can buy and sell them during the whole time. At some point they will be where you want them and no one else can exercise them even if they swing ITM temporarily. I'll just be happy when they double. Buying Calls at the other end is even safer when the VIX is down and the market is up.

How is that, Teacher? Did I do good? I want to have a nice safe July.

[Keventerprises]

Forgive me if I get carried away, but the Daily chart of DRYS and the VIX is amazingly consistent, and I believe it to be a very useful tool for DRYS. Attached is a typical chart showing both together and it is like this every day! I day traded options on DRYS yesterday by watching a chart of the two that looked like the continent of Africa. I believe this can be used successfully to day trade at least the options, and any input to refine the best way to do so would be much appreciated and very interesting. I salvaged the Jul 90 Calls I bought by buying more lower and then selling them all together when the stock went back up. Please give your input and opinion on this chart for ongoing tracking. It's way more interesting than a video game to watch the 1 minute Daily chart of these two draw mirror images of each other as they consistently form by the minute. Expert advice would be much appreciated.

There are a few possibilities for the current range:

When the PPS of DRYS is near it's recent high range of 80, the VIX will be below 22.50, and the 90 Calls can be sold for 2.60+ and bought back for 1.40 when the stock goes down to 75 and the VIX goes up over 23. A little braver move would be to sell the 85 Calls for 4.10 when the PPS is near 80 (VIX <22.50), then buy them back for 2.20 at a PPS of 75 (VIX >23). Sept 90 Calls pay even better and swing from 8.10 to 6.00. I would only recommend selling covered Calls on DRYS and stay near your computer. The above scenario is basically what Netwrangler did by selling Jul 90 Calls and buying the 75 Puts. Please let me know if you have found this chart helpful, and your thoughts on this. Here is a typical daily chart for today:

3442

[netwrangler]

Forgive me if I get carried away, but the Daily chart of DRYS and the VIX is amazingly consistent, and I believe it to be a very useful tool for DRYS. Attached is a typical chart showing both together and it is like this every day! I day traded options on DRYS yesterday by watching a chart of the two that looked like the continent of Africa. I believe this can be used successfully to day trade at least the options, and any input to refine the best way to do so would be much appreciated and very interesting. I salvaged the Jul 90 Calls I bought by buying more lower and then selling them all together when the stock went back up. Please give your input and opinion on this chart for ongoing tracking. It's way more interesting than a video game to watch the 1 minute Daily chart of these two draw mirror images of each other as they consistently form by the minute. Expert advice would be much appreciated.

There are a few possibilities for the current range:

When the PPS of DRYS is near it's recent high range of 80, the VIX will be below 22.50, and the 90 Calls can be sold for 2.60+ and bought back for 1.40 when the stock goes down to 75 and the VIX goes up over 23. A little braver move would be to sell the 85 Calls for 4.10 when the PPS is near 80 (VIX <22.50), then buy them back for 2.20 at a PPS of 75 (VIX >23). Sept 90 Calls pay even better and swing from 8.10 to 6.00. I would only recommend selling covered Calls on DRYS and stay near your computer. The above scenario is basically what Netwrangler did by selling Jul 90 Calls and buying the 75 Puts. Please let me know if you have found this chart helpful, and your thoughts on this. Here is a typical daily chart for today:

3442
Yes, that relationship is interesting and the chart is helpful.

Thanks for posting that.

BTW: I closed out my DRYS position. Bought back the calls and sold the stock on Friday. Sold the puts yesterday. Made a little more than $5/share in total and after fees - 6.7% in a week. There were ways to make more, but what I did involved little risk. I'm happy with the trade.

[Keventerprises]

Is this chart beautiful or what? Please note that the 11:30am plummet of the VIX preceded the rise in DRYS, which immediately thereafter went up 2.5% in 1/2 hour. The options didn't even have time to react or move much, so it would have to be buying the stock outright which went from 76.78 to 78.83 in 1/2 hour. This is the DRYS 'fish shaped' chart today 6/24, which is consistent with every other day in terms of predictability. I will take a stab at this fish and keep you posted. Any strategies would be much appreciated by those who know more than me:

3444

[netwrangler]

Is this chart beautiful or what? Please note that the 11:30am plummet of the VIX preceded the rise in DRYS, which immediately thereafter went up 2.5% in 1/2 hour. The options didn't even have time to react or move much, so it would have to be buying the stock outright which went from 76.78 to 78.83 in 1/2 hour. This is the DRYS 'fish shaped' chart today 6/24, which is consistent with every other day in terms of predictability. I will take a stab at this fish and keep you posted. Any strategies would be much appreciated by those who know more than me:

3444
I guess the basic question is:
Do you use the movement in the VIX to set up your trades with DRYS, or do you go the other way around.

You see what I'm saying. If these are simultaneous trends then the relationship is interesting, but not particularly useful.
If one side leads the other, well, then, we have something we can trade with.

Kev, you have been watching this. Do you have any feel for which is the 'leading' indicator?

[Riddicks]

That's the question I wanted to ask. Is it only for Day trading also? Or do you think we can use this to make calls ahead maybe couple of days ahead. But one this is for sure as Market volatility decreases Drys increase incrementally.

This stock just keeps giving you more and more but never enough.

[Keventerprises]

VIX is clearly the preceding leader on any clear or substantial changes, but by only 10 minutes. The extreme plays are the only ones that are clear to act on with visible or expected changes in the VIX, but you don't have to wait long for one to make itself visible. Occasionally in the mid-morning hours they don't establish themselves clearly yet, just like the VIX, SDS, SSO, QLD and QID and there is a bit of scribbling up and down, but by 10am on, they establish themselves clearly, and when the VIX moves or clearly has a direction, they part beautifully every time, and come back together as if in an orchestrated Tango. Sudden movements at opening are not always as clear or as well established as by 9:30-10:00am on, but I'm still watching that. The one thing that is consistent is when the VIX drops or climbs by much, DRYS will do the opposite within minutes. When it's in the middle does not give any clear direction and should just be observed, but crossovers usually keep going and they flip. It must be felt at an extreme and VIX leads the way, lately ranging between a VIX of 21.50-23.30 and a PPS of 75-80, with . Please study this with me and use your own judgment and please share your thoughts and experience, as I will too. When the stock went up 2.5% in 1/2 hour today, the options barely moved. The shape looks like it might be appropriate for a Straddle, Strangle or Collar? You know better than I Net! Please let us know what you think. If the VIX goes up tomorrow on the Fed uncertainty, DRYS will do the opposite. I like things that are consistent, and this is very interesting to watch unfold each day.

[netwrangler]

VIX is clearly the preceding leader on any clear or substantial changes, but by only 10 minutes. The extreme plays are the only ones that are clear to act on with visible or expected changes in the VIX, but you don't have to wait long for one to make itself visible. Occasionally in the mid-morning hours they don't establish themselves clearly yet, just like the VIX, SDS, SSO, QLD and QID and there is a bit of scribbling up and down, but by 10am on, they establish themselves clearly, and when the VIX moves or clearly has a direction, they part beautifully every time, and come back together as if in an orchestrated Tango. Sudden movements at opening are not always as clear or as well established as by 9:30-10:00am on, but I'm still watching that. The one thing that is consistent is when the VIX drops or climbs by much, DRYS will do the opposite within minutes. When it's in the middle does not give any clear direction and should just be observed, but crossovers usually keep going and they flip. It must be felt at an extreme and VIX leads the way, lately ranging between a VIX of 21.50-23.30 and a PPS of 75-80, with . Please study this with me and use your own judgment and please share your thoughts and experience, as I will too. When the stock went up 2.5% in 1/2 hour today, the options barely moved. The shape looks like it might be appropriate for a Straddle, Strangle or Collar? You know better than I Net! Please let us know what you think. If the VIX goes up tomorrow on the Fed uncertainty, DRYS will do the opposite. I like things that are consistent, and this is very interesting to watch unfold each day.
If the relationship works, I wouldn't mess with options. If the VIX goes up, I'd sell any long position and short the stock. If the VIX goes down, I'd cover the short and buy the stock.

Sounds like a simple game to me.

Still, I think I'd like to paper trade that for a day or two before jumping in with real money.

Could be a nice find, Kev.

[Keventerprises]

If the relationship works, I wouldn't mess with options. If the VIX goes up, I'd sell any long position and short the stock. If the VIX goes down, I'd cover the short and buy the stock.

Sounds like a simple game to me.

Still, I think I'd like to paper trade that for a day or two before jumping in with real money.

Could be a nice find, Kev.

It is unbelievably consistent and just uncanny to watch unfold. There isn't even a few minutes delay between VIX changing substantially and Drys going right with it. It's so fast and in sync that you can barely wait to see the VIX's movement.

I'm watching it do the same thing day after day like it's tied directly to the VIX. This morning with a steep drop right away on the VIX, DRYS shares could have been bought and then put in a Limit Order to sell DRYS at opposite of the same 2% drop in the VIX, and leave the rest alone. It should only be traded at obvious swings. When the Fed didn't cut rates it was fairly predictable that the VIX would go down for a short time, and DRYS went up another 2% in 1/2 hour again in the same day. Watch for and use VIX for a mood sensor. Foreseeable volatility makes this previously unpredictable stock, very predictable, but only tradeable on major sensed swings in the VIX, which there were TWO 2% Gains in 1/2 hour each in the same day alone today!

Whatever the VIX does, DRYS will follow very quickly. Note the morning 2% drop in the VIX followed immediately by the same amount of increase on DRYS, then at 14:45 notice the predictable effects on both of the announcement of the Fed not raising interest rates causing a 2nd 2% gain in DRYS (This Top Secret):

3454

Today I paper traded a buy on DRYS at 9:15 am and then set a Sell Limit order at a Gain of the same 2% that the VIX went down to, and that's mechanical and takes out the emotion and watching little squiggly sideways uncertainty. 2% moves is $1.50 per share and leave the little stuff alone until it becomes clear which way the VIX is going. It's very fun to watch and unbelievable how consistent it is. I should have known to do the same thing at release of the Fed news and watching the VIX at 14:45. Shhh...

[Riddicks]

Hey Net you might want to check that ARSI number again. Might be looking good after today. Needed that close at $82, didn't get it but darn close enough. I think it might have changed the trend on that and went above it.

[netwrangler]

Hey Net you might want to check that ARSI number again. Might be looking good after today. Needed that close at $82, didn't get it but darn close enough. I think it might have changed the trend on that and went above it.
Riddicks, you are right on.

The ARSI is ~79. The DRYS close is 81.70. This is a 'buy signal'.

I'll be ready at the open tomorrow to buy.

Course, we shall see what the open may bring. :wink:

[Keventerprises]

Riddicks, you are right on.

The ARSI is ~79. The DRYS close is 81.70. This is a 'buy signal'.

I'll be ready at the open tomorrow to buy.

Course, we shall see what the open may bring. :wink:

Very good job on this mornings call by you, Net. As usual you have a wisdom to absorb everything, and then out pops the right answer. DRYS and VIX broke trend until 10:30am and then paired off. There are times in the morning before DRYS and VIX establish themselves in that pattern.

I know of the RSI, but what is the ARSI you and Riddicks were referring to, and what are the implications that you foresaw? I ended up selling Jul 90 Calls because of the uncertainty of the PPS of DRYS. ANR is about the same as with DRYS on volatility of up and down $5.00 once or twice per day. Selling some Calls and having metals and LDK made it not too bad of a day. I sold 40 Puts on LDK for $3.70 on 6/23, because I wouldn't mind having more, knock on wood. I Like LDK, and through it all it's held up well.

Good job, as always. I appreciate your wisdom. :top:

[Riddicks]

Hey Kev, I sold those $90 calls too just because I was worried how the stock was going to hold up. I am surprised I actually got back more than I had expected on them, thanks to the run around 10:00.

This is what Net was talking about. Its at page 1 of this thread. By the way this has turned out to be a very informative thread and a long one too.

http://www.onlinetradersforum.com/images/icons/icon1.gif ARSI14/Price-cross back test
I know I posted I would do some 'fundy' analysis on DRYS.
But I also said [in the chat room] that I would check out Schwab's chart analysis capability.
I did the latter first, and came up with a find.

Bottom line:
If you had followed an ARSI14/Price-cross strategy with DRYS for the last 6 months, you would have doubled your money.
This is especially significant since the entry PPS, last December, was $89.03 and the closing price today was $93.09.
So much for "a rising tide lifts all ships."
This is a total victory for the trading strategy!
No, I wasn't in the stock in December. This is a back-test. [Wudda/cudda/shudda]

Here is the six month chart:

http://www.onlinetradersforum.com/attachment.php?attachmentid=3339&d=1212635877

The strategy is simple:
When the price crosses the Adaptive RSI on the way up, you buy.
When the price crosses the Adaptive RSI on the way down, you go short.
At each cross, you close the prior position.The test assumed a $10,000 stake.
Each trade is for 100 shares.
The bottom line [last column] on the trade table is profit.
You still have your $10,000.
Here is the [back-test] trade history:

http://www.onlinetradersforum.com/attachment.php?attachmentid=3340&d=1212635877

Holy Guacamole! That is really great performance! This was a swing/channel trader's dream!

So [cooler heads prevail] what happens next?

Two obvious alternatives are:
short now and ride the stock down to the next ARSI14/Price cross
wait until the next ARSI14/Price cross and go long.Going beyond the this one test, the obvious questions are:
Will this strategy work again?
Well, I'll bet on the champion.
You only lose once.
Will this strategy work with other stocks?
I think that's a Fundy question.
What was it that made DRYS get into those long up and down swings?
Other stocks that behave like that might well work with this strategy.
Sounds like something to scan for.Well, I still need to do some Fundy research.
This could be fun.

[Keventerprises]

Hey Kev, I sold those $90 calls too just because I was worried how the stock was going to hold up. I am surprised I actually got back more than I had expected on them, thanks to the run around 10:00.

This is what Net was talking about. Its at page 1 of this thread. By the way this has turned out to be a very informative thread and a long one too.

http://www.onlinetradersforum.com/images/icons/icon1.gif ARSI14/Price-cross back test
I know I posted I would do some 'fundy' analysis on DRYS.
But I also said [in the chat room] that I would check out Schwab's chart analysis capability.
I did the latter first, and came up with a find.

Bottom line:
If you had followed an ARSI14/Price-cross strategy with DRYS for the last 6 months, you would have doubled your money.
This is especially significant since the entry PPS, last December, was $89.03 and the closing price today was $93.09.
So much for "a rising tide lifts all ships."
This is a total victory for the trading strategy!
No, I wasn't in the stock in December. This is a back-test. [Wudda/cudda/shudda]

Here is the six month chart:

http://www.onlinetradersforum.com/attachment.php?attachmentid=3339&d=1212635877

The strategy is simple:
When the price crosses the Adaptive RSI on the way up, you buy.
When the price crosses the Adaptive RSI on the way down, you go short.
At each cross, you close the prior position.The test assumed a $10,000 stake.
Each trade is for 100 shares.
The bottom line [last column] on the trade table is profit.
You still have your $10,000.
Here is the [back-test] trade history:

http://www.onlinetradersforum.com/attachment.php?attachmentid=3340&d=1212635877

Holy Guacamole! That is really great performance! This was a swing/channel trader's dream!

So [cooler heads prevail] what happens next?

Two obvious alternatives are:
short now and ride the stock down to the next ARSI14/Price cross
wait until the next ARSI14/Price cross and go long.Going beyond the this one test, the obvious questions are:
Will this strategy work again?
Well, I'll bet on the champion.
You only lose once.
Will this strategy work with other stocks?
I think that's a Fundy question.
What was it that made DRYS get into those long up and down swings?
Other stocks that behave like that might well work with this strategy.
Sounds like something to scan for.Well, I still need to do some Fundy research.
This could be fun.

Good job Riddicks, and thank you! The volatility was scary at first, and perhaps becoming to be appreciated and possibly manageable on the major moves. It is a double day trader. Hopefully we can make it a dream instead of the nightmare it once appeared to be. ANR is right there with it for movement. I will have to learn and watch the ARSI, and enter that feature on my chart. DRYS channels alright, but it's a big fast channel... lol. If a person could master it, it could be $1,000/week. I was watching ANR so closely today too, that I added it to the VIX/DRYS chart, and in the after morning hours, ANR moved the same direction as DRYS but even more. $95-90-95.

Thanks for your input!

[Keventerprises]

Riddicks, you are right on.

The ARSI is ~79. The DRYS close is 81.70. This is a 'buy signal'.

I'll be ready at the open tomorrow to buy.

Course, we shall see what the open may bring. :wink:

Hi Net,
I'm really trying to learn and add to my charts the ARSI(14). The best I've been able to do or find anyone at Ameritrade or anywhere else either for that matter, is add the RSI(14) Overlaid on the Price, rather than below as an Indicator. The values of the RSI(14) are in the usual 30-50+ range for DRYS for example, and not the 75 range that you cited for ARSI for DRYS recently. They're not together intertwined like your chart, the RSI is always below the 80+ value of the price, but goes up and down below, and never crosses each other as you said they should with the ARSI.

Did you custom build the Adaptive RSI, or what does that mean 'Adaptive'? How do I 'Adapt' the regular RSI? I'm building a conditional Indicator and trying to see why it's a different range that is lower, and it's sort of like building a filter, but I've gotten as far as I can and Ameritrade doesn't really know what it is either. Is it standard on Stockcharts.com or did you build it? I'm out of guesses and Ameritrade Tech Support who might know left for the weekend, but I'm trying. Please let me know where it's available or if/how I can do it.

Thanks Always Net!

[Riddicks]

Hey Keven, sorry I couldn't answer your question but the solution you might be looking for is in page 2 of this thread.


Originally Posted by Riddicks View Post
The question from me is where do you get the ARSI from netwrangler? and chart program can I get it from? Is this just a normal RSI 14 number?
NET:
I was testing the Schwab charting and analysis software.
The ARSI/Price-cross is a strategy included in that software.
The specific software is StreetSmartPro.
It is available for free to 'traders' at Schwab.

That said, I'll try to find a 'second source'.
Or maybe someone will post one.

Sorry I don't know more. This is something I found [and shared] today.

And for those of you staying up late to get the latest in mathematical input...

Here is the formula for the Adaptive RSI 'study' used above:

Name: ARSI14.png Views: 76 Size: 10.4 KB

So [as the math profs say] it is intuitively obvious that the adaptive RSI 'study' massages a standard version of the RSI and then uses it as a smoothing constant to calculate a variation of a moving average.

For the number-dummies amongst us [and yes, I count myself as one] take a look at how an SMA and EMA are calculated. The ARSI is just another approach to modifying the SMA.

What this suggests, of course, is that I need to back-test various SMAs and EMAs to establish that the ARSI is actually a better indicator.

I'm really going to hate it if an SMA20/Price-cross produces better results.

I hope this helps.

[Keventerprises]

Hey Keven, sorry I couldn't answer your question but the solution you might be looking for is in page 2 of this thread.


Originally Posted by Riddicks View Post
The question from me is where do you get the ARSI from netwrangler? and chart program can I get it from? Is this just a normal RSI 14 number?
NET:
I was testing the Schwab charting and analysis software.
The ARSI/Price-cross is a strategy included in that software.
The specific software is StreetSmartPro.
It is available for free to 'traders' at Schwab.

That said, I'll try to find a 'second source'.
Or maybe someone will post one.

Sorry I don't know more. This is something I found [and shared] today.

And for those of you staying up late to get the latest in mathematical input...

Here is the formula for the Adaptive RSI 'study' used above:

Name: ARSI14.png Views: 76 Size: 10.4 KB

So [as the math profs say] it is intuitively obvious that the adaptive RSI 'study' massages a standard version of the RSI and then uses it as a smoothing constant to calculate a variation of a moving average.

For the number-dummies amongst us [and yes, I count myself as one] take a look at how an SMA and EMA are calculated. The ARSI is just another approach to modifying the SMA.

What this suggests, of course, is that I need to back-test various SMAs and EMAs to establish that the ARSI is actually a better indicator.

I'm really going to hate it if an SMA20/Price-cross produces better results.

I hope this helps.

Thanks Riddicks, and Netwrangler! My apologies not having read the whole thread and being redundant. I will call the Tech Support specialists for Ameritrade's other trading platform called Strategy Desk when they get in on Monday, and search the web, and call Schwaab. I hate to switch brokers, maybe a second account for DRYS would be necessary. How do you like the rest of Schwaab, Netwrangler?

Thank you both for everything, and your continued efforts to find a sensible approach to DRYS, and possibly ANR. I will keep working to incorporate StreetSmartPro or a comparable ARSI system, and post any relevant findings or sources. Please post your findings and any ARSI crossovers also. I still have some DRYS Jul 90 Calls that I sold.

[Keventerprises]

Help, Net!
I'm getting the DRYS heaves. Did the Price cross below the ARSI? I missed you the other day on Chat. What do you see? LOD $69.30 and a rising VIX?? I'm thinking of selling 70 Puts for $4.00, but if the VIX continues up Thursday, it might go down more. DRYS is also bound to the Baltic Shipping Rates.

I had to go Horizontal on my Excel Page format to cover 65-90 Options. Do they have a Titanium Condor?

Are you still interested in this Tempest? I bought back my 85 calls for .80 while the PPS was low, and kept the 90's.

Selling 70 Puts seems like a discount way to protect and possibly buy shares if they go down, then the shares aren't in your name, cost<=$65.30. PPS @ 69.30, Jul 70 Puts $4.00 on 7/2 with potential VIX Rising Thursday on 1/2 day trading.

Please throw me a Net! :captain: Where are my DRYS Shorts... I only have 200 long and want to buy more to cover calls l/t.

I believe 1 more case of Pacifico, and a plate of Chile Verde is standard compensation. :top:

[netwrangler]

Help, Net!
I'm getting the DRYS heaves. Did the Price cross below the ARSI? I missed you the other day on Chat. What do you see? LOD $69.30 and a rising VIX?? I'm thinking of selling 70 Puts for $4.00, but if the VIX continues up Thursday, it might go down more. DRYS is also bound to the Baltic Shipping Rates.

I had to go Horizontal on my Excel Page format to cover 65-90 Options. Do they have a Titanium Condor?

Are you still interested in this Tempest? I bought back my 85 calls for .80 while the PPS was low, and kept the 90's.

Selling 70 Puts seems like a discount way to protect and possibly buy shares if they go down, then the shares aren't in your name, cost<=$65.30. PPS @ 69.30, Jul 70 Puts $4.00 on 7/2 with potential VIX Rising Thursday on 1/2 day trading.

Please throw me a Net! :captain: Where are my DRYS Shorts... I only have 200 long and want to buy more to cover calls l/t.

I believe 1 more case of Pacifico, and a plate of Chile Verde is standard compensation. :top:
With storm warnings flying, it's time to batten down the hatches.

Yes, the DRYS price is [well] below the ARSI. That cross took place on Monday. So the indicator is bearish, and has been for three days prior to today. But, as the seaman calling the depth with the lead-line might call, I see "No bottom, no bottom, no bottom to this line."

As you know, I'm in port in Kauai for a refit. Looks like I picked a good time for it. Wouldn't want to be sailing these waters in DRYS right now -- have to do it short-handed.

Well, that might work, but it might get me into a fair amount of pyrotechnics. Think I'll just watch the fireworks at the Stadium in Lihue and maybe take DRYS out for sea-trials on Monday.

[Riddicks]

Held up extremely well over the $66 support level, seems like it pushed the whole market up by itself. haha.

But I think again, $70 is a good time to buy this stock anytime you can get it. But I am glad we got out of those $90 options when we did on the last run up, this stock just doesn't give an inch.

[Keventerprises]

With storm warnings flying, it's time to batten down the hatches.

Yes, the DRYS price is [well] below the ARSI. That cross took place on Monday. So the indicator is bearish, and has been for three days prior to today. But, as the seaman calling the depth with the lead-line might call, I see "No bottom, no bottom, no bottom to this line."

As you know, I'm in port in Kauai for a refit. Looks like I picked a good time for it. Wouldn't want to be sailing these waters in DRYS right now -- have to do it short-handed.

Well, that might work, but it might get me into a fair amount of pyrotechnics. Think I'll just watch the fireworks at the Stadium in Lihue and maybe take DRYS out for sea-trials on Monday.

That is just plain wrong that you are in Kauai, and I'm not... :y: :embarassed: :cool2: :bawling: :laugh: That sounds really good right now. I'm happy for you. The sound of waves...Garden Island with your Love...

I bought 200 more DRYS at 69.30 to use to cover options later, and sold (4) 70 Puts for 4.30. Bought back my 85 Calls and kept the 90's. Not as interesting as what you're doing...don't forget us little people...

It is nice to be Incommunicado there though...Enjoy! :top:

Aloha.

[Keventerprises]

Held up extremely well over the $66 support level, seems like it pushed the whole market up by itself. haha.

But I think again, $70 is a good time to buy this stock anytime you can get it. But I am glad we got out of those $90 options when we did on the last run up, this stock just doesn't give an inch.

...Looks like it's up to you and me Riddicks... ANR makes DRYS look slow. from 105-84 same day. Sold 2 Jul 80 Puts on ANR for 4.10 at a PPS of 84. Out of money to buy more shares. Sold SLV short at 180-182. Kinda boring compared to Kauai... What do you think and like? My Solars tanked hard. Fortunately I sold the shares earlier, but I have Puts in the money, I can't believe they haven't been exercised...shhh. Net took all the sunshine with him. It followed him to Kauai...

[Keventerprises]

With storm warnings flying, it's time to batten down the hatches.

Yes, the DRYS price is [well] below the ARSI. That cross took place on Monday. So the indicator is bearish, and has been for three days prior to today. But, as the seaman calling the depth with the lead-line might call, I see "No bottom, no bottom, no bottom to this line."

As you know, I'm in port in Kauai for a refit. Looks like I picked a good time for it. Wouldn't want to be sailing these waters in DRYS right now -- have to do it short-handed.

Well, that might work, but it might get me into a fair amount of pyrotechnics. Think I'll just watch the fireworks at the Stadium in Lihue and maybe take DRYS out for sea-trials on Monday.

I hope you fall on a Lei, and Heart yourself...:top::D

[Keventerprises]

Hi Net,
I hope you are home well and had a great trip.

I am looking into a Scwab account to get ARSI (StreetSmartPro), especially for DRYS. Here is the VIX/DRYS chart showing the increase after a bottom of DRYS at PPS 71.89 today 7/8. Did DRYS cross above the ARSI today or recently? I'd like to correlate the two.

If you have time, would you please post the crossings of DRYS PPS and ARSI until I set up an account with Schwab?

Thank you!

Aloha.

Here is the chart for 7/8:

3492

[Keventerprises]

I hope you fall on a Lei, and Heart yourself...:top::D

I should not have used a double negative. I hope and think you know I was trying to say, "I hope you get Leighed."

All the Best,

-Green with envy... :mrgreen:

[Riddicks]

Hey Kev, so its safe to assume that DRYS is over the ARSI but there is some major resistance ahead and if it can close above $82 imo is the strongest indicator, lets see if they can continue towards that. If it does go above $82-$84 I will def be picking up some of DRYS to ride it till the earnings.

[Keventerprises]

And for those of you staying up late to get the latest in mathematical input...

Here is the formula for the Adaptive RSI 'study' used above:

3341

So [as the math profs say] it is intuitively obvious that the adaptive RSI 'study' massages a standard version of the RSI and then uses it as a smoothing constant to calculate a variation of a moving average.

For the number-dummies amongst us [and yes, I count myself as one] take a look at how an SMA and EMA are calculated. The ARSI is just another approach to modifying the SMA.

What this suggests, of course, is that I need to back-test various SMAs and EMAs to establish that the ARSI is actually a better indicator.

I'm really going to hate it if an SMA20/Price-cross produces better results.

Hi Net and Riddicks,
Ameritrade is really going out of their way to implement the ARSI on 2 of their Platforms. The only variable they cannot confirm the meaning of is the 't' in the formula. Is that 'time' or ...? They have some good experts working on it. Please let me know if you know. Thank you!

p.s. I sold 70 & 75 Puts on DRYS for 4.30 and 3.80 and wouldn't mind having shares put to me for 65.70 to have for covered calls later. Kind of a discount way to either buy discounted shares, or preferably keep the premium because it went back up.

[Riddicks]

Okay they were supposed to have released their earnings by now. Still haven't heard anything, do you guys know something? I have no idea.

[MrSer]

I would buy some 70$ puts now.

[Supreona]

Yeah those idiots on the google message boards were hyping this thing up before and after they released earnings. Talking about how the sale of the ships was a normal event and how it would be counted. lol I knew they would miss.