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QuoteJust my two cents, but I think that, in general, this is a great idea.

1. Taking time to evaluate a stock would allow a chance to discover additional things about the sector, competitors, products, management and market that would only enhance confidence in the stock purchase.

2. Watching for the pull back to the 50 sma would allow time for number one to take place and possibly provide a better entry point.  Essentially, we would develop a watch list of high confidence stocks that we could pull the trigger on at any time. This would not be the same as trying to time the market, but rather an opportunity to look for confirmation of the investment premise before investing dollars.   

3. I believe that this would be a great guideline, but not a hard rule. For some stocks, the investment premise might be confirmed sufficiently through research to pull the trigger immediately.

On a separate subject,  I have no objections to having a small proportion of stocks in otc stocks of any nationality. Size and exchange do not provide a guarantee of honesty in management, just a greater likelihood. If you have any doubts, go back a few years and take a look at Enron or Adelphia. The evaluation process serves as a filter for determining those stocks where sufficient or insufficient information exists to have a high confidence level.  This would be particularly true if we take the approach outlined above. Stocks moving from OTC to a more respected exchange could be one reason for a high confidence level.

Thanks for this contribution on the strategic side ravenquork

I've been considering it and thinking so much about the "buying process" that I got very late for today's updates and analysis. We'll get back to this later.

ASTI filed its 3rd quarter 10-Q.

Actual results don't matter much. The important stuff are management's plans for the future and how the construction of the factory is going. There's a lot in this report that I'll discuss with you, but I'm not doing particularly well today, so we'll do it over the next few updates.

I just want to drop a line that opens a brand new product category for ASTI, one that seems to me is very exciting:

«Another product application we are currently exploring is a small pocket-sized portable charger for cell-phones, MP3 players, cameras and other similar devices. Our module is pocket-size and is able to produce over 7 volts as a result of our unique ability to monolithically integrate the cells directly into the module.»

I think this is just what the global market needs, a pocket size and mobile battery charger working through solar energy. This is needed not for just the products mentioned but also for laptop batteries.

There was another news just out:

• Ascent Solar to List on NASDAQ Global Market
Business Wire (Wed 6:00am)

I'll keep holding ASTI for the long term.

An interesting press release out yesterday while the market was open:

• Customers See Future in Hydro, Ascent Building System Concepts
Business Wire (Wed 10:00am)

Joseph McCabe, who is responsible for business development for Ascent Solar, says the prototypes created "absolute excitement" at Batimat but that patience is key.

I'll keep holding ASTI for the long term.

A better stock in this sector is FSLR.  I just did a 200/195 bull put spread for $1.40 credit, or a 38% return for 5 weeks of trading!  I doubt the stock will go below 200 again.  It's up today despite a weak market.

Quote from: Leaira on November 19, 2007, 03:55:52 PM
A better stock in this sector is FSLR.  I just did a 200/195 bull put spread for $1.40 credit, or a 38% return for 5 weeks of trading!  I doubt the stock will go below 200 again.  It's up today despite a weak market.

I don't think FSLR will, by any chance, be a 10 bagger, simply because it is already a $17 B market cap company, and it is extremely rare for a company to go up to a $170 B market cap. Not even GOOG is worth $170 B.

On the other hand, ASTI, being just a $0.164 M market cap, has a lot of chances of becoming a $1.6 B market cap company, in fact, I'm pretty sure that it will. It may even become a $16 B company and be a 100 bagger, if one gives it 5 years time.

FSLR is obviously a "better" company than ASTI, but it also costs 100 times more to buy it now.

I know ASTI closed just a bit below the 50 days SMA yesterday, but I believe these are all peanuts. I know it will take a lot of time for the facilities to be build and the company to start selling its products in a meaningful way. I know that, but there's a high degree of certainty that it will happen, if for nothing else because the company is backed by NHY, a $17 B market cap company.

The next "news" I'm expecting is that Norsk Hydro increased its stake in ASTI to 35%, from 23%. This news should come out in December.

I'll keep holding ASTI for the long term.

Well, no, FSLR won't be a 10-bagger, but it doesn't need to be.  Let's say you manage to trade credit spreads on FSLR every month, bringing in a 30% return.  To get a 30% return on a 5-point spread, that would require taking $1.20 credit on the trade.

Let's compound that for a year, by trading more contracts each month.  1.3 ^ 12 = 23.3, or a 2,230% return for a year.  That's like getting a 23-bagger in a year's time!  How long do you think it will take ASTI to increase 23 times its value, or even 10 times, from now?

QuoteLet's say you manage to trade credit spreads on FSLR every month, bringing in a 30% return.  To get a 30% return on a 5-point spread, that would require taking $1.20 credit on the trade.

Trading credit spreads? What do you mean Leaira? I'm not familiar with that financial instrument and if you have some time, please share your knowledge with us. I would like to learn.

Thank you

QuoteHow long do you think it will take ASTI to increase 23 times its value, or even 10 times, from now?

10 times? I think ASTI will be worth 10 times more than now in late 2009/early 2010.

A credit spread (or vertical spread) is an options trading strategy where you sell an option, then buy a cheaper one of a different strike price, both in the same expiration month.  Let's use FSLR as an example.  I'm bullish on FSLR, and based on the chart, I don't think it will drop below $200 in the next month.  So I sold to open the December 200 put for $13.80, and bought the December 195 put for $12.00.  WOW! I just noticed that I got filled for $1.80 credit, not the 1.40 I first thought!  This is a 56% return on the trade -- for one month!!

Now, as long as the stock stays above $200, the time value will keep eroding away at the two options, and the money will go right into my pocket!  When you are the seller of options, time decay works in your favor.  When you buy options, it works against you.  Credit spreads are a selling strategy.

For more info, come visit the chat room at www.bettertrades.com.  I hang out in there often.

Quote from: Leaira on November 20, 2007, 08:34:19 AM
A credit spread (or vertical spread) is an options trading strategy where you sell an option, then buy a cheaper one of a different strike price, both in the same expiration month.  Let's use FSLR as an example.  I'm bullish on FSLR, and based on the chart, I don't think it will drop below $200 in the next month.  So I sold to open the December 200 put for $13.80, and bought the December 195 put for $12.00.  WOW! I just noticed that I got filled for $1.80 credit, not the 1.40 I first thought!  This is a 56% return on the trade -- for one month!!

Now, as long as the stock stays above $200, the time value will keep eroding away at the two options, and the money will go right into my pocket!  When you are the seller of options, time decay works in your favor.  When you buy options, it works against you.  Credit spreads are a selling strategy.

For more info, come visit the chat room at www.bettertrades.com.  I hang out in there often.

This is interesting Leaira. What needs to happen for you to lose? (just trying to acess the risks). Thanks

To lose on a credit spread, the stock has to trade at a price where the option you sold would become in-the-money.  In FSLR, I sold the 200 and bought the 195 puts.  If the stock dropped below 200, then the spread would be in trouble, and I'd have to unwind out of the spread.  I would have to buy back the 200 put to end the obligation.  Hopefully from that point on, the stock would keep dropping enough to make back my losses (and then some profit) on the remaining long 195 put.  But it doesn't always work out that way.  Sometimes I end up taking a loss on a trade if the stock doesn't move after stopping  me out of the spread. 

But when trading spreads, or any strategy, you would use the same entry and exit points.  I would have a stop buback order to buy back the short option before it got near the short strike price.  I trade spreads in trends, and usually use the 10EMA as a stop (for a stock that bounces off it as support).  I enter when it bounces, by selling the first put below the 10EMA, then buying the one below the one I sold.

Is this making sense to you?

I forgot to add, the more credit you take in, the less money you can lose.  In the FSLR example, there's a fixed $5 spread.  On 10 contracts, you're putting $5000 at risk.  However, $1800 of it is money that the market paid me to open the trade, so there's only $3200 of my money at risk.  It's that amount that your %return is based on.

I put up $3200 of my money in order to make a proft of $1800 on it.

Here's a formula: 100*[ credit / (spread-credit) ] is the percent return.
(spread-credit) is the maximum risk, or the most that can be lost in the trade.

you're making my brain hurt

I have to give some words to keep it balanced. Yes, it may have worked for you; Yes, your bull put spread in FSLR may work out again. But to say that you "already made 38%" just after you put on the spread is VERY MISLEADING!

The assumption is that FSLR does not drop below 200 when it expires, and that is a big assupmtion. How can you say that you just made "38% return for 5 weeks of trading"? In fact, if FSLR drops below $195, you will LOSE $360 per contract.

NO OPTION STRATEGY WORKS ALL THE TIME, pure and simple. I may not be a big option trader, but I know all the theories behind it.

Quote from: Leaira on November 19, 2007, 03:55:52 PM
A better stock in this sector is FSLR.  I just did a 200/195 bull put spread for $1.40 credit, or a 38% return for 5 weeks of trading!  I doubt the stock will go below 200 again.  It's up today despite a weak market.

I have to agree with realcoolhead, while I appreciate the sharing of ideas I think that this option strategy has not been presented fairly.  To say that you could make 2000 percent in a year is misleading because if any 1 of your trades fails you lose everything under the same assumptions (compounding the gains)  30% times 11 months times one month of -100% = -100% for the year. 

Also, the risk/reward of $1800 gain versus $3200 loss represents the fact that when you executed the trade when FSLR was over $210 the market assigned a 36% chance it would finish under 200 (or 195, I'm not going to take the time to figure that out as i am making a general point here) and a 64% chance that your trade will be over that point.  Most of the time you win.  But when you lose, you lose 100%.  And with FSLR at 202 right now I could execute the same 200/195 trade for a credit of about $2.3 which means  there is now a 46% chance of failure and a 54% chance of success.   That would be an 85% return in only 4 1/2 weeks.  But almost as likely is a -100 percent return. 

Just my 2 cents and I am the first to admit I am no expert.   I for one appreciate the ideas and generated and the discussions that follow on this site.  I would love for Leaira to continue to post trades so we can follow and see if incorporating stops using trendlines can mitigate the potential losses.  Keep up the good work!

Quote from: realcoolhead on November 20, 2007, 09:07:20 PM
I have to give some words to keep it balanced. Yes, it may have worked for you; Yes, your bull put spread in FSLR may work out again. But to say that you "already made 38%" just after you put on the spread is VERY MISLEADING!

The assumption is that FSLR does not drop below 200 when it expires, and that is a big assupmtion. How can you say that you just made "38% return for 5 weeks of trading"? In fact, if FSLR drops below $195, you will LOSE $360 per contract.

NO OPTION STRATEGY WORKS ALL THE TIME, pure and simple. I may not be a big option trader, but I know all the theories behind it.

Quote from: Leaira on November 19, 2007, 03:55:52 PM
A better stock in this sector is FSLR.  I just did a 200/195 bull put spread for $1.40 credit, or a 38% return for 5 weeks of trading!  I doubt the stock will go below 200 again.  It's up today despite a weak market.

I never thought this would drop below David's entry price. This is just the latest stock where one must ask how far it'll drop,along with tbsi.

ASTi is more than 10% down. I am sure it is pulled down by the fact that it's been up so much lately. But that does not ease down the pain. ASTI has not much revenue and the stock's been up on a future promise. Now that the market is selling, any promise sounds like a joke to people. TBSI is knocking on the SMA200 and breaking below it. Losing almost 50% on that stock...