CNBC Options Action -- you cannot be serious

W

weewilly

Aug 21 2009 "The Final Call":
http://www.cnbc.com/id/15840232?video=1223085219&play=1

Anyone else find it questionable, from a risk perspective, that they are putting TV viewers into ratio put spreads, e.g. SPY 1x2 Dec 100/90p and selling naked calls, e.g. NSC Sep 50c? These may turn out to be great trades, but, my goodness, some of the less sophisticated viewers might lose serious money in positions like these.

Seems irresponsible to me.
 
Quote from weewilly:

Aug 21 2009 "The Final Call":
http://www.cnbc.com/id/15840232?video=1223085219&play=1

Anyone else find it questionable, from a risk perspective, that they are putting TV viewers into ratio put spreads, e.g. SPY 1x2 Dec 100/90p and selling naked calls, e.g. NSC Sep 50c? These may turn out to be great trades, but, my goodness, some of the less sophisticated viewers might lose serious money in positions like these.

Seems irresponsible to me.
More...

Don't worry, CNBC has their iron-clad disclaimer programmed into the show. Watch close, and you'll catch it.
 
I watched the show too, as far as I understood concerning NSC they said if you owned the stock. I agree what are the chances you own that specific stock to sell the sept 50 call...

As for the ratio put spread, I don't know sometimes it seems they are catering to the suburb option trader that plays with 1 or 2 contracts once in a while when they get "bored" with their stock portfolio. The week before they basically went out and gambled on earnings, which I think is very dumb even though they made profit on it. Other times they slip by these much riskier trades... They just slip by very casually that this will require margin.

I guess I agree with you on this point but I don't know, I have no idea what their average viewer's knowledge is...

I think the show would be better served with a full hour and not them throwing as many trades as possible in the least time possible. I think they should take more time to go deeper and detail 1 or 2 trades per week and really explain what it implies, the greeks etc...
 
CNBC's disclaimer notwithstanding, I can't see how the sponsor, thinkorswim, would be overly thrilled with the advocacy of these trades.
 
Quote from weewilly:

Aug 21 2009 "The Final Call":
http://www.cnbc.com/id/15840232?video=1223085219&play=1

Anyone else find it questionable, from a risk perspective, that they are putting TV viewers into ratio put spreads, e.g. SPY 1x2 Dec 100/90p and selling naked calls, e.g. NSC Sep 50c? These may turn out to be great trades, but, my goodness, some of the less sophisticated viewers might lose serious money in positions like these.

Seems irresponsible to me.
More...

I did a quick view, he said if you own NSC sell the sep 50 calls. (Covered call)

No way in hell a TV show is going to tell viewers to sell naked calls.
 
Quote from KINGOFSHORTS:
No way in hell a TV show is going to tell viewers to sell naked calls.
More...
They've been doing just that time and time again.

Jul 24 Final Call:
http://www.cnbc.com/id/15840232?video=1194823403&play=1

Mike recommends the CVX JAN10 60/75 risk reversal (short 75c, long 60p).

Jun 26 Final Call:
http://www.cnbc.com/id/15840232?video=1165772164&play=1

Danny recommends the AAPL AUG 125/150 risk reversal (short 150c, long 125p).
(He sure got crucified on that one.)

Jul 17 Final Call:
http://www.cnbc.com/id/15840232?video=1186706659&play=1

To his credit, Danny bails on the AAPL risk reversal and goes long the AUG 150/160 call bull spread.
 
IIRC their first episode had a trader recommend selling GOOG puts before earnings.....given the audience of the show, I saw that as horribly irresponsible, much like CNBC in general these days. Thankfully that person, whomever he was, never came back on the show.

While I don't take OA's advice to trade, it seems they're fairly conservative, with most of their trades being straight calls/puts, vertical spreads, or collars. So in that case, I think it's okay show.

But I agree w/the OP about the ratio spread on the SPY reco'd this morning -- I didn't think that an appropriate 'retail' strategy.
 
Quote from weewilly:

Aug 21 2009 "The Final Call":
http://www.cnbc.com/id/15840232?video=1223085219&play=1

Anyone else find it questionable, from a risk perspective, that they are putting TV viewers into ratio put spreads, e.g. SPY 1x2 Dec 100/90p and selling naked calls, e.g. NSC Sep 50c? These may turn out to be great trades, but, my goodness, some of the less sophisticated viewers might lose serious money in positions like these.

Seems irresponsible to me.
More...
Maybe they are taking the other side of the trades?
 
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