Most recently, I have had the opportunity to work 1-on-1 with a person pretty high up in my organization. Prior to joining our company, he was co-founder of very very successful companies (currently listed on Nasdaq), back in the dot-com bubble days. One of the dreams that I have is to do a technology start up some day. I mentioned to him about this dream of mine and this is what he had to say:
If you want to sell a service/product online, you have to do it in three steps and in the following (and no different order):
- ensure that the service is of use to “one” customer
- ensure that the service is of use to a “group” of customers (i.e. some additional value is available to each individual customer from the fact that a “group” of people are using that service)
- think of ways to monetize this service
A few of our fellow bloggers have followed this model where by they offered their service free to the people visiting their blog (step 1), they set up a forum where the users of that service could have discussions about how they are using that service (step 2), once it was clear that users of the service were deriving a lot of value from the service did they go ahead and made the service paid (step 3). It might seem that the 3-step process is quite obvious, but when it comes to putting it into practice, the first thought that comes to the head for a lot of us is “how can I make most money”. In reality, that kind of mentality never leads to success.
Any thoughts/comments are welcome.
Below is the ES 1 min chart from Thursday Jun 25, 2009. Note that the time is shown in terms of Pacific Time Zone. I was trying to make sense out of what the hell happened in today’s tape. And I found some examples of blatant tape manipulation. Here are some examples. This happens all day long. One just needs to be aware that it exists out there and has to adjust accordingly.
Exhibit 1: 12:12pm PT to 12:22pm PT – ES declined on decreasing volume. So, one would expect the decline to stop soon, which is what happened because ES then went sideways. Good – this is what we would expect.
Exhibit 2: 12:28pm PT to 12:38pm PT – ES declined 4 points in 10 minutes on increasing volume. One would expect ES go keep going down as the momentum is building. However not only does the tape stop going down all of a sudden, but it also reverses. This is tape manipulation.
Exhibit 3: 12:47pm PT to 12:47pm PT – ES again melts up on decreasing volume. One would expect it to stop doing so and reverse. But it doesn’t. This is again tape manipulation.
Finally, folks – how about some love shared once you are done reading this stuff. Thank you 
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Those looking to trade VIX options need to know what they are trading. VIX options are very different from equity options in many many ways, some of which are:
- They do not expire on 3rd Friday of the month. They expire on the Wednesday at open – sometimes it is the 3rd Wednesday of the month, sometimes it isn’t…
- They are priced off of VIX futures and not the cash VIX index
- The calendar spreads work very very differently, and one can be burnt badly if one doesn’t understand how calendar spreads would work
ToS did an article on VIX options back in the February 2009 edition of their quarterly magazine. The article is on the pages 36-39 of that magazine. Click here to access that magazine.
I had this one ready to go in my drafts for more than a week. I completely forgot to post this. Anyway, here it is.
Happy Father’s Day to all you pas and grandpas out there. I am a dad to a 2 year old girl. Being a father to that girl is one of the best things to happen in my life. I feel very special and grateful that I have the opportunity to see her grow every day. We have so much to learn from kids around us – it is just amazing. I will do a post some day sharing more on this topic. For now, I will leave you with a quote by Mark Twain:
“When I was a boy of fourteen, my father was so ignorant I could hardly stand to have the old man around. But when I got to be twenty-one, I was astonished at how much the old man had learned in seven years. ” – Mark Twain
Most recently, you must have heard a lot of chatter about the Golden Cross. What in the world is Golden Cross?
Well, Golden Cross happens when 200dma crosses the 50dma which is moving up. Occurance of this is being touted as a very bullish event. There may in fact be some truth to the fact that this Golden Cross does trigger some buying by hedge funds and mutual fund managers.
However, before we even get to debating if Golden Cross is something of significance or not, we first have to settle whether to use “simple moving averages” OR “exponential moving averages”. While doing search on the internet, I found this article that illustrates that historically trading the Golden Cross of SMAs has outperformed trading the Golden Cross of EMAs.
In any case, whether or not you are a believer, it is worth while to see where the major indices are w.r.t. Golden Cross. And please… don’t forget to share some love
UPDATE Jun 19, 2009: The Golden Cross on RUT did materialize today. I don’t see anything happen today because of it. The only thing different today is that it has started raining again.. but I won’t credit the Golden Cross with that because rain is supposed to be the norm in Seattle
At close, RIMM was $76.55. Here is the chart of what happened to RIMM in after-hours today. Right when the earnings came out, it went down to $71.xx and ever since then it has creeped up steadily crept up and even got into positive territory AH. What a bumpy ride. Market Makers likely are going to pin it to $75 strike tomorrow. Depending on the broader market posture, it might even creep up to the $80 strike.
