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I signed up for Samcart a few months ago. It looked pretty sweet. Nice looking order form, order bumps, upsells, affiliate sales, integration to Infusionsoft, Authorize.net and PayPal. Awesome right?
Now it’s been a few months and I’m at the point of abandoning Samcart.
The main gripes I have are
I have to ask any customers who have subscriptions to update their credit card in Infusionsoft now so I can move their subscriptions out of Samcart. Really Samcart?
For me, it’s Game Over with Samcart
Think VERY carefully if you have a subscription product and are contemplating using Samcart. If you ever change your mind and want to move, it’s a nightmare.
UPDATE. I asked this question in the Samcart support:
So I can’t get the CC data into Infusionsoft?
Not with the way our Infusion integration is setup. It would violate a lot of compliance issues to pass over the CC data.
At one point, we have a really crazy Infusionsoft integration that did this. Took a lot of time to create it, had a lot of people test it out. And we were forced to shut it off. Infusionsoft’s API created a really poor experience for people. Information kept getting missed, order information not passed correctly, it was a mess.
So our current integration is much simpler. And we think SamCart’s speed, simplicity, stats, etc. all make SamCart a great tool to create your checkout pages, track stats, and manage orders. While passing tags and allowing Infusion to do what it does best, all of the automation and segmenting.
My questions are:
Former Goldman Sachs option floor trader Ian Scott will present “Thinking like a Goldman Sachs Trader” on Dec 4th, 2014.
Mr. Scott has been the investment manager of Eventus Trading Partners, LLC and Eventus Capital Group, LLC since June 2008. He is the Fund’s primary trader responsible for all trading, pricing, execution and risk management. His expertise is in execution management and his ability to accurately price and gain from arbitrage opportunities in the market.
From 1999 to 2003 Mr. Scott was employed at Goldman Sachs (Spear Leeds & Kellogg) as an options trader on the floor of The American Stock Exchange. From 2003-2004 Mr. Scott was an options floor broker for ABN AMRO. From 2004 to 2008, Mr. Scott was an arbitrage trader for C&C Trading, a boutique trading firm in New York. Mr. Scott attended Baruch College in New York. He also took post graduate classes at The New York Institute of Finance.
While working at Goldman Sachs Mr. Scott held a Series 7, a Series 55 and a Series 63 license.
We will record this event and post it in our free members area.
Get your free login here if you don’t have one already.
We hope to see you in the webinar on Thursday.
After I upgraded to Mac OS X Lion several months ago, I was overall pretty happy. The one program that seems to have taken forever to update has been Telestream’s Episode 6. Episode does video transcoding but it’s the best one I’ve seen. I’m not a video production professional so Episode has many features I don’t use; however, it’s very intuitive and pretty fast. But it didn’t work with Lion… until now!
I just received an email from Telestream
The new version is Episode 6.2. You can’t upgrade it from Lion because previous versions crash Lion. You have to download it from Telestream and install it. Grab your Telestream login and go here to download the new version:
I normally don’t write about software updates but I know a lot of people are waiting for this, including me!
Here’s what the installation looked like
So far so good. The installer opened.
Double clicking on the package installer works fine. Here’s the Introduction page of the installer.
I need 204.2 MB of hard disk space. No problem. I just replaced my iMac’s drive with a 2TB drive.. hehe.
Yippee! I’ve been waiting to see this for months. It’s installed, but will it work and not crash? Let’s find out.
It works! Here’s the About dialog box. It’s nice to see my old friend working again.
I think Episode wins the prize for the software taking the longest to get Lion compliant. I didn’t mind too much as I used Handbrake while I waited for Episode. Now that Episode is back, I’ll have to compare it to Handbrake… but that’s another article for another day!
If you haven’t tried Episode yet, take a look at it. It’s really amazing software for transcoding video to distribution formats like MP4.
A friend of mine thought Google stock (GOOG) was going down after their earnings announcement. He knew he wanted to buy puts to take advantage of the anticipated downward movement in the stock price. He picked an option strike well below the current price of the stock. Google did move down after the announcement but not far enough. His puts expired worthless the next day. My friend didn’t understand how options are priced and how to use that information to pick a more appropriate strike for his put.
Let’s discuss the two components of an option’s price and the primary factors that influence them.
Intrinsic Value or real value
Intrinsic value of an option is the amount of real value the option has if it were exercised. This is the amount the option is in-the-money. For calls, it is the strike price minus the stock price. For puts, it is the stock price minus the strike price. The number is always positive. If an option is out-of-the money, the intrinsic value is always zero.
For example, if you have a stock trading at $105 and your Call strike is $100, the option has a real value of $105 – $100 = $5. If there is any time left before the option expires, the option will be priced higher than this difference in strike prices.
Extrinsic Value or time value
An option with any time left before it expires will have a higher price than its intrinsic value. The difference between the option price and the intrinsic value is called extrinsic value. Other names for extrinsic value are time value, time premium or fluff. This premium is what the option seller hopes to keep for his profit. The option buyer will slowly lose this time premium as the option gets closer to expiration. All options at expiration have zero extrinsic value. An option at expiration is either worth something or it expires worthless. Because traders prefer out-of-the money options, more options expire worthless each expiration cycle than options that expire with real (intrinsic) value.
Factors that change Extrinsic Value
The option pricing model includes variables for time to expiration, volatility, dividends and interest. Because we usually are only in the market a few weeks, we can assume interest and dividends don’t play a large role in the option prices we trade. That leaves two primary factors that influence option prices:
1. Time to expiration
The more time there is to expiration, the more time premium an option has. Options with more time premium are more sensitive to volatility changes. Any time spread should consider the effects of volatility changing. This is especially true for long term options, or LEAPS.
The volatility of an option is calculated from the option pricing model. All of the other factors are known, including price. Volatility is calculated and displayed as implied volatility. The price of the option implies a specific volatility. Option analytic software does this calculation for you for each option. Don’t try to calculate it by hand. You will notice that different software arrives at slightly different implied volatility values. These differences are due to different assumptions and using different inputs into different option pricing models. Stick with the same software so you are consistent.
Isn’t knowing the factors that effect extrinsic value a waste of time?
Not really. You know that options lose value as they get closer to expiration and that volatility affects the price of options. My friend who bought Google puts should have purchased puts with more time to expiration. Google releases earnings data after the market closes, the day before option expiration. I think they do it on purpose. Because options lose all time premium the following day, my friend would have been much better off purchasing an option with 30 days until expiration.
Volatility has more influence on longer term options. If you want to buy longer term options, make sure you buy them while volatility is low so you don’t pay for too much time premium.
Understanding option pricing isn’t difficult
Intrinsic value of an option is a simple difference between the strike price and stock price. Extrinsic value has many ingredients that go into it. If you are trading long term options, interest and dividends are more important. Implied volatility and time to expiration are the most important variables. Be aware of the factors that influence time premium when you trade.
Here’s your homework
Look at an option chain and calculate the amount of time premium for each at-the-money call and put for each of the next four to six expiration cycles. Compare the difference in time premium and notice how slowly it decays at first and then accelerates as you get close to expiration. For extra credit, look at options several strikes in and out-of-the-money and compare the decay to the at-the-money option.
The markets are bleeding red this morning. The Nikkei was down over 10%. The German DAX was down over 4%. S&P futures are down over 34 as I write this and Treasury yield have plunged. The world financial markets are in panic mode. Risk aversion is on and everyone is fleeing to the US Dollar.
So what does that mean to an option trader?
You’ll experience fast moving markets today. Bid/ask spreads will widen and it will be difficult to get filled at the mid-price. Volume will be heavy and firms with help desks will possibly have delays for you to speak to someone if you need help. With heavy volume, broker platforms will struggle to keep up. You may see transient errors in account buying power, margins etc.
What can I do?
– The most important thing to know is if you need to close a short option now, use market orders. Limit orders don’t work very well in fast markets. Just bite the bullet and stop your bleeding.
– Don’t chase a bad position. If you’re at or past your maximum loss, don’t fool around trying to save your position. You could easily take a massive hit to your account that will take a long time to recover. Don’t do it. Honor your max loss and get out.
– Don’t react in a panic mode. You seldom make good trading decisions under stress. Try to neutralize your positions to give you time to think, and the market time to settle down.
– We use probabilities for income type types. Panic markets aren’t normal and we probably shouldn’t be trading during them unless you like risk. Consider reducing your positions or going flat until the market settles down.
Just be careful. Don’t rush. Don’t make decision under stress. Don’t chase bad trades. Honor your max loss and use market orders to close positions if you absolutely have to close something today.