I really don’t know anything about “Price Points.”


I’m certain that there’s a fairly well established discipline that melds economic theory with behavioral science to explain at what point people will be spurred into action.


Call it cost/benefit. Call it risk/reward. Whatever.


I’m not much of a consumer, but I do occasionally get feelings that have to be requited.


Oh, and I buy things, too, sometimes. That desire tends to be inelastic, as opposed to the diminishing elasticity related to the other desires.


I’m not really certain that I’ve ever been intrigued to buy an item from a retailer just because it dropped its price, other than that DiGiorno Pizza and chicken combo that was on sale a few weeks ago, yet wasn’t last week.


Last week, I chose not to buy it, as I made a decision, on some level that’s not entirely clear to me, that the cholseterol hit wasn’t worth the retail price du jour.


Or is it Di Gior?


Actually, it wasn’t the sale price that got me to buy it initially. In fact, prior to that day, I’d never tried one of their products. It just happened that on the day in question the product was prominently displayed and the price seemed reasonable. I never had any idea what the usual price was.


Best of all, both the pizza and chicken actually tasted good. Despite the fact that I’m very far removed from my Bronx roots, I really enjoy good pizza and accept both the short term consequence of heart burn and the longer term consequence of death.


There must be some kind of price point buried in there somewhere, especially when it comes to those longer term considerations.


Price PointsWhat I discovered today, though, was that there was a clear price point for my “Option to Profit” book.


Until about 12 AM PST today, you can get it for free to read on your Kindle.


Amazon must know what they’re doing, because in just the first 8 hours, more people have demonstrated that their price point is “free,” at least when it comes to what I’m offering.


That seems odd, not because there’s any great value to what I’m offering, but because at the very same time, for some inexplicable reason, people are signing up to get this blog delivered to their Kindle. They’re willing to pay a monthly fee for what they can read for free, or more than likely, choose not to read at all.


This shouldn’t come as a complete surprise, since a couple of months ago, the book became enriolled in Kindle’s lending library program, where Amazon Prime members could download the book for free.


Free.


I’m pretty good at math, but I don’t think that volume can offset that low price.


As much as I profess not to understand price points, I put that gap in my knowledge into action, as well.


Each and every decision to buy or sell a stock or to sell an options contract has that price point consideration.


Ultimately, it’s all about greed and the need to feel victorious over someone else.


In the markets, what’s potentially so great about the victory is that the vanquished is so totally anonymous.


You may have seen that video on Tosh.0 when a man sitting across the table decides to push the button that will kill some person unknown to him, long before he is even aware of the game’s details.


What I do know is that price point for stocks is a moving target and there doesn’t have to be a eason for the movement.


Maybe “Brownian Motion” offers the best explanation for the manner and direction of market and stock movements.


On Monday, I thought that I’d gotten good prices on my purchases of shares in Morgan Stanley, Mosaic, Freeport McMoRan, Cablevision and the SPDR Energy ETF.


Barely 24 hours later the “smug feeling” became the “schmuck feeling” as the prices just went off of a cliff, for little to no real reason other than a need to seek out greater entropy


But contrary to revering greed and exploitation, if you were one of those cheap bastards that picked up a free copy of the book, you’ll see that I revile those.


Sure, price is a factor, but not if it precludes you from getting into the game.


That’s especially true when it comes to negotiating the bid/ask bridge. I’m more than happy to make a winner out of the one buying from me or selling to me, than risk the chance of staying on the sidelines.


Since I don’t follow the Bernard Baruch rule of selling shares if they hit a 10% loss, I have time to watch those price points that everyone else predicates their actions upon, as they come closer to the only price point that I care about.


That price point simply has to satisfy the buy low/sell high criterion.


I don’t know who first codified that strategy, but it has to rank way up there on the list of ideals to live and die by.


As great of a credo as that is, sometimes the inelasticity of my personality makes me go counter to that very sound advice. The real evidence of my inelastic need usually occurs on Thursdays and Fridays.


Those are the days that I collect crumbs.


This week is likely to be one of those times that I debase myself just to get the fix. I need that fix because so far, as of noontime, this week I’ve only sold call contracts on Sprint. That leaves me with lots of “non-performing” holdings.


As an aside, I would never purchase shares of Sprint, or anything else, at those kind of price levels.


In the case of Sprint, all of my shares have actually been purchased with book royalties, back during those wonderful times when the book wasn’t being offered for free.


SInce I don’t really buy stocks to see them dance for me, I need them to quietly create income by just sitting there, and letting others get some thrill from the options contracts that I graciously sold to them at their bid price..


As the week comes closer to its end, I start getting a little antsy to create the income and start the process of trying to squeeze out whatever pennies may be out there by selling call contracts expiring within a couple of days.


After Tuesday’s impersonation of 2011, I have, unfortunately lots of opportunity to scrounge for those crumbs.


The question becomes “at what price?”


At what price is demeaning yourself for the crumbs worth the crumbs themselves?


Sometimes that answer is easy, especially nearing the end of the tax year, when strategic losses may be helpful. But as far as I know, the IRS, even with all of this campaign talk of restructuring the tax code, isn’t considering a Jewish calendar to define the beginning and end of the tax year.


Based on past experiences, I know the answer to that question.


I’m willing to sink to pretty low levels.


Bernard Baruch would roll over in his grave if only he cared and was alive to actually have cognitive events.


In the meantime, I’ll likely exercise some actions that are devoid of cognition.


Besides, what’s the point of price anyway, if there’s no one to buy from or sell to?


 

 

 

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Recent Trades Security Type Action Type
March 7, 2012 S Call STO Monthly
March 5, 2012 FCX Stock Added
March 5, 2012 CVC Stock Buy
March 5, 2012 MOS Stock Buy
March 5, 2012 MS Stock Added
March 5, 2012 XLE Stock Added
March 3, 2012 BP Puts Expired Weekly
March 3, 2012 FCX Calls Expired Weekly
March 3, 2012 FCX Calls Expired Weekly
March 3, 2012 GMCR Puts Expired Weekly
March 3, 2012 HAL Calls Expired Weekly
March 3, 2012 MS Calls Expired Weekly
March 3, 2012 RIG Puts Expired Crumbs
March 3, 2012 RIMM Call Expired Weekly
March 3, 2012 CHK Puts Assigned Weekly
March 3, 2012 GS Calls Assigned Weekly
March 3, 2012 HAL Puts Assigned Crumbs
March 3, 2012 FCX Puts Assigned Weekly
March 2, 2012 MCP Call STO Weekly
March 2, 2012 MS Call STO Weekly
March 2, 2012 GMCR Call STO Weekly
       

  

 

 

 

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