Friday, April 29, 2011

Trade of the Day: XLF July $14/$15 put front spread

The Trade
A trader sold 100,000 July $14 puts at $0.06 and bought 50,000 July $15 puts at $0.14 for a debit of 0.02 or $100,000.

Thursday, April 28, 2011

Song of the Day: Ratatat vs. Marvin Gaye - Ain't No Drugs High Enough (Jane Doze Remix)

Trade of the Day: Teradyne June $16/$18 call spread 3,000x

The Trade
A trader sold 3,000 June $18 calls at $0.25 and bought 3,000 June $16 calls at $1.10 for a debit of $0.85 or $255,000.

Option Flow Recap April 28th

Macro / Thematic

XLF Financial Select Sector SPDR  - ~37,000 of the June 16 / August 15 put spreads traded with the investor collecting $0.025.

Yesterday... Today and Tomorrow (Trader Psychology)

There are two days in every week about which traders should not worry, two days which should be kept free from fear and apprehension. 

One of these days is YESTERDAY, with its mistakes and cares, its faults and blunders, its aches and pains.  YESTERDAY has passed forever beyond our control.

All the money in the world cannot bring back YESTERDAY.  We cannot undo a single act or trade we performed; we cannot erase a single word we said.  YESTERDAY is gone.

The other day we should not worry about is TOMORROW with its possible adversities, its burdens, its large promise and poor performance.  TOMORROW is also beyond our immediate control.

TOMORROW'S sun will rise, either in splendor or behind a mask of clouds - but it will rise.  Until it does, we have no stake in TOMORROW, for it is yet unborn.

Miami International to Introduce 10th U.S. Options Exchange - Bloomberg

The more new options exchanges, the better in my opinion. Bring on the rebates and incentives! The increased competition could force laggards like AMEX and ISE to adopt some maker/taker characteristics.

Miami International to Introduce 10th U.S. Options Exchange - Bloomberg

No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.

Song of the Day: Wallpaper. - #STUPiDFACEDD

Fight of the Century: Keynes vs. Hayek Round Two

“Fight of the Century” is the new economics hip-hop music video by John Papola and Russ Roberts at

According to the National Bureau of Economic Research, the Great Recession ended almost two years ago, in the summer of 2009. Yet we’re all uneasy. Job growth has been disappointing. The recovery seems fragile. Where should we head from here? Is that question even meaningful? Can the government steer the economy or have past attempts helped create the mess we’re still in? 
In “Fight of the Century”, Keynes and Hayek weigh in on these central questions. Do we need more government spending or less? What’s the evidence that government spending promotes prosperity in troubled times? Can war or natural disasters paradoxically be good for an economy in a slump? Should more spending come from the top down or from the bottom up? What are the ultimate sources of prosperity?
Keynes and Hayek never agreed on the answers to these questions and they still don’t. Let’s listen to the greats. See Keynes and Hayek throwing down in “Fight of the Century”.
“Fight of the Century” Lyrics.

Citi Research 4-28

TEDxSanJoseCA - Steve Mazan - It's Never too Late to Chase your Dreams

 Pretty funny stuff. Also inspiring...  What are you dying to do? 

Government Attacking Poker Is Idiotic: Learn from Players and Traders

There are  a lot of great quotes about how trading and poker are similar in the this clip... here are a few:

"Just cause you lose money doesn't make it a bad bet"

"You have to make decisions quickly and under pressure."

"Focus on process verses outcome."

Use Tape Reading to Improve Trading Performance

Tape reading is a very important topic for traders.  It's more of an art than a science and experience is key.  This is more of a video for beginners as the concepts are very basic but I'm always interested to hear how other traders do it.  Ken Calhoun is a momentum guy and he trades stocks so take it for what its worth.

Wednesday, April 27, 2011

Song of the Day: Eminem - A Drop In The Ocean (Ft. Kanye West, Wiz Khalifa & Ron Pope)

The End of the Dollar?

Fascinating global round table on the future of economic competition.  Great video from Big Think.  Everyone is bearish...So I'll ask the question is it time to start thinking bullish? I'll wait for the market to show me but I'm very focused on the dollar and a possible snap back rally. 

No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.

Derivatives Firms Face New Capital Rules

Full article here: Derivatives Firms Face New Capital Rules -


"The $600 trillion derivatives market, long known for its freewheeling ways, is slowly being tamed."

"In the lead-up to the crisis, investors bought billions of dollars’ worth of credit-default swaps as insurance on risky mortgage-backed securities. When the underlying mortgages soured, the American International Group and other companies that sold the swaps lacked the capital to honor their agreements.
Under the commission’s new plan, those firms would have to put aside enough cash to cover unforeseen calamities. Regulators, until recently, had little authority to set any rules for this risky market."

"The commission on Wednesday also voted to reopen or extend for 30 days the public comment period on its earlier rule proposals. The agency plans to complete most Dodd-Frank rules by the fall."

doesn't sound like they are really addressing the problem...

Option Flow Recap April 27th

Macro / Thematic

KRE SPDR KBW Regional Banking (ETF)  - 10,000 of the June 22 puts were bought for $0.09

SPY SPDR S&P 500 ETF - 21,200 of the July 145 calls were bought for $0.31 against a sale of 4800 of the July 125 puts at $1.37

XLF Financial Select Sector SPDR (ETF) - 35,000 of the June / July 16 put spread was bought for $0.14.


Song of the day: Chase and Status ft. Maverick Sabre - Fire In Your Eyes

What do you guys think... could this be the new warm up song for the Golden State Warriors or for your trading day? 

Contrasting Tthe April And March FOMC Statement


Why Water Will Never Be the Next Oil

I read this great article on Freakonomics about why the most abundant, liquid resource on the planet, makes for a very illiquid asset when it comes to markets.  You can read the full version here: Freakonomics » Why Water Will Never Be the Next Oil: A Guest Post by Charles Fishman

Tuesday, April 26, 2011

Option Flow Recap April 26th

Macro /  Thematic

VIX saw 65% the normal volume with 165K calls and 37K puts traded.  The most active VIX options were: June 25C (19K), May 19C (16K), May 18C (13K), July 25C (10K), June 22.5C (9.5K).  The top open interest positions are: May 30C (187K), May 25C (179K), Jun 32.5C (156K), June 18P (151K), May 18P (135K).  VIX closed down 15 to 15.62.

EEM iShares MSCI Emerging Markets Indx  – 17,500 of the January 42 puts were bought for $1.89.

SLV iShares Silver Trust (ETF) – 10,000 of the May 37 / 35 1x2 put ratio spread traded at $0.03.

TLT iShares Barclays 20+ Yr Treas.Bond (ETF)  TLT May $94/$97 1x2 ratio spread. A trader sold 10,000 May $97 calls at $0.13 and bought 5,000 May $94 calls at $0.68 for a debit of $0.42 or $210,000.

UNG United States Natural Gas Fund, LP - Trader bot over 8K October 14 calls for .42

Trade of the Day: TLT May $94/$97 1x2 ratio spread

The Trade
A trader sold 10,000 May $97 calls at $0.13 and bought 5,000 May $94 calls at $0.68 for a debit of $0.42 or $210,000.

Inspiration from Sports: Chris Paul

Inspiring stuff.

"You can't go somewhere you haven't been; without doing something you've never done."

Market Analysis for 2011--Jim Jubak's Big Picture

Senior Markets Editor for the Money Show

No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.

How to Find Trades in the First Hour--Trade the Gap with Scott Andrews

No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.

Goldman Derivative Desk Trading Top Ideas

Goldman Derviative Desktop
No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.

Life is not about how hard you hit, it's about how hard you can get hit and keep moving forward

Ira Glass on Storytelling

Interesting to hear Ira talk about the importance of doing a lot of work, even if its not your best work in order to eventually reach your highest potential.  


Monday, April 25, 2011

Song of the Day: Strange Talk - Climbing Walls

Dope new band,  "Strange Talk is an indie synth-pop Melbourne band that formed in February 2010. The band has been writing an EP over 2010 and plans an official release later in the year. The band's sound has been heavily compared to Phoenix, but also Passion Pit and Cut Copy." 

Option Flow Recap April 25th

Macro / Thematic

EEM iShares MSCI Emerging Markets Indx – A total of 66,000 of the May 51 / 53 call spreads were sold today at ~ $0.413. It appears to be closing transactions for the second day in a row.  (Always pay attention to profit taking)

Follow Up: BAC - Right Now (Bank of America Inc.)

Wanted to take a quick second to do something we don't usually do, which is review a previous post and connect some dots. Today BAC made the move many were anticipating - a break above the declining tops line and a run towards the gap. I'm disappointed to say that despite having stalked this trade, I did not cash in nearly as much as I would have liked. The move off the open was sharp and quick and I would have preferred to buy the early pull back. One axiom we hear a lot is the market moves in the direction that hurts the most people. Quicker moves like this can often be indicative of shorts getting squeezed. The rapid buying and the lack of sellers causes a bit of a panic and that looks like what might have happened today.

Here's a look at how it went down.

I'm not sure BAC is done basing, but it will be very telling of short interest if it gets squeezed into the gap tomorrow. If it does get into the gap, I will most likely be looking to fade the gap fill for a quick trade. Good luck, and remember to stay light and tight.

Trade of the Day: NetApp January 2013 $55/$45 bull risk reversal

The Trade
A trader sold 5,500 January 2013 $45 puts at $5.74 and bought 5,500 January 2013 $55 calls at $8.09 for a debit of $2.35 or $1,292,500.

Freeport-McMorRan Copper & Gold

No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.

A Look Inside the UA E39 - Bio Metric Data

This is dope! I wish they had something like this specifically for trading. 

Sunday, April 24, 2011

Song of the Day: Waka Flocka - Hard In Da Paint (Bellizio Remix - Crizzly Edit)

I go hard in the mother F#####'n paint.
Its the Blake Griffen theme song... play this on mute while you listen to the above

Thursday, April 21, 2011

Song of the Day: Don Diablo Feat. Dragonette - Animale (Oliver Remix)

Kathryn Schulz: On being wrong

How Banks Spin Their Earnings -

I hope none of our readers plan trades around headlines from earnings announcements. This is another example of how fundamental data from companies can be manipulated and should never be the basis for a trade. Based on how volatile the first 15 mins of trading was in $C on Monday, I would say more than a few people were confused by the news. Plan your trade and trade your plan!

How Banks Spin Their Earnings -

No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.

How Citigroup uses social media in its quarterly reporting | IR Web Report

very interesting article. I didn't know that C had a twitter account, but as the author points out the tweets came a little late so perhaps there wasn't time value to following. Nevertheless, its thought provoking to think about how social media will transform the financial services industry. How about your thoughts?

How Citigroup uses social media in its quarterly reporting | IR Web Report

No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.

BAC - Right Now

Here's what I am watching

Baby break of today's opening range (bullish bias but not overwhelming)
Gap up above that could draw price higher
Declining tops line resistance
Divergence in price and MACD over 3 days that makes me wonder if a near term bottom is forming.

Good luck!

Wednesday, April 20, 2011

Song of the Day: Led Zeppelin Vs. Gramatik - Stairway To Hip-Hop Heaven

Good music to research options to... enjoy

WOW Report

No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.

Option Flow Recap April 20

Macro / Thematic

TLT iShares Barclays 20+ Yr Treas.Bond – 50,000 of the June 101 calls were sold at $0.14 and the September 98 / 101 call spread was bought for $0.46, also 50,000x. The September call spread was bought to open and the June calls appeared to be a closing transaction.


LVS Las Vegas Sands Corp. – 10,000 of the May 40 puts were bought for $0.45. The puts were bought to open.

DISH DISH Network Corp – 10,000 of the May 24 calls were sold at $1.15. The calls were sold to open.

SVU SUPERVALU INC. – 3000 of the October 13 calls were bought for $0.55. The calls were bought to open.


WMB Williams Companies, Inc. – 35,000 of the May 17 / January 22.5 call spread was sold at $5.05. The May calls were sold to close and the January 22.5 calls were bought to open.

ENER Energy Conversion Devices, Inc. – 22,000 of the September 1.5 puts were bought for $0.35. The puts were bought to open.

Industrials / Materials

TYC Tyco International Ltd. – 11,000 of the May 47 / 52.5 risk reversals traded at $0.30. The May 52.5 calls were bought for $0.54 and the May 47 puts were sold aat $0.85 to open versus 48.86 stock

VALE – 12,000 of the January 35 / 45 1x2 call ratio spread was bought for $1.86 12,000 x 24,000. It appears to be an opening position tied to 300,000 shares.

ABX Barrick Gold Corporation   5000 of the May 55 puts were bought for $1.67 versus $55.23 stock. The puts were bought to open.


BMC BMC Software, Inc. – 5000 of the May 52.5 calls were bought for $0.575. The calls were bought to open.

VZ Verizon Communications Inc. – 10,000 of the January 32 / 42 bullish risk reversal traded for $0.33. The trade appears to be opening and tied to 492,000 shares at $37.89.


PRU Prudential Financial, Inc. – 4500 of the January 65 / 72.5 / 80 call fly was bought for $1.30

WFC Wells Fargo & Company – 9000 of the January 20 / 30 put spreads were sold and 9000 of the January 35 calls were bought, with the investor collecting $2.40 on the package.


ARIA Ariad Pharmaceuticals, Inc – 10,000 of the May 3 / November 5 put spread was bought for $0.25. The trade appears to be a roll from May to November up and out.

CYH Community Health Systems – 7500 of the May 24 / 28 bearish risk reversal was bought for $4.15. The trade appears to be opening and tied to 750,000 shares at $31.60

*Special thanks to Flotilla Partners, Option Radar, BMO Capital, MEB Options, LiveVolPro, CBOE, Option Monster, and all of the options desks and traders we work with to provide the option flow!

No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.

A Quick Look at the Charts : BAC (Bank of America) & C (Citigroup Inc.)

Experimenting with posting a few 60 min charts here. Let us know how you do/do not like it...

A quick look at the charts - Bank Of America and Citigroup Inc.

Trade of the Day: Alcoa June $18/$16 bull risk reversal 7,500x

The Trade

A trader sold 7,500 June $16 puts at $0.42 and bought 7,500 June $18 calls at $0.26 for a credit of $0.16 or $120,000.

As you can see from the graph above, the spread has unlimited risk to zero and unlimited profit potential. Since the spread is done for a credit, the underlying must be below $15.84 for the spread to start losing money. Alcoa closed today at $16.64. The trader is bullish in Alcoa, and decided on the risk reversal because selling the puts more than financed the purchase of the calls.

The line shown above is the break even price. Looking at the daily stock chart, you can see that the underlying bounced right off the break even price level on Monday. Therefore, the trader executed this trade betting that Alcoa will not break the $15.84 support level.

Alcoa traded 79,218 contracts today compared to average daily volume of 64,104. The 52-week range is a low of $9.81 and a high of $18.47.

No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.

Tuesday, April 19, 2011

Song of the Day - The Hours - Ali In The Jungle [Dead Errant Soul Remix]

One of my favorite songs of all time... just found this remix and can't stop playing it... 

Eighteenth Century Trend Following and More History

Great post on the origins of a trading mantra. You can read the full article here: Eighteenth Century Trend Following and More History | Au.Tra.Sy blog - Automated trading System

"Proverbs travel through generations and their origins get lost, so I was quite interested when I found out about an 1838 book, The Great Metropolis, Vol II by James Grant, tracing back the saying to eighteenth century British economist and trader David Ricardo (I actually thought that this legendary trading maxim was introduced by Jesse Livermore in Reminiscences of a Stock Operator)."

“Cut short your losses,” – Let your profits run on”

Most Marketers Plan to Increase Social Media Spend This Year

Not many people know this but I graduated with a Marketing degree.   Long story how I got into finance.... but here was some interesting stats I found about advertisting... LEAPS on twitter and Facebook if they were only public would be fun...

read the full article here: Most Marketers Plan to Increase Social Media Spend This Year [STUDY]

Option Flow Recap April 19th

Macro / Thematic

KBE SPDR KBW Bank - 40,000 December 30 calls sold at 62.5 cents to buy 50,000 June 26 calls at 50 cents. The spread is tied to 1.4 million shares at $25.10.  Pro trade! Long upside gamma but hard to tell if they shorted stock or just did a stock replacement.

How to Overcome Burnout When You're a Superachiever

How to Overcome Burnout When You're a Superachiever: "How to Overcome Burnout When You’re a Super-achiever"

here are the highlights: 

  • Take breaks between big projects. Burnout puts your mind and body in a weakened state, so avoid jumping from one stressful, time-consuming project to the next in order to give your mind and body a chance to recover.

  • Socialize outside your professional group. This can provide fresh perspectives, stimulate new ideas, and help you discover previously undiscovered resources.

  • Reinforce effort, not outcome. Not even the best players hit home runs every time they get up to bat. Remember to reinforce yourself for trying rather than only for the end result.

  • At the end of the day is all about BALANCE.  I'm personally working on this right now... and I imagine it will be something that can always be improved. 

    Trade of the Day: Walt Disney bearish put vertical

    The Trade
    A trader sold 4,000 May $37 puts at $0.16 and bought 4,000 May $40 puts at $0.63 for a debit of $0.47 or $188,000.

    8 Health Benefits of Walking in the Morning

    I run or walk to work everyday.  Its interesting to see the benefits.  For the full article click here: 8 Health Benefits of Walking in the Morning

    1. Better Blood Circulation
    2. Muscle Strength and Stamina
    3. Blood Sugar Control
    4. Improved Skin
    5. Better Sleep
    6. Improved Metabolism
    7. Better Mental Health
    8. Vitamin D Absorption

    Twitter Will Kill TweetDeck | Lance Ulanoff |

    Are you a trader using tweetdeck like us? I really hope they don't kill it!

    Twitter Will Kill TweetDeck | Lance Ulanoff |

    No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.

    Hoops 2.0: Inside the NBA’s Data-Driven Revolution | Playbook

    The reason I wanted to share this article is because I think it is representative of how other performance based professions are advancing and adapting using technology to achieve success in a more competitive environment. There is lots of technology available to traders right now that wasn't available a year ago. But there are also technologies that have not yet been developed that could change how we trade. We are thinking about these technologies at SeaofOpportunity. Share with us your thoughts!

    Hoops 2.0: Inside the NBA’s Data-Driven Revolution | Playbook

    No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.

    Roubini on the 'Brick Wall' Chinese Growth May Hit

    Worth Reading: Roubini on 'Brick Wall' Chinese Growth May Hit - MarketBeat - WSJ

    Monday, April 18, 2011

    Option Flow Recap April 18

    Macro / Thematic

    UUP PowerShares DB US Dollar Index Bullish - 10,000 of the May 22 calls were bought for $0.15.

    EEM iShares MSCI Emerging Markets Indx  - 6800 of the May 47 puts were bought for $0.99.

    Trade of the Day: Morgan Stanley 3 way July bull vertical risk reversal

    The Trade
    A trader sold 2,500 July $24 puts at $0.61, bought 2,500 July $27 calls at $1.14, and sold 2,500 July $30 calls at $0.28 for a debit of $0.25 or $62,500.

    Saturday, April 16, 2011

    Video: Losing a shoe will not keep Thaddeus Young from D’ing up - Ball Don't Lie - NBA Blog - Yahoo! Sports

    How many times have you felt like things aren't going your way during the trading day? Do you keep going?

    Video: Losing a shoe will not keep Thaddeus Young from D’ing up - Ball Don't Lie - NBA Blog - Yahoo! Sports

    No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.

    10 Things You NEED to Do if You Were Hired Today

    Great post by James Altucher from The Altucher Confidential.  Most of the article is below the full article can be found here.   Basically complacency kills and if you're going to get a job you need to be on top of you game.  Enjoy: 

    "The woman right next to me was alive one second, then a taxi came up on the sidewalk of 42nd Street between 6th and 7th Avenue, hit her and veered off, and now the woman was dead. This happened on the first or second day of my job at HBO. I tried to call 911 on the payphone (there were still payphones in August, 1994), and then I had to go. The woman was dead.
    And I had to go to work.
    I loved HBO like I would love a parent. I wanted them to approve of me. And kiss me as I went to sleep at night.
    Before I got the job offer to work there, I would watch HBO all day long. My friend Peter and I would watch HBO or MTV for 10 hours straight. I’d go over to his house around 1pm in the afternoon, and by 10pm we would look at each other and say, “What the hell did we just do.” Everything from the The Larry Sanders Show on HBO to Beavis & Butthead on MTV. We couldn’t stop.  I loved the product. I wanted to work there.
    10 Rules If You Are Hired Today
    Rule  No. 1: Love the product. You have to love the current output of the company. If you work at HBO, love the shows. Watch every single show. No excuses. If you work at WD-40, know every use of WD-40. Make up a few more that nobody ever thought of. If you work at Otis Elevators, understand all the algorithms for how the elevator decides which floors to stop on when. If you work at Goldman Sachs, read every book on the history, study every deal they’ve done, know Lloyd Blankfein’s favorite hobbies and how he rose through the ranks.  You have to love the product the way Andre Agassi loves playing tennis or Derek Jeter loves playing baseball.
    When I started at HBO, I would every day borrow VHS tapes from their library. I watched every show going ten years back. In my spare time, I’d stay late and watch TV. I’d watch all the comedians. I even watched the boxing matches that initially made HBO famous. Which leads me to…
    Rule No. 2: Know the History. When my first company, Reset, was acquired by a company called Xceed, I learned the history of the mini-conglomerate that Xceed was created out of. There was a travel agency for corporations. I visited them in California. There was a burn gel company. I visited them and met all the executives and learned the technical details of how the gel was invented. There was a corporate incentives company. I met with them to see if any of their clients could become my clients.
    At HBO, I learned how Michael Fuchs (the head of HBO Sports at the time; later CEO of HBO) in 1975 aired the first boxing match that went out on satellite. And how Jerry Levin (the CEO of HBO, later CEO of Time Warner) used satellites to send the signal out to the cable providers. It was the first time that had ever happened. Ted Turner was so inspired that he turned his local TV affiliate, TBS, into a national TV station, and the rest became history.
    Rule No. 3: Know the history of the executives. At HBO, I studied the org chart religiously. My title was “programmer analyst, IT department” and yet I was always asking around: how did John Billock become head of marketing (he trudged around house to house selling HBO subscriptions in Louisiana when Showtime started up, for instance, decades earlier). Where did my boss’s boss’s boss’s boss work before arriving at HBO (Pepsi). Where did the head of Original Programming get his start? (He was a standup comedian, later CEO of HBO, before being forced to quit after choking his girlfriend in a Las Vegas parking lot.) It was like reading about the origins of all the superheroes. I was a fanboy and my heroes were the other executives. I wanted to be one of them. Or better.
    Same thing: know all of your colleagues and what their dreams and ambitions are. Get to work two hours before they get to work. If they need favors, do them. You have a whole two hours extra a day. You can do anything.
    Rule No. 4: Make your boss look good. Your entire job in life is to make your boss look good. You don’t care about yourself. You only want your boss to get promotions, raises, etc. Remember, you can never make more than your boss. So the more he makes, the better he does, the better you will do. It’s the only way to rise up. Work hard, give him full credit for everything you do. Don’t take an ounce of credit. At the end of the day, everyone knows where credit belongs. But even then, thank him for everything and direct all credit back to him (or her). Here’s how you make your boss look good:
    • Get to work two hours before him. If that means you have to wake up and go in at 5am, then do it. Two extra hours of work a day is an extra 500 hours of work a year. None of your co-workers can compete with that.
    • Walk with him to his car, train, etc when he leaves work. You need to know his goals, his initiatives, his plans, his family troubles, etc.
    • And, again, give him full credit for everything. And thank him regularly for the opportunity to do the work you are doing.
    Rule No. 5: Know all the secretaries. It’s a cliché but the secretaries run the company. They control all of the schedules. They dish out all of the favors. Take as many secretaries out to lunch as possible. Not just in your department but in every department. Particularly HR. HR knows all of the gossip. Knows everything that is happening. It’s not so hard to do this. First off, HR gives you all of your intro material when you join the company. Ask those people out to lunch after you’ve settled in for a few weeks. If someone writes an internal company newsletter, ask that person to lunch. Ask your boss’s boss’s boss’s boss’s secretary out to lunch. Nobody will think you are going over their head. You’re asking to lunch “just” a secretary. This was invaluable to me at every company I’ve ever worked at.
    Rule No. 6: Constantly test your value on the market. The job market is like any other market. There’s supply and demand. And you’re just an item for sale at the great bazaar. Every year you need to find out what your value is on the market. For one thing, the best way to get an increase in salary and status is to move horizontally, not vertically. Second, you don’t want to get inbred. A good friend of mine was in HBO’s marketing department for 17 years. I set up a dinner between her, me, and the CEO of an advertising agency that was hiring. The CEO was one of my closest friends. Still, she couldn’t hire my HBO friend. “She’s too inbred,” she said. “She will never be able to get the HBO way of doing things out of her head.”
    When I was at HBO, I was constantly talking to people at other companies. I had lunch with the top people at Showtime. I knew people from all the other divisions of Time Warner. I was always asking people to lunch or breakfast. I would get offers from the banking industry. I would try to work within different divisions of HBO. Every time I got another offer, I got another raise and promotion at HBO. Sometimes substantial (up to 35 percent increases). My bosses would resent me for it, but then go back to “Rule #4,” and often they would get raises also.
    Rule No. 7: Study all the marketing campaigns. In 1996, they switched their slogan to “It’s not TV. It’s HBO.” That slogan lasted for 13 years. Before that it was “Simply the Best,” then “Something Special’s On.” When they switched to “It’s not TV,” Eric Kessler, the head of marketing, gave a talk on how they came up with the slogan. All his employees were in the auditorium. And me from the IT department. Nobody else would go with me. I knew every slogan HBO ever had.
    Rule No. 8: Study the industry. What made HBO different from Showtime? From Cinemax? From non-pay cable? From broadcasting? I read every book about the history of TV I could find. I would go to lectures at the Museum of Radio and Television on 52nd Street (the best was the day that members of the MTV show The Real World gave a panel. After the panel, I followed one group of other people in the audience for 30 blocks while they talked about the panel and the show. I wanted to break in so many times. They would be my new best friends. We would have parties around showings of The Real World. But I was too shy, and eventually they all split off in different directions, leaving me alone). Jessica Reif Cohen was the Merrill analyst covering media. I knew nothing about stocks. But I read everything she wrote and would scan the Wall Street Journal for mentions of her name.
    When I was trying to sell my first company, Reset, I called every company in the industry. Omnicom, Razorfish,, etc. etc. I read every SEC filing so I would know the nuances of all their deals and financings.  When I was building Stockpickr, I became obsessed with the mechanics of how Yahoo Finance worked and the ways in which she (Yahoo Finance is a “she,” and I love her) delivered traffic to all of her media sources. With HBO it was fascinating to me because at one point the CEOs of Showtime, Time Warner, Universal, Viacom, Fox Sports, etc. were all former executives at HBO.
    Rule No. 9Become the company. I was a lowly programmer in the IT department. We were so far from the normal business operations of the company that they even put us in a different building. But that didn’t matter to me. I WAS HBO. That was my mantra. I became so absorbed in every aspect of the company that I knew that any idea I had would be a good idea for the company. At least I felt this (not sure if anyone else did). I never said, “I think this,” I said, “We should do this.” HBO and I were a “We.” Inseparable. Until you have that feeling of unity with the company you work for, you can’t rise up. Key, though: when you have an idea, make sure you know how to execute the idea also. In detail. Ideas are a dime a dozen. And execution is worth a million dollars. And I mean that specifically, if you execute on a good idea, you’ll make a million dollars or more from it.
    Rule No. 10Leave. All good things must come to an end. From the day you start, you need to plan your exit. Not like in rule #6, “Know Your Value” where you are trying to figure out your corporate salary value. “Leave” means something different. It means you’re going to say goodbye forever. If you master Rules #1-9 at a company, then you’ll know enough about the company and industry to start your own company. To either become a competitor or a service provider. And you will have built-in customers because your rolodex will be filled with people from the industry. If you constantly think like an entrepreneur from the instant you walk into your cubicle on day one of your job, then you will be constantly looking for those missing gaps you can fill. This is how you jump into the abyss. You make sure the abyss has a customer waiting for you.
    I did everything wrong my first few months at HBO. I didn’t know New York City. I didn’t know corporate culture at all. I wore the same suit five days in a row until I realized nobody else was wearing a suit, and I never wore one again. I didn’t have the requisite skill set to survive at my job (they had to send me to a remedial programming school despite the fact that I had majored in programming AND went to graduate school for computer science).
    I was obsessed with the Internet, and HBO didn’t even own at the time. My boss’s boss’s boss would say to my boss, “get him away from that Internet stuff and onto some real work.” One time my boss came into my cubicle and, with everyone listening from every other cubicle, said to me, “We want you to succeed here but you need to know more or else it’s not going to work out.” It was very embarrassing, and nobody around me would meet my eyes for the next week or so. I was the walking dead. I was sure I was going to get fired every day.
    But I survived then. And every day since."