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Thursday Morning

Release the T. Boone!

That’s right, whenever they need a Super-Mega Oil Pump they roll out the big guns and no one shoots their mouth off better than that impartial predictor of peak oil – T. Boone PickensMr. T has 59,800 Google pages devoted to his bi-monthly statements that oil will go to $100 – yet EVERY SINGLE TIME he says it, CNBC (Criminal Narrators Boosting Crude) treats it like it’s a story!

Who better to give viewers a "fair and balanced" perspective on energy investing than a man who made $1.6Bn last year on oil and gas plays?  Logic would dictate that he probably didn’t make that much money by tying up just a few million dollars in the energy sector so T. Boone is probably the world’s single largest Roach in the Energy Motel yet the wheel him out on CNBC (Criminal Narrators Boosting Crude) whenever they have problems making a technical, like yesterday’s failure to break away from $64.

This is a man who, last April, said $5 a gallon gas would be a good thing for America.  What a patriot!  A patriot, who, by the way gave $5M in "soft money" to launch "Swift Boat Verterans for Truth" in the last election.  Could it be a coincidence that he’s back just when SU, his largest single holding failed to break over $77 after a DB upgrade?  Yesterday SU gapped over the descending 200 dma at $75.32 and holding that level is critical to establishing a better chart pattern so keep that in mind as they run his clip 20 or 30 times today.  SU MUST have oil over $55 to be competitive with other energy producers, $40 oil would cost that company half it’s market cap at least.

As Options Sage pointed out in comments this morning, what can we really expect from "Financial News" when our regular news is such a joke?

Don’t despair though, the government is cracking down.  TXU "may" be fined $210M for manipulating Texas’s electricity market in 2005.  Additionally the company is charged with overcharging customers by 4%, adding $80M to their $2.4Bn in profits for 2006.  "The $210 million payment recommendation was based on Potomac’s analysis, which found that TXU — the biggest utility in the state by generating plants — submitted bids in excess of its real costs at periods of high demand and also withheld electricity from the market. Both had the effect of raising prices, according to the analysis."  Yeah that $210M will really teach them a lesson – let this be a warning to other energy companies who gain $15Bn in market cap and make Billions in profits by manipulating prices AND overcharging consumer – IF you are caught we MIGHT hit you with a 1% penalty!  What?  Criminal charges???  LOL – don’t be silly, this is America – we don’t prosecute people for stealing money (unless it’s small amounts, under a Billion), especially not campaign contributors!

Someone must have instituted a 1% penalty on the bears at the Nikkei, which traded down 150 points into their lunch break and then resumed trading up 100 points to finish the day flat.  This had nothing to do with the Hang Seng, which rose all morning and finished the day up 267 points as a dollar recovery cheered up the exporters.  Europe is up half a point this morning with transports perking up as Brent crude traded down but T. Boone aims to put a stop to that nonsense this morning with his pre-market appearance.

Our own markets held their levels yesterday and if we can get the Dow (I give up on the transports) positive we are very likely to get some capitulation from the bears today.  Let’s keep in mind that tomorrow is the end of the quarter so much of the action we’re seeing may be window dressing, but that doesn’t mean we shouldn’t make money on it, right?  We picked up more  GOOG June $490s yesterday at $12.85 and I still like that play.  We also sold the AAPL May $100 puts for $7.80 and covered with the May $95 puts at $5, which we can remove on good momentum.  We still have our uncovered LEND shares at $10 (basis $8.50) in our $10K Virtual Portfolio and wouldn’t it be fun if we can sell the $7.50s for the third time at $4 or better?

Hopefully the US markets will be kind to us today otherwise we’ll start feeling silly for holding onto all those calls!  The GDP was a healthy enough 2.5% so what the heck were we worried about?

 

Break

Break

38%

Safety

Index

Current

Out

Down

Fib Level

Margin

Dow 12,300 12,500 12,350 12,369 -69
Transports 2,752 2,983 2,736 2,830 -78
S&P 1,417 1,440 1,410 1,407 10
NYSE 9,218 9,400 9,100 9,073 145
Nasdaq 2,417 2,450 2,400 2,411 6
SOX 469 490 470 469 0
Russell 797 810 790 786 11
Hang Seng 19,821 19,800 19,400 19,789 32
Nikkei 17,263 17,600 17,000 17,244 19
BSE (India) 12,979 1,400 12,900 13,253 -274
DAX 6,866 6,900 6,700 6,707 159
CAC 40 5,593 5,700 5,500 5,495 98
FTSE 6,298 6,350 6,200 6,205 93

We need to see the Dow get over 12,369 and hold it to call today a victory.  Any downward move on the SOX is a sign to line up some downside coverage but let’s hope we can start looking for our break out levels tomorrow rather than our break downs.

Of course take our remaining mattress plays off the table, if the markets fail we want to reset at yesterday’s starting levels although we could leave some on as we’re certainly going to want them over the weekend no matter what the markets do over the next two sessions.  The WSJ has a very disturbing chart on the "worsening" subprime delinquencies that makes me wonder what everyone is so excited about this morning.

Oil will do its best to hold $64 today and we have plenty of bets in both directions so we’ll see if the natural gas inventories can give us some momentum one way or the other.  Britain and Iran are arguing over whether the UK will apologize for going into Iranian waters and Blair is waving satellite photos that show they weren’t but Iran doesn’t believe in satellites so what kind of proof is that?  If all this silly posturing meant anything gold would be over $680 and it’s not!

Oil and Dollar

The dollar is down 2.5% since 2/12 and oil is up 10% while gold is effectively dead flatWhat if we weren’t at the brink of war with Iran?  Heaven forbid peace breaks out and a lot of people are going to lose a LOT of money so let’s all bow our heads and pray that our leaders keep us firmly on the path to war, lest our profits suffer!

============================================================================

No picks today, we should be pleased with our oil covers this morning thanks to T. Boone but let’s just keep on our toes as all this relentless pumping just smells like a repeat of yesterday when roaches scrambled out of energy stocks as oil climbed all the way to $65.

Happy Trading has an excellent set of charts on his web site, giving us a good view of the technicals and our man Tom2oc makes a good case for the sky not quite falling yet.  I don’t argue with the chartists but let’s just keep in mind that our pal Cramer just told us last week that funds purposely game the technicals to lay a "bull trap" for retail investorsThis being the day before the end of quarter I will warn you that nothing is what it seems and the real face of the market will be shown on Tuesday, be it a bull or be it a bear I cannot say – my magic 8-ball is on the fritz!

 


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  1. pantarei

    Oil again trading up towards 65$… lot of contracts traded.

  2. BillBigD

    T Boone Picken
    Phil- Let’s be somewhat fair to this guy. The WSJ did a story earlier this year that said he made most of his money last year shorting Nat Gas. So he like you plays what the market gives him. Besides he can’t be all that bad as he has pledged over $100 million for OSU’s football program. LOL

  3. Phil

    T Boone – if you think that it’s OK to have 58,000 pages of you saying we are in a peak oil cycle and that energy prices are going up and telling everyone in America that energy stocks are the best investment while secretly shorting nat gas stocks – sure, they guy’s a saint!

  4. Pitch78

    BillBigD

    You an OSU grad?

  5. mrn

    Allright BillBigD! I respected your opinion’s which seem somewhat informed until that last one “OSU’s football…” I’m a Nebraska Husker and that did it! :) Just kidding – thought I’d try out some of the volitile language of politics & football to see if it actually made me a better trader.

  6. John

    mrn.

    Ouch, Husker fan. .I graduated from Kansas State, lol.. You and I will have a lot of fun on this board..

  7. mrn

    AIG’s open “skeert” me w/ short-term 65′s sold against it!

  8. Pitch78

    John and mrn,

    To add to the fire – I am a Oklahoma Sooner grad.

  9. Pitch78

    Should have been “an”

  10. Andy

    I am with you John, Huck the Fuskers! :)

  11. BillBigD

    Phil,
    Not trying to pick a fight but what is the difference with your daily comments on your blog, oil is to high everybody is fixing the price, etc and then buying calls on oil stocks. Seems the same to me. Besides people in his hedge fund knew he was shorting Nat Gas.
    No I am not a OSU grad but live Dallas and love Big 12/SEC football

  12. Gordo

    Go Big RED!

  13. John

    Wow, that’s pretty damn fun, the big 12 crew here.

    Hi Pitch an Mrn,. . Pitch, my wife’s from Tulsa so I’m pretty partial to Oklahoma.

  14. mrn

    Bill & Pitch & Andy: O.K. (pun) the benefit of being a Husker and a trader is that I fool myself into believing that I really like RED (as in my account)! Phil’s sarcasm font in use in previous posts all typed w/ a smile!

  15. michael

    any thoughts on UNH?

  16. insyte

    tso close to 100 again…playing puts again Phil?

  17. Phil

    AIG – don’t panic, there’s not too much strenth to that spike. Still, if the market turns up, they will go back to $70 (until someone predicts a hurricane). That’s the great thing about AIG leaps, no matter how much money they make, at least 4 times a year people panic out of the stock when there’s some kind of actual disaster. If there weren’t actual disasters, they wouldn’t have jobs!

    I can’t believe TSO is going to test $100 again for us! I should just trade this stock every day!

  18. BillBigD

    By the way I am just like Phil ( UMASS GRAD) But moved to Texas in 1987.

    HWCC- this came across my desk , I forget who I was talking to yesterday about this stock. Also nice comments on Phil’s sister site Alpha
    HWCC (Houston Wire & Cable Co.--$26.68; +1.08; optionable): Specialty
    wire and cable products

    EARNINGS: Announced 3-14-07
    STATUS: Ascending base. Lots of positive price/volume action in this
    6 week ranging pattern that is setting HWCC up for a new high. A new
    issue last summer, this is HWCC’s third base. Excellent surge Wednesday
    as it announced it was increasing the size of a secondary offering.
    Lots of interest and backers. Looking to move in as it continues this
    break.
    Volume: 2.265M Avg Volume: 339.898K
    BUY POINT: $27.21 Volume=350K Target=$32.48 Stop=$25.31
    POSITION: UKL FE – June $25c (69 delta) or UKL IE – Sept. $25c (64
    delta, low OI) &/or Stock

  19. mrn

    Wow, UNH must be another university whose head coach went into politics! :)

  20. insyte

    mkts slipping and sliding on high oil?

  21. JPL

    I am a Syracuse Alum, and my nephew goes to UMASS and is on the hockey team – they had a pretty good run this year – so there you have it –

    Bill Big D I am in Dallas as well – do I hear a happy hour?

  22. mrn

    UBS cut UNH to neutral from buy and lowered target

  23. den0

    Phil, You mentioned calls on AIR few days back. Looks like it is breaking below lower trendline. Hanging right at recent support now. Are you still sticking with the calls?

  24. Pitch78

    JPL and BillBigD

    If you do, let me know. I am in Oklahoma City.

  25. Phil

    Bill, if I was as influential as T Boone, I would be concerned about the SEC not taking kindly to my saying one thing in public and investing another way but then I would remember what joke the regulations are and I’d probably manipulate the market and make a few Billion too!

    UNH – what the heck happened there? UBS hit them with a neutral and they drop like a rock! Let’s take out the $55 caller for .60 and buy 10 $55s for .60 in the $10KP

  26. Pitch78

    Phil

    I have CY Jan ’09 I bought for $4. Now about 4.50. I had sold March ’07s against them and they expired worthless.

    Question is do I sell against them now or is there more uptick to CY in the short term? If now, should it be the Aprils?

  27. Pitch78

    Oh yea, they are $17.50 strike price

  28. insyte

    bzh up .80….any puts rec here Phil?

  29. insyte

    Q’s, SOX meandering…looks weak kneed rally so far

  30. dday97

    UNH,

    You took the words right out of my mouth. Loving the dropoff right now.

    Since we’re talking college:
    Holy Cross Grad. in lovely downtown Worcester, MA.

  31. makemoney

    GS was a gift yesterday. I think that I’ll take my profits off the table later on today.
    Brokers looking good so far. Like you said Phil, if you follow a stock closely day in and day out, you get a feel for its movement after a while. Nothing is perfect though, and gotta look out for suprises!

  32. BillBigD

    ICE- came out with 08 leaps today. Will watch them trade for a few days.
    ATI- took a little off (40%) on july calls

  33. happyTrading

    Hi, all! Good morning!!

    X
    looks like 100 today!

    CN
    wow, up another 2+!!

    ACN
    has broken out also!

    GOOG
    stop teasing us with 464-465! Let’s get over the hump and have a 5-10+ day today!

  34. mrn

    Phil: I assume you’re holding GFI & AUY LEAPS simply as a hedge – so you won’t ever sell closer options against them? They are just insurance against inflation and $$$ printing?

  35. KC

    BigBillD,

    On HWCC, that would be me. The calls are limited and pricey. Not sure how to play this. Would be better as a longer term play but chain stops in Sep. Thoughts? Thanks.

  36. Mr. Burns

    Phil, for the 10K portfolio, that was buy the UNH April 55 Calls for .60 or better? (.UHBDK)

  37. Amit

    Pundits in this group,

    Any idea on CPNLQ (calpine). I rode this stock to bankrptcy and seen it come back from .30 to 2.00 in last 6 months. Any ideas / inputs what will be good price to exit? Information for .PK stocks is extremely difficult to come by.

    Thanks

  38. zman

    P – Excellent rundown on Mr Burns this morning. His rally was unusually short lived. Hope he had time to short some oil.

    Also, April RBOB expires tomorrow so TOS is ramping with volatility there and on Mr B’s comments that gasoline won’t falter earlier than usual.

  39. mrn

    Phil: I’m getting discouraged with MRK puts – the buyers seem to interpret all the news in a contrarian fashion and we’re hitting the end of the bell curve on premium deflation.

  40. Richard Lindop

    Phil,

    If you don’t mind, could you please post the symbols of the calls/puts when you make a recommendation rather than just saying buy XXX at $$$$. It takes a little time ( and anxiety ) to know if you are talking about the April’s, May’s, ….

    On the UNH calls, it is finding a little support at this level. Should we stick with .60 or is .65 also appropriate.

    Regards….

  41. Phil

    TSO – of course we take puts at $100! Let’s just be careful of that gas report – Bush will be obscuring it with some nonsense starting at 10:15, probably taking credit for the GDP number. I did a DD at $1.50 for a $1.75 avg basis on my $95 puts, we’ll see how that goes but I will get out at $1.25 before I blow yesterday’s profits.

    Don’t forget it’s prom day for DNDN. You can buy the stock for $5.22, sell the $5 calls for $1.35 and the $5 puts for $1.55 for a potential gain of $2.68. I think they’ll get the approval and, even if they don’t, the stock is not likely to go to 0 right away but the calls will so you can buy them out and the $5 puts on the news maybe even and take a $2 hit on the stock – it’s not a worst case but it’s the most likely worst case.

    AIR missed sales numbers last week and really tanked the stock. I have some Aug $35s that got clobbered and I haven’t decided if it’s worth a DD (probably not). They missed by 2.5% and the stock dropped 10% (and the miss was a 14% increase in sales) and earnings were in-line so I will be back but I want to see a bottom first.

    Report just in: Foreclosures up 12% this year, up 77% in Nevada, up 91% in Florida. One in 800 homes nationwide are in foreclosure. Don’t worry – be happy…

  42. JPL

    Happy – did you put FDX thru your BB? If it is on your blog – let me know. Thanx

  43. BillBigD

    Steel stocks are flying on the X buy! STLD CHAP NUE
    DNDN-closed for trading.
    Foreclosures-12,000 in Dallas ouch

  44. zman

    Gas storage

    22 bcf withdrawal. probably seen as mildly bullish

  45. Phil

    CY – personally, I sold the $20s for $1 back on 2/26, with low priced options, you sometimes want to go out a little farther. The stock is down now and you might want to wait a bit, hopefully get a buck for the May $20s. I’m very concerned about the SOX being down today though…

    ================================================

    BZH – too iffy. Lots of factors and it’s just retraced 50% of it’s drop. The $30 puts are a risky mo trade but should give you the best bang for your buck. If it breaks above $29.55 then you are wrong and should get out.

    =================================================

    GOOG is not teasing, there just isn’t enough money coming into the market to support it’s cap – all buying looks tentative today. Same nonsense as yesterday with oil – it’s up .70 yet most stocks are flat.

    ==================================================

    Bush will VETO and he’s got a bunch of angry congressmen standing behind him – great theater!

    Somehow this gets back to keeping taxes low… Very brief statement.

    ==================================================

    Gas is down 22Bcf, a little more than 15Bcf expected but nothing for traders to hang $7.50 on.

    ======================================================

    GFI, AUY – yes, just in case something blows up.

    =====================================================

    Removing oil covers – I’m willing to risk this.

    ===================================================

    UNH – yes and my attitude about cheapy plays is if I don’t get my price I’d rather let it go.

  46. Pitch78

    Foreclosures – and we wonder why?

    “CASEY SERIN knows all about the excesses of America’s housing bubble. In 2006 the 24-year old web designer from Sacramento bought seven houses in five months. He lied about his income on “no document” loans and was not asked for anything so old-fashioned as a deposit. Today Mr Serin has debts of $2.2m. Three of his houses have been repossessed; others could share that fate. His website, Iamfacingforeclosure.com, has become a magnet for those whose mortgages are in trouble.”

    http://www.economist.com/finance/displaystory.cfm?story_id=8885853

  47. Phil

    CHK $30.00 puts CHK-PF for .25 as a mo play, I see ECA tanking and might follow – just a craps roll.

  48. IDrinkTea

    UNH – Thanks Phil I agree…won’t pay .65 then.

    AAPL – Did we do anything there for the 10K? If so too late to get in?

  49. mrn

    Phil: Why chk which has a large hedged position on future production vs. APC which is still up? (Not questioning your superior call, just trying to learn your strategy.)

  50. Phil

    MRK – they are partially a market hedge. If we have a 200 pt down day they will hit $41 fast.

    =============================================

    The problem with me posting symbols is that I tend to think of the trade and tell you before I make it. When I go to my account to get the symbol I tend to make the trade first and then I get distracted with all the little fiddling moves as I try to get my shares that I either forget or post it late. I know it’s not ideal but it’s what I’ve observed of my own behavior and it’s hard to break…

    ==============================================

    That Casey Serin thing is a pr play by the bankers to villify the borrowers – I spoke about this a lot last week (or two weeks ago). It’s psychological warfare, just like using the term “liar loans” to describe the no doc loans that is the first choice of every broker I deal with when I am buying investment properties.

    The lenders decide to take a risk as your investing partner in a home. The put money into the business with you and you become the “working partner” in the relationship, responsible for making all payments and repairs and paying all takes while insuring your silent partner a good return on their investment.

    Suddenly though, when the business doesn’t work, the bank screams that you cheated them and runs to Congress for help in bailing them out or, at least, making sure you don’t get away with it. If I get around to it I will elaborate on this whole scam over the weekend…

  51. momoneyplz

    Hello all.
    I don’t think the markets will tolerate high oil prices this year. The economy in my opinion won’t fare as well this time around with higher energy/commodity prices. Feels like the markets will tell us that. With commodity prices at this level, I don’t think we are gonna break to the upside.

  52. Mr. Burns

    Hey 10K folks, I just got filled on the UNH 55 calls at .60, had the order in since Phil suggested it about an hour ago…Anyone else get filled?

  53. Phil

    CHK – as Cramer says, the fundamentals don’t matter if someone wants to take it down. Like I said, just a gamble on a quick double at that price.

    SU – oil is at a 6-month high and SU is right between it’s 6 month high and low. I think this is really important to watch to give us an idea of crude direction.

    I got my UNH’s (just 10 so far, I’m going to wait on the rest) – I hope I don’t regret it.

  54. Phil

    Critical failure on SOX, reinitiating mattress plays from yesterday!

  55. likewoods

    Mr Burns got filled also, looking for a rebound

  56. Richard Lindop

    Yes, my UNH 55 calls were also filled at .60 just now.

  57. Richard Lindop

    Phil…should the 10K’ers stay away from CHK?

  58. insyte

    looks like they forgot it is the EOQ mark-up time

  59. Denis

    DNDN.. Can’t remember if any provided their thoughts on downside upside after news is dispensed? I think I remember $2 or $12 from yesterday?

    Any more thoughts on HAL with the large positions still open in the Apr $40 calls and puts?

  60. Phil

    UNH – my plan is to buy another 10 at .40 as I don’t see any good reason. It seems to be that they may not be able to buy Sierra Health but their stock dropped $5 when they announced the buy so you think they’d be happy…

    The Senate just gave Bush a big FU by approving the bill he just said he would veto – it’s going to be a fun last 18months for this administration!

  61. Ryan

    Zman- Where can I get a CC transcript of SCU. I checked seeking alpha, but I could not find one. Thanks

  62. IDrinkTea

    UNH – Just filled at .60 also. Don’t you guys just love the way we’re already down 8.33% on this trade thanks to the bid-ask at .55-.60?

  63. rmyadsk

    You said it IDrinkTea. I love the penny options – GE, MSFT, QQQQ and the others. Enough with the pilot program, do it everywhere – my broker can easily afford the additional Level II bandwidth with all my commissions!

  64. Phil

    $10K CHK – no way. When I say craps bets that’s effectively a double or nothing bet. The $10KP can’t afford to be involved in nothing plays.

    EOQ – I don’t think they forgot, I think this is the best they can do…

    I just wrote a play for DNDN – maybe in the previous post but super high risk. They will be halted soon, maybe after lunch but could happen anytime.

    SUN falling off the table, they are a refiner’s canary in the coal mine sometimes.

    HOC getting hit – I think Z was on top of that one.

    PCU tuning down – about time.

    CEO had a good report but costs are climbing fast. PTR $115 puts are a risky momentum play if oil falls back below $64 (and, of course, the Valero Rule).

  65. juliet

    Anybody here follow IPS? That stock is like energizer bunny. I wanted to buy this but hesitated and of course…bang.

    j

  66. likewoods

    Phil – Burns are you setting a sell stop on UNH (trigger)

  67. greedpeace

    http://www.investorvillage.com/smbd.asp?mb=971&clear=1&pt=m

    live play by play of dndn fda panel meeting. fda reps presentation seems positive. upside 12 downside 2. playing straddle.

    cege has immunotherapy drugs in pipeline most likely pop if approval is recommended. also onxx

  68. MJ

    just take a look at NDE. Some insider buying recently and the stock zooms up. Time to load up on those leap puts.

  69. greedpeace

    nobody likes usg leaps selling crazy priced calls against?

  70. zman

    Ryan – will check and get back to you. That’s a mad money trade if you couldn’t tell from the report.

  71. Mr. Burns

    IlikeWoods,
    No, I can’t afford to set a sell stop, the comissions are killing me on the 10k portfolio with the quick buy in’s and my panic sells. I got out of LEND when it tanked, and took a small loss on the position, but the comissions are eating into my 10K portfolio fast. I am going to wait this UNH play out, just like the BSX play until it runs up to a net profit, or when Phil says to dump them. If anyone else has a better strategy please let me know, I am here to learn, and to loose as little of the 10K as possible!

  72. Mr. Burns

    On the DNDN play, I see trading in the stock has been halted, does that mean Options trading is halted also? Anyone in on this play? It will be fun to watch, for free, since I am not in it…

  73. Phil

    HAL – I’m just staying away.

    Penny trades – I need to take a week off and just play with those, it seems to me there’s a lot of money to be made on these wiggle trades if you can identify some solid channels, especially as the bulk of traders still trade the nickels.

    Finally WFR pulls back – I thought I was going to have to give my caller $10!

    RIMM is cliff diving, a lot of tech going south fast – funny how the QQQQ puts were the only ones that didn’t stop out yesterday and here they are coming in handy….

    SOX getting worse and worse, down to 463. Nasdaq was only 17 points over break down this morning, S&P had 7 points of room (1,410).

    BA – I can’t take the tension any more, I’m going to sell the $90s for $2 (it’s 5 day mid-point) if I can.

    BSX calls actually turned positive!

  74. dday97

    Holding off on UNH, I’m hoping to get it at .50.

  75. juliet

    PHil, if I want to play IPS, what would be the safest way to play? Thanks.

    j

  76. Richard Lindop

    Is the BSX play still a good 10K’er play? If so, could you please let me know the play again?

  77. greedpeace

    will aapl crash with the sox and sndk?

  78. dday97

    Looking for another entry in BIDU now. I think it has dropped enough here.

  79. mrn

    dday – you should have filled @ .5. I was trying to play real smart and had a bid @ .45 when it turned.

  80. Phil

    I love the idea of playing ONXX and CEGE but I think I’m going to take ONX $22.50 puts for .45 as downside protection to my DNDN play, which is net bullish by a lot.

    For you budget gamblers, the CEGE Jan $5s are .45 and there are many scenarios that can put you well in the money over the next 8 months (they were at $8 last year) but this is VERY risky as they are pretty much a one-trick pony and they’ve already licensed that trick to NVS. They lose $30M per quarter and make nothing but they do have $150M in cash so they will get 3 good swings this year to justify $25M per Q in R&D spending.

  81. Mr. Burns

    dday, if you get those UNH’s at .50 I’m gonna be pi**ed (at myself) for buying in at .60!!!

  82. dday97

    MRN

    By the time I plugged it in it was at .55. I think I’ll get another shot at .50 though.

  83. momoneyplz

    Mr. Burns,
    My strategy is to take profits when I have them! It is the worst feeling to not have sold for profit and then take a loss. Bad for business! On 10k, or in particular this UNH play, a hundred dollar profit would be satisfying for me, of course after commissions. I take that money and run.

  84. IDrinkTea

    Burns, I’m with you re commissions…eating me a new A*$@*#&! It really cuts into your ROR on a small portfolio.

    I was up over 40% on my SBUX play last week. After counting commish in and out that dropped to around 20% ROR.

    I’m starting to think better to just roll the dice while making the most informed and logical plays that you can.

  85. Cory

    Any idea whats tanking IMAX?

  86. dday97

    Buying BIDU June 105′s. Price is starting to get into the wheelhouse on todays drop.

  87. zman

    NBR to miss on lower than expected N. American drilling activity. That’s the second service company to warn in the last two weeks after HAL’s similar statement. (that I know of)

    It also jives with Tx permit data I was looking at last night showing a pretty steep year over year decline is taking place in the number of wells being permitted for drilling in the state. However, the number of rigs working there continues to climb. Tx has just under half the active rigs in the US so it’s a pretty good barometer of activity. Bad for service, bullish for gas prices

  88. zman

    Ryan, near as I can tell they didn’t have a cc but I’m waiting to hear back from the company on that and a couple of other issues.

  89. dday97

    Careful rolling the dice. I’ve seen people with less cash to play get too crazy on short term plays trying to build a higher base and before you know it you’re down to 5 bucks and playing the lotto. Take the small 15-25 percent gains after commissions and slowly build a base. Be patient guys/gals. Just a thought.

  90. Pitch78

    ZZZ

    So, Zman, if you owned GW stock, would you sell? Sounds like it.

  91. Mort

    Phil
    is RIMM turning back up? intraday mfi for 5, 10 and 15 minutes are all very low?

  92. dday97

    Mr. Burns

    I wouldn’t worry too much about getting UNH at .60. It’s a good price and the stock has shown that it can rise and rise quickly. Plus their earnings is during expiration week so hopefully we’ll get a pop leading up to that if we hold that long.

  93. MJ

    BillBigD, CTSH is down almost $4 in the last 3 days. Are you trading CTSH.

  94. IDrinkTea

    Phil, Just my opinion but I think the 10KP needs another short play (like the WCI puts I missed) to keep it balanced out in this choppiness. Just something to think about if you run across any ideas.

  95. Mr. Burns

    Comissions on the 10K portfolio:

    There was a post the other day from a guy using a broker that only charged one dollar per contract on a website called Interactive Brokers, or something like that. Anyone using that broker? That would be a huge savings to us small fry, but I just got started with Option Express (moving my cash from ScotTrade) and I just don’t want to go through that again.

    I just added up my comissions from two weeks of trading on the 10K and it is almost $600.00!

    I am now going to hold what I have for a week or so, and give these PhilTrades time to work. My problem is focusing on the daily small movements that scare me out of a position, causing a small loss but a big comission hit. I think I’ll try a “long term view” instead of my current focus on the minute to minute movements.

    I am going to put in some sell orders in on the BSX, UNH, (i am totally out of the LEND plays) and go do some yardwork for a few hours!

    Thanks all…

  96. Bill P

    Commissions – check Interactive Brokers. $1.00 for first contract and .50 for each after that. Much less expensive than others. Decent enterface, but takes a bit to get used to it.

  97. Phil

    DNDN was no fill, I don’t know when they halted trading but I got nothing. No point in ONX’s then for me but we’ll see if the strategy pans out.

    ===============================================

    IPS I wouldn’t touch them with this insane option pricing but you can sell the current $130 puts for $5.60 against the May $125 puts for $5.65 but I’m staying out.

    ================================================

    BSX has been an annoyance so far. We bought the May $15s for .60, which you may still be able to get on a dip.

    $10KP- WCI Jun $22.50 puts need to have $2.25 stop.

    BIDU – I still like the Jun $105s at $5.60, down $1.40 from where we bought them (but we sold May $105s against so even atm).

  98. MJ

    Interactive Brokers also has a very simple web interface. I use the web interface all the time. I don’t use IB for any quotes though.

  99. dday97

    Mr. Burns,

    Never used that broker myself. I think your new thoughts on holding and letting some of the plays work is a good plan. I’d just put some trailing stops on your trades to the level that Phil suggests or where you feel comfortable. Don’t lose the patience. Enjoy the yardwork, its a good mind break and lets you sort out your thoughts.

  100. zman

    Pitch – re GW – not necessarily. There’s a weird divergence between permits and rigs over the last 6 months or so. Rigs keep going up up up in Tx so their numbers should be ok.

    Perception of falling dayrates will hurt you though. Everybody “knows” things are slowing and a lot of the stocks have traded higher (I mean over the last several years) on the perception that dayrates keep climbing astronomically.

    So I’m torn on the drillers. They’re busy as hell. But maybe not for long. It’s possible that the increasing use of multilateral horizontal drilling in Tx shales which takes longer to drill and complete is behind the permit vs rig split. If that’s the case then the drillers are fine although their labor costs are going to skyrocket. Too many kids want to go to college these days….not enough roughnecks to go around. I’m running some traps and will get back later today or tomorrow.

  101. insyte

    after boone’s bump and EOQ mark-up, if this is the best they can do I expect a swoon later in the day

  102. Pitch78

    Thanks Zman.

  103. Cap

    Phil – it wasn’t the Senate … it was the Dems … whaddya expect ….

  104. Cap

    what just happened w/ oil ? another rumor ?

  105. Don Nenninger Jr

    Just started using -options house (if you sign up let them know I gave them the reccom.) major problem some options that they show are “not in their computer???” until you specifically tell them that you want to trade that option-this happened 1 time- good news 9.95 flat fee each way so figure $20.00 round trip for any amount of contracts

  106. insyte

    hey cap…you got any plays besides politcal comments…let’s make some money bud

  107. Cap

    ahh; Iran not going to release woman sailor…. anything to pump this sludge.

  108. _fab

    Mr Burns,

    Using Interactive Brokers and liking it a lot but for two things, their realtime charting’s UI is not great and their trading workstation takes a lot of CPU resources which simply puts my PC (5 years old Athlon XP+ 1800) under heavy pressure.

    You can use a 3rd party charting tool for the chart bit (I use Quotetracker, and eventually plan on writing my own), but I still haven’t gotten around to building a new PC.

  109. BillBigD

    ISE-sold Apr calls seems like you can do this one a day. LOL
    CTSH- waiting on this one to add
    FXI-acting well
    STLD-took profits before it drops (I hope)

  110. nltd

    Insyte

    insight--very good to have

    incite--please don’t, Cap’s likely to respond!

    Thanks,
    N

  111. Phil

    UNH, the trick is to buy more at .40, then you are in at .50 too. That’s why I only bought 10… If it never makes .40, then our .60 was probably a good place to buy.

    Commisssions – you guys need to stay away from low-priced contracts! You should be paying no more than .02 each way, even with a small account there are plenty of brokers at that level but that still means that between commissions and spreads you are giving up .10-.15 every time you make a trade so if your .30 play doesn’t make 50% you lose – that is not a sustainable strategy.

    Notice in the $10KP I went with LEND shares at $11, selling calls at $4.50 / WCI Jun $22.50 puts for $1.50 / BIDU $105 calls for $7, selling $105s for $6.60 and the BSX May $15s for .60 are my big gamble along with UNH, only because I think they are exceptionally cheap but that is just $1,800 out of the whole portfolio on “risky” plays.

    Whether you have $10K or $10M, you need to think about the impact of fees on your portfolio. If your broker is making more money than you, you may be doing something wrong… 8-)

    ==============================================

    IMAX further delays filing 10K, possible delisting… the usual. So glad I sold them last week!

    ==============================================

    Europe finished well but had a funny turn-down right at the end.

    ================================================

    Oil up $1.29 and XOM flat – tell me you think this is legitimate?

    ================================================

    TSO giving you yet another chance! $95 puts are $1.50 again, fun if you are rich and well covered but may not be a good plan into the weekend.

    =================================================

    Z – what’s your take on the logic of no one wanting to drill for $65 oil?

    =================================================

    RIMM, that’s a strange interpretation of turning back up.. You guys really need to throw your 1 minute charts in the trash – really, I rarely look at anything less than 5 mins and 10 min is my default…

    ======================================================

    $10KP – well the BIDU and LEND were short plays, as we sold calls against them but yes, if I take a new play today it is far more likely to be a put. I’d rather wait to see if we have any luck with UNH and BSX though as we are in for $6,300 and I don’t want to run too low on cash.

    ======================================================

    $600 commissions? What the heck are you trading? We’ve only traded about 40 contracts plus 200 LEND plus today’s UNH… that should be $80 or $160 if you are paying a lot. At least I think so, now you’ve got me wondering…

  112. IDrinkTea

    BSX – Shares up .25 the past three sessions. How much higher does this stock have to move for the bid to budge off of .60?

  113. dday97

    $600 commissions equals about 20 round trip trades with OXPS unless you’re active trader status. I think he was implying that he was getting nervous and trading in and out of plays…big time money burning action!!!

  114. zman

    So oil shot up on the death of one of the candidates in the April Nigerian presidential elections casting doubt on whether or not they’ll be postponed.

    The guy who “suddenly” died is Adebayo Adefarati

    On January 30th I wrote: Nigeria Watch: Good Reuters story on Umaru Yar’Adua, currently a regional governor likely to be Nigeria’s next president. Elections are in April and it promises to be interesting/volatile. The opposition candidate is a former military dictator.

    So the guy we want is still alive. Yeah. Bad news is the current leader, Obasanjo will probably use this to hold onto power a bit longer. I wrote about him yesterday and his 11th hour plan to tame the rebels by bringing his people’s standard of living up.

  115. RT

    MJ,

    Does IB’s web platform give access to the extended hours market ? I know their other platforms do but I need something web based. Thanks.

    Rt

  116. zman

    Re: not drill for $65 oil. I dunno where are the reserves? Texas: hell yes they drill. Locked up in tundra covered frozen oil sands. Probably. 7000′ deepwater Gulf of Mexico: anything with a reserve size > 250 million barrels.

  117. happyTrading

    SWN
    suddenly jumping!

  118. dday97

    UNH

    I wasn’t trying to undercut Phil to say you should’ve waited to get it at .50. The reason I waited is because I have a lot of longer term UNH calls so I didn’t care if it filled at that price or not since I’m already well covered on the upside. If I didn’t have a position with them I wouldn’t have been so willing to wait for it to go that low as an initial investment.

  119. zman

    Get your covers or keep your covers either way.

    The Nigerian rebels like (sort of) the guy who was going to likely win. With the opposition guy dead the current president can under Nigerian law suspend the election until a new opposition candidate shows up. Could take awhile seeing as the last one just had an accident.

    Anyway, and the rebels could be more active if they think this accident occurred to delay the getting a known reformer in power. Oil loves uncertainty.

  120. rockaintdeadyet

    Anyone notice that when the market was breaking down around noon, someone came into the rails (CSX, UNP) with a few hundred thousand shares to buy -literally just as they were breaking he just came over the top with his big bid. Second one today in CSX (10:05 was the other one). I wonder who is so aggressive a buyer as to take out fifteen cents worth of levels in CSX as the market is running down.

  121. dday97

    Did anyone else see all the other crap that was thrown into the ‘soon to be vetoed’ spending bill? Geesh.

  122. IDrinkTea

    LEND – Phil you still uncovered? I don’t particularly like the stock’s movement today.

  123. Mr. Burns

    Yes, the nervous trading did cost me, I was in and out of LEND a couple of times (the stock and the calls we sold, so double comissions there).

    But Phil, are you forgetting about the two apple spreads you recommended? I also took those, and at OXPS that’s $30.00 for each one, each way. I am in both, as I thought they were recommendations for the 10K. That is the AAPL July 90put for $4.30 and Sell the July 110 put for $15.90. And then there was yesterday’s Buy Jan 100call for $10.00 and Sell the May 100 for $2.65. You later posted a “no trade on that one” comment, but it was too late I was already in!

    So that’s where I am, and now I just have to wait it out for a while. I really feel Apple is super strong, so I’m not too worried about those spreads, but I do think this market as a whole is also ready to tank any day now. I am looking for a strong, short rally up when the hostages are released (they will be), but other than that I have a negative view on the economy and the markets.

    Thanks…

  124. zman

    happy – re SWN. That’s a great stock!

    SCU, that little minnow I wrote about yesterday is participating in 8 of their wells in the Fayetteville shale right now.

  125. dday97

    Nice action on LSS and X today. Kinda surprised to see X rise that much considering they are the buyer and not the buyee.

  126. ash

    Anyone,
    I have AAPL jan 08 $95 and sold AAPL may 100 call for 2.45. What these trades look like on May expiration if AAPL is $100 at that time. Thanks.

  127. happyTrading

    SWN
    Zman, thanks for the vote of confidence. I cashed 1/2 out on the spurt. Looks like they could break out soon!

  128. Jeanne

    Phil-
    TGT May $62.50s down to .80- are you still “thrilled” to
    buy more?? Thanks

  129. Robert Lowery

    Morning Group,

    Whats the deal on hal …. she’s moving on up to the right side of the block!!!!!!!

  130. coolkid

    Phil,
    vlo- buying more 65 puts?

  131. dday97

    Ash,

    you sold your 100′s for 2.45, what did you buy the 95′s for?

  132. Rahul

    Phil,

    I own LSS Aug 45 calls and have been selling calls against these since Dec, most recently the April 50s, which has worked very well until today’s US Steel bid for LSS. Any suggestions on how to play this out from here?

  133. ash

    dday97

    I paid $13.70.

  134. zman

    Nigeria’s landmark elections will go ahead as scheduled next month despite the death on Thursday of a presidential candidate, a spokesman for the Independent National Electoral Commission (INEC) said.

    Adebayo Adefarati, 76, candidate of the small opposition party Alliance for Democracy (AD), died in the southwestern state of Ondo, private radio Ray Power FM reported. The station said Adefarati, who was diabetic, died in hospital.

    OK, now today’s oil rally is officially BS.

  135. happyTrading

    LSS
    Forbes had a good article about takeover targets, which included LSS (although they didn’t get the buyer right); wish I had pulled the trigger. Doesn’t hurt to buy a solid company with some time to wait. In any case, it’s something to read:
    http://www.forbes.com/free_forbes/2007/0326/212.html?partner=yahoomag

  136. happyTrading

    OIH
    flying again; 3-month high

  137. Phil

    .65 pump between 11:50 and 12:00 accounting for all the NYMEX gains since the open but there’s not much you can do to fight them, it’s very organized and very controlled, in my opiinion someone is spending money on the NYMEX (it takes very little with just about $30Bn a day of total trading which results in net orders of perhaps 20M barrels on a very busy day) to dump energy positions.

    Iranians stood in front of the British embassy and shot guns into the air and they can drive the price of Iran’s daily output of crude up $4M – how much do you think you have to pay a guy in Iran to do that?

    Oops, while I’m writing this they just hit another .50 pump, now up $1.70 for the day at $65.77. Transports broke down below my level, very hard for the Dow to get traction with the transports tanking.

    ====================================================

    BSX – when you go out 60 days you have to learn to be patient but it also helps avoid losses when things go wrong.

    ==============================================

    Gold is down $7 – apparently the trader logic is that only oil traders truly understand the global tensions while those silly gold traders (with 5,000 years experience) have no clue.

    There are literally just a few hundred people on the planet who trade oil while thousands trade gold (including central banks of every country), who do you think has a better handle on things?

    ================================================

    Nigeria – thanks Z, good info!

    =================================================

    Dems are looking to push Bush into asking for line-item veto as they are confident of WH control in ’08 and can use it to wipe Republicans off the map.. they are going to take every opportunity to annoy him at this point, also making sure the people see clearly that Dems want the war to end and Bush won’t let it – all a big chess game, too bad it’s played with real lives on the line.

    ==============================================

    LEND – I don’t like it either, my stop is $9.75 as my basis is $8.50 after the two sells. As long as BZH holds $29, I’m not too worried.

    ===============================================

    APPL spread was not for the $10KP, that’s a risky play! I think I’ve been good about saying $10KP whenever we trade there. If you have a low budget you can’t get into those long spreads as they tie up your capital and you don’t have the funds to roll your caller.

    If you want you can list out your positions and I’ll tell you what I think needs adjusting (after markets).

    ===============================================

    Ash – your Apple trade would likely look great at exactly $100 but we’d have to know your entry prices.

  138. dday97

    Ash,

    So if I’m reading this right the trade cost you 11.25..verdad? If that’s the case and not moving the volatility number here’s what I got based on buying/selling 1 contract.

    Stock Price Profit/Loss
    $90.00 ($302)
    $92.50 ($172)
    $95.00 ($43)
    $95.62 $0
    $97.50 $129
    $100.00 $302
    $102.50 $224
    $105.00 $146
    $109.68 $0

  139. JB

    SIRI launching satellite tv to chrysler vehicles. $470 first year then $7 per month on top of normal 12.95 fee.

  140. dday97

    Thats at expiration on 5/18.

  141. pantarei

    zman, whatever the fundamentals, they are going to take XOM to 80, it certainly looks that way. Crude oil into the weekend, with high tension about Iran, who knows how far traders will bid up the price of futures.

    Trading volume seems exceptionally high in oil futures.

    Taking a shot at 66 now. Shorts are getting skinned alive.

    If they all head to the exit at the same time it is going to get very ugly, but for now it works on the long side.

    Oil stocks will move upward if they can maintain the crisis pricing into the nymex close.

  142. albo

    Phil:

    What are your thoughts re: GRMN?

  143. greedpeace

    does sndk, qqqq, aapl resume uptrend? before april oe?

  144. Kwan

    Anybody with an IB account – does interactive brokers let you buy a leap and sell nearer term calls/puts against it as long as you hold the leap?

  145. ash

    dday97,
    Thanks so much. May I ask how did you figure all this numbers out.

  146. Mr. Burns

    Ok, thanks Phil I will post my positions after the bell, and wait for your recommendations….now back to the yardwork, as this market is looking very weak right now, and I can’t bear to watch it anymore!

  147. Kwan

    Hmm, I think I just answered my own question. Is this what they call a synthetic order?

  148. BillBigD

    zzz
    You actually like SWN? LOL

  149. dday97

    Mr. Burns,

    If you run out of things to do. Bring your rake over to my house :) .

    Ash,

    I just used a trade calculator.

  150. dday97

    Ash,

    If you have OXPS you can go to toolbox and trade calc. Plug in the trades you are looking at. Fiddle with the dates and IV if you wish.

  151. zman

    BillbigD …and CHK and PETD and CRZO. I’m not really a bear, I’m just seen as one on the internet. lol

  152. kustomz

    SEATTLE American Airlines wants 47 Boeing 7-37s four years earlier than its original request, in a move that industry experts say could signal a wave of orders for new passenger jets.

    American disclosed yesterday that it also had obtained purchase rights for the new Boeing 787, although it hasn’t ordered any of that model.
    http://www.wqad.com/Global/story.asp?S=6298284&nav=menu132_3

  153. zman

    Pantarei – agreed, it’s all about sentiment for now. They may very well charge $70 with oil now. That’s why I’ve got the 75 calls on XOM (though not enough). It’s like Phil says, you’ve got to have the covers to play the shorts.

  154. KC

    RS – Anyone playing this one? Looks like it’s making another move after a few days rest on avg volume. Wondering if I should take my small profit and run on my May50s.

  155. pantarei

    Dam right, me too I have too few calls, getting my butt kicked well if this train will not change direction before too long…

    There you have it, 66 is toast.

  156. ash

    dday97
    I use ameritrade. I have to find out if they have this feature. Thanks again. You were very helpful.

  157. dday97

    No problem, anytime.

    Well I’m off to my 2 hour lunch break. See you all for the last hour.

  158. kustomz

    NEW YORK: Prices for U.S. Treasury securities were mixed Wednesday after a government auction drew fewer bids from foreign investors than the previous monthly sale, raising concern that they might be pulling back from U.S government notes and bonds.

    “We have been relying on foreign investors the last few years to buy our bonds and keep interest rates lower than they would have been,” said Gary Pollack, head of fixed-income trading at Deutsche Bank’s private wealth management unit in New York
    http://www.iht.com/articles/2007/03/28/bloomberg/bxbond.5.php

  159. BillBigD

    KC
    RS looks good! The buypoint looks around $46.93
    HWCC- Bought 1/2 on Sept

  160. Phil

    TGT – in a vacuum, yes but this market looks like crap so I’m not going to be adding calls – it’s almost time to go to cash if we start losing our levels.

    ===================================================

    HAL – holy cow, the guy who bought those $40 calls was right! Hmmm, I may have sold my $30s a bit early…

    =====================================================

    VLO – no, I’m frozen right now – my TSO puts are hurting me and my XOM calls are not enough cover to save me just yet.

    ======================================================

    LSS – not much you can do, just let them expire, hope the deal takes a long time and sell the next few months to collect what you can…

    =======================================================

    Thanks for making it official Z – I hate that unofficial BS! ;-)

    ========================================================

    What a surprise, AMD having a bad day…

    =========================================================

    Treasury auction – No one wanted to buy dollars! Weakest interest in 4 years – big up pressure on rates, should hurt the dollar, boost gold, copper and oil. On the other hand, it shows global confidence is slipping hard and fast as the repercussions of giving up on the US means millions of jobs lost in factories around the world.

    ===========================================================

    GRMN – we played them in Feb and they hit our target ($55), I think they are right priced here and I worry about a category killer coming out of the phone word (just plug an IPhone into a $150 dash screen) so I don’t like the risk profile anymore.

    ===========================================================

    I love the Republican tax argument that the Democrats are proposing the largest tax increase in history (because they want to let the largest tax cut in history expire). The guy on TV has repeated that line “The single largest tax increase in American history) over and over again so I guess that’s the official party statement now. Also amusing is the logic that SS and Medicare are unsustainable in the future so we’d better kill them now… Don’t blame me for the politics by the way, this is what CNBC considers news at the moment.

    ==========================================================

    RS – huge run. When in doubt, sell half.

  161. insyte

    is oil gearing up for another flare-up in the mid east over the weekend
    Q’s now below the FOMC ramp up day
    SPX a stone throw away from 1410….Phil’s line in sand
    TSO’s puts a killer

  162. kustomz

    China’s reported oil find could stem reliance on imports
    Offshore field may yield 2.2 billion barrels as demand, consumption continue to rise
    http://www.theglobeandmail.com/servlet/story/LAC.20070329.IBCHINA29/TPStory/Business

  163. Pitch78

    Sprint big loser in Fed contract awards.

    http://www.msnbc.msn.com/id/17855380/

    Go Q!

  164. Jon

    Then why is gold down today?

  165. Phil

    DO and RIG up huge after big, strange sell-off we noticed yesterday.

    ==============================================

    Oil up $2 – hopeless!

    ===============================================

    COP hasn’t moved yet, $70s still make a good cover.

    =================================================

    PBR must have gotten that FDA approval instead of DNDN – they’re up $5 (runor they found 10B barrels of light/sweet crude). What a terrible oil shortage we have when a single company can find a 6 month global supply just like that…

  166. kustomz

    Gold has eased since hitting four-week highs of around 669 usd yesterday. The precious metal retreated after Federal Reserve chairman Ben Bernanke diminished expectations of an imminent interest rate cut yesterday — news which lifted the dollar.
    http://www.forbes.com/business/feeds/afx/2007/03/29/afx3563591.html

  167. KC

    BigBillD,

    HWCC – did you take the Sep30s? Are you looking at another position (“1/2″ comment)? I’m still on the sidelines, looking to add more longer term plays and conserving some cash for that.

    RS – yeah buypoint should be right around $47 for stock, but I’m already long May50s. If there isn’t much action over the next several days, I may take some/all off the table, as Phil suggested, since their earnings is coming up.

  168. zman

    kustomz – that’s over the twice the size of Crazy Horse (now renamed Thunder Horse after political correctness), the biggest find in the Gulf of Mexico. PBR up five on crude today but PTR, with this find is a bargain for a quick cover trade. It’s a lemming trade but I don’t think it’s full charged yet, especially if oil runs up into a tense weekend.

    Hey guys I try to stay on top of all the news but please flag me here or on my site if you see one of these. I might be daydreaming or in my research box and not see it. Thanks for the headsup.

    Phil can you suggest a good cover using PTR here? Thanks.

  169. FTP

    Phil you posted this earlier….
    When you get a minute, please
    Commisssions – you guys need to stay away from low-priced contracts! You should be paying no more than .02 each way, even with a small account there are plenty of brokers at that level but that still means that between commissions and spreads you are giving up .10-.15 every time you make a trade so if your .30 play doesn’t make 50% you lose – that is not a sustainable strategy.

    ….. I asked the other day but, are you saying .02 on the price of the contract itself ?? I can’t see where you would mean .02 fee to trade a contract, what are you paying for the trade itself one way for, lets say 50 contracts. I currently pay .55 per contract and 7 bucks a trade which i have had a hard time to get a better fee agreement with an online account.

  170. BillBigD

    KC
    Took the Sept 25′s. Will add more later. Hopping in the Taxi to get back to Dallas

  171. zman

    That seems odd, HOC at lod, tso backing off as well. Maybe they’re think gasoline pluges tomorrow on the end of the April contract but the out months are still lofty and will probably not sell off without crude. what the hell, I’ll take it.

  172. Phil

    Iran sent a communiqu to the UK saying, pull your troops out of Iraq.

    Please guys, just one daisy cutter… http://www.nd.edu/~techrev/Archive/Spring2002/a8.html

    PTR – I sold Apr $120s for $2.60 (now $1.30) against the Jun $125s for $2.70 (now 2.25) and I still like the Junes but you have to be willing to sell against them. My original play was to buy them on momentum and sell the $120s as soon as they got near even, riding the dime spread.

    I don’t believe in PTRs price today and I’m going to jump on PBR when it turns but hopefully they can get to some totally ridiculous level tomorrow so I can short it with confidence.

    =====================================================

    Level 2 mattress plays starting to trigger!

  173. John

    Wow, been gone all day. . I would say this is Bearish Engulfing on the Markets if it keeps up like it is. . .

    Geez. . .

  174. Options Sage

    Denis, the HAL shenanigans continues…..yesterday another 20,000 contracts on the 40 puts & calls and today another 40,000-ish so far.

    The ratio strangle I placed had the calls up from $0.30 to $0.55 and the puts down from $0.35 to $0.20 which based on the fact that I had more calls than puts meant I was up over 30% on the trade so I decided to scale out of the position and see what meddlesome chicanery ensues from this point forward.

    Hey Phil maybe in the book we can title a chapter on oil ‘Meddlesome Chicanery’!!

  175. Options Sage

    BIDU sitting on the 200-day MA that it popped off last August and about 10 days ago, let’s see if we find support again….
    http://stockcharts.com/h-sc/ui?s=bidu&p=D&b=5&g=0&id=p22737250772

  176. Phil

    .02 per option, sorry not per contract… I wish it were per contract! Still that means that is shouldn’t cost you more than $20 to trade 10 contracts, that is the assumption I make and the reason I avoid $500 trades as the $40 in/out makes it a tough sell. .55 per contract is a great price, you are effectively paying a penny an option for a trade – you certainly can’t say that is a major obstacle… What broker is that?

    Also, I find that good execution is MUCH more important than low fees as OXPS often saves me a nickel on my buys (more so than my sells) so what do I care if it costs me a penny?

    ======================================================

    TSO et al – like I said, you’ve got to be prepared to go to the wall on these trades as they never go smoothly but holy cow can you make a lot of money on the turns!

    Buying PBR May $95 puts for $2.65 – happy to DD at $1.60 if they have the guts to take it to $103. XXX

  177. hari

    Phil,

    Similar to RS, what is your opinion on TS??

    thanks

  178. Robert Lowery

    Options Sage,
    Are there any rumors flying about regarding HAL….Whats gonna happen, has happened…. Am I having a
    good time etc.

    Thanks

  179. Phil

    If by Meddlesome Chicanery you mean Blatant Market Manipulation – sure!

    TODAY AXP decides to be positive!

    I guess XOM, COP, CVX, SU et al don’t sell crude products anymore… Funny time to get out of the business!

  180. kustomz

    Weekly chart looks horrible $COMPX, falling off a cliff today

  181. greedpeace

    where is the near term support for apple? anyone?

  182. greedpeace

    not here apparently…..

  183. insyte

    with oil at 65+, poor bids on bonds, geopolitical tensions racking up, dollar down the tube….what’s holding this POS mkt?

  184. Frank

    90.42 is the 61.8% fib ratio from it’s peak to it’s late February bottom, That is the support I would go with.

  185. dilbert

    If mkt tanks 250 pts today where will be the oil stocks?

    Looking specifically at su, tso & xle

  186. Frank

    Greedpeace
    Sorry that is the 50% fib, the 61.8 is 92.16 so lets see if that holds.

  187. Phil

    TS – I remember a day when big, consolidated competitors were considered to be a problem for the smaller producers (although TS not that small) but I guess in Cartel Land, less really does mean more. Funds have been flying out of this sector while the M&A news has casused a retail frenzy. TS’s p/e is about 50% higher than MT, who I’d keep an eye on as they have been trailing off this week.

    I think I like NUE and MT better in the sector but don’t forget you need an economy to use steel and we’re not entirely sure we’re going to have one of those in the summer.

    =================================================

    If the NYSE turns red I’m going to go for a drink – just call me when the carnage ends.

  188. Arun

    Phil,

    What carnage? With all the bad news we’ve had recently, and the only marginally positive thing being the upward revision of the Q4 GDP – what’s holding the market up?

    Hard to believe EOQ window dressing is so powerful. Is it?

  189. kustomz

    AMGN being taken out the back and shot. Sell and ask questions later.

  190. greedpeace

    thanks, frank

  191. dilbert

    DNDN when is it going to open up

  192. greedpeace

    dndn tomorrow morning. company con call 7:30 tonight

  193. greedpeace

    what just happened? naz jumped.

  194. greedpeace

    nikkei came back 300 points yesterday. put on your caps

  195. JPL

    Phil – just came back are the COP’s calls or puts for cover – Isaw your PBR’s thanx – do we stay the course on fdx and tgt?

  196. Brainfill

    Not really a contrarian viewpoint, but my 2 cents on oil stocks.
    We can probably make some money on the turn of the oil stocks, but looking at the trend in oil stocks over the last 3 to 4 weeks; I think I missed out on the upside moves (I own some COP & SLB, but also bought some XOM puts). It is was easy to be taken in by the “noise” and hoping for oil to turn. However, looking at the charts, the volume, the overall psychology of the traders, and then adding Iran into the mix, it seems we are in an uptrend in the oil sector. My “guess” is that hedge funds are back into this sector, along with commodities in general. It certainly will make their 1st qtr. results look better…so next month might provide more clarity.

  197. Options Sage

    Robert, the 30th is supposedly a big day for HAL…. it seems to me we narrowed the possibilities down to 3 scenarios:

    1/ Phil pointed out some folks could be getting ready to dump 30M shares (or maybe we’re up to 40M by now with all the contracts opened at strike 40s) and the in-the-money protective puts move dollar for dollar with the stocks and with a big collapse and depending on the fill prices etc etc with scaling etc they could end up with a nice profit by moving the stock significantly lower (I probably butchered Phil’s comment but I am sure he’ll qualify if I have!)

    2/ The shorts have no idea which way the stock is going and have engaged essentially in a riskless arbitrage by protecting themselves through deep in the money short put options in the event of a price spike following spinoff/splitoff – if the rise is substantial (above $40), they have protected their short positions with cheap long calls

    3/ Some blatant market manipulation is staring us in the face as somebody knows something and the stock is about to pop higher because someone is both buying long calls and shorting puts in the money and about to make a killing.

    I think the bottom line is the stock could go up, down or sideways and my bet was it would move up or down. I have already benefited from today’s pop and I suspect there was an implied volatility spike in there somewhere that helped me out. I am cautious by nature but once in a while I just love a good gamble because they pay off a whole lot better than any Vegas gambles I have ever made! It’s definitely NOT a play that I would have entered with anything other than gambling money.

  198. zman

    Got to admire the coordination of T Boone’s appearance on CNBC with a GAO report released today saying the US needs to “develop a strategy to mitigate the effects of a peak in oil production, which most studies show will occur between now and 2040.”

  199. dilbert

    so if DNDN drug is approved will onxx shoot up or down?

  200. greedpeace

    if panel recommends approval for provenge, other immunotherapy candidates such as those from cege and onxx may fare better

  201. greedpeace

    how did i miss fmcn today?

  202. John

    I agree on the BSX Calls . .If somebody there not awake and just hasn’t changed it from 0.60 cents? lol. .

  203. FTP

    Phil I trade with ET but they have been giving me all kinds of headaches lately. I do daytrade alot of stock with them and I don’t know what alot of options are in terms of volume for trading, when i trade the Q contracts it goes into the thousands, but with all this good old volitility my trades have been increasing. I would much rather get better fills obviously but if I wasn’t so cozy using ET Pro I would have been long gone.

  204. greedpeace

    dndn – panelists are speaking right now and first 3 are negative, almost obviously overstating negatives. the observers posting to the board have the vote at 10 for 3 against.

  205. Mort

    aapl just turned green and goog is trying hard too?

  206. BillBigD

    CCJ-phil you selling Apr 40′s on this guy yet?
    NMX-bought back Apr 130′s Gain $2

  207. IDrinkTea

    Phil, I finally understand you are stressing discipline for those of us 10K’ers not to be tempted by all the riskier mo, energy and day trades you recommend intraday. So that’s fine….I’ll just stand here on the sidelines while you guys play the big game, score all the touchdowns and take home the cheerleaders. lol

  208. momoneyplz

    Anyone have a thought on DIVX options. They don’t look like they move much. Might be better off in common?

  209. nltd

    IDrink

    and take home the cheerleaders…

    And I was so hoping to enjoy that part…maybe while the others are busy with the game we can sneak a couple of those cheerleaders behind the bleachers…whadda you say?

    N

  210. Kwan

    idrinktea, nltd – you two are out of control. damned funny though.

  211. dilbert

    ntld I am already busy with them so you won’t be be able to do it :P

  212. BillBigD

    FXI-took a few contracts off the table. Nice gain for a month. Thanks Phil for getting me to buy when Stock was a $96ish.

  213. Phil

    Hey I’m back – didn’t mean to actually have a drink but lunch went on longer than planned.

    Hmm, markets holding up somehow..

    FDX, TGT – staying the course, still hard to believe any action today. Greed makes a good point, Nikkei made an insane last minute comeback, much like Dow is right now. I stopped out of my mattress plays already and 3/31 DIA $123s (BQQCS) are a very nice mo play at .52 if we break 12,340 but I’ve got to see confirmation from the Nas over 2,411 and the S&P over 1,421 and the RUT back positive.

    ================================================

    COP – that was $70 calls as a cover

    =================================================

    Wow, “the stock could go up, down or sideways” – maybe we should call you Opiton Oracle! 8-)

    =================================================

    DNDN should be good for many developement cos as it would indicate the FDA is serious about “fast tracking” new treatments. Over the long haul, it’s hard to see if this will just lead to more Vioxx nightmares but frankly, if I have terminal cancer, I think I might want the government to let me experiment just a bit.

    ==================================================

    OMG, sorry, while I’m writing this the DIA calls jumped a dime! This is total BS but what the hell, if they want to take us up a buck, let them.

  214. maple

    BigBillD + KC

    Bought the HWCC Sep 30 calls yesterday.

  215. Options Sage

    :-) Say what you want Phil, I made my bet and took 36% in 48 hours!

  216. Mr. Burns

    Back from the yardwork, wow LEND looks a little sick here, I am out just watching (for free). Sorta feels like standing behind the players at a black jack table, watching the action with no risk. Fun in a way…Good luck you 10K-ers! BSX picking up a bit, nice to see green on SOME part of my screen for a change!

  217. KC

    BillBigD,

    Took the plunge and joined you on the HWCC Sep25s. Your earlier reply made me realize there are more adjustment options with the Sep25s vs 30s, even though they are (obviously) costlier. Thanks

  218. dilbert

    Interactive broker: does the $1 commision include 9.95 per trade+contract or total?

  219. nltd

    What a miracle, Nas even turned green right at the bell…suppose the PPT showed up about 2:00 ET today?

    N

  220. Phil

    ET should be charging you no more than .015 per option if you are active – I like their power pro too but hate thier option execution system (and they can’t even find EOQ index contracts!).

    =================================================

    CCJ – not selling yet, uranium shortage story is too compelling, stock too strong against a bad market – sometimes in the LTP you end up picking a winner by accident and you have to go with the flow. If they break $41.50 (1 yr high) we might really see something.

    ====================================================

    IDT – in football that’s called being a benchwarmer. You have to put in some time in JV before you can get in the big game. It sucks but in a funny way it does prepare you and keeps you from breaking your neck by getting too rough too early…

    Having played for many years I can tell you with confidece that someone scores a touchdown or two in every game and there are plenty of cheerleaders to go around (in fact there are a lot more now than when I used to play) so don’t feel like you’re missing anything – just practice hard and keep your eye on the prize.

    =======================================================

    FXI – good day for it, they’re up huge! Nice job not being greedy…

    =======================================================

    LOL Sage – there’s nothing wrong with being wishy washy if you can figure out how to profit from it! Actually it would be nice if you could lay that trade out for people as it’s a great example of how to play a position when “something” is up but we don’t know what.

  221. Phil

    Somebody showed up at 2pm… In the end, the Dow was rejected by yesterday’s mid-point.

    They could take it up 250 tomorrow and I won’t be buying it though…

    Dell halted on “accounting misconduct” this is not good for our May $22.50s!

  222. nltd

    Dell halted on “accounting misconduct”…

    Any guess:

    Will they trade tomorrow?

    Do options continue to trade?

    N

  223. Phil

    DNDN – 17-0 vote that Provenge is “reasonably safe” Ka Ching!!! 13-4 panel vote that it is “effective.”

    HUGE (need bigger letters) win for them. Stays halted until tomorrow, might be possible to get them in the AM

    CEGE going nuts already, up to $4. I know someone bouht them because I had a bid in for .40 and someone jumped in and grabbed a bunch at .45…

  224. Options Sage

    I wasn’t actually intending to be wishy washy, it was supposed to be dry humor but I haven’t really practiced that since I was last in Europe 6 years ago so I’ll try to improve!

    Here’s the trade!

    Monday: Approx 40,000 contracts opened on the long call strike 40 and long put strike 40 (stock between strikes 30 & 32.50)
    Tuesday: Over 100,000 at same strikes to the best of my recollection…

    What was going on? I suspected because most of the fills were on the Bid side for the puts that they were being shorted. That’s a bullish play. A fellow member suggested it could be a cover for a short position going into the spin-off/split-off! Phil suggested it could be a hedge against a big stock dump about to occur.

    Bottom Line: I levered my bet towards my expectation that the stock would go up but hedged somewhat in case of an unexpected decline.

    The Trade: Ratio Strangle: Strangles are by design intended to profit from big up or down moves. Since I was leaning more bullish I added additional long call option contracts.

    Result: Stock popped today. Long calls increased in value from $0.30 to $0.55, almost a double. Long puts dropped from $0.35 to $0.20. Since I had more long calls than puts the trade was up about 36% when I closed it.

    Yesterday and today more contracts have gone in so the shenanigans may not be over but I am out with my profit.

    36% in a few trading days is a heck of a rate of return and I’ll take it every week!

  225. Phil

    LOL – they’re not shutting them down, just halted on news which is normal for a big co with big news, gives people time to digest info (too bad NYMEX doesn’t do that).

    Now ONXX taking off too, Mega Kudos to Greedpeace for coming up with those excellent peripheral plays on DNDN’s news!

  226. rileydog

    Phil,

    Back after several month sebatacle, however have been checking comments throughout the week.
    Very glad that you are still up on your wonderful humor, we all need that perspective in life!

    I was thinking on the British, their Marine Hostages, Iran, Oil, T. Boone Pickens and other subjects that have been discussed of late. I have figured out a good news, bad news senario for you. For fodder, say T. Boone maniacally obsessed $100 Oil. He could make a quick call to R. Perot to get a line on A-Class mercenaries. Send the Mercaneries into Iran to rescue and remove the British Marine Hostages. But on the way out of Tehran, T Boone instructs them to leave a briefcase nuke. Iran is Dust, Britians Freed, but the catastrophe sends the world crude price up to T. Boone’s desired $100 Mark. Mission Accomplished.

    So you ask, the bad news, The British Knight Sir T. “Boom” Pickens for saving their Hostages.

  227. Phil

    Thanks Sage, nice play!

  228. kustomz

    Greed congratulations on DNDN!! Your views were rite on yesterday.

  229. nltd

    So the halt on Dell…(sorry for my obvious ignorance, glad to amuse anytime, hah)

    Company probably waited ’til after market anticipating such a move?

    How long is such a halt normally?

    Thanks,
    N

  230. Mr. Burns

    Phil, as requested, here is my current portfolio:

    Options held:

    .BSXEC BSX MAY 15 Call bought: 20 Paid: $0.60 Current value: $0.65 $1,200.00 +100.00
    .UHBDK UNH APR 55 Call bought: 10 Paid: $0.60 Current value: $0.60 $550.00 0.00
    .XOMPN XOM APR 70 Put bought: 5 Paid: $0.60 Current value: $0.10 $50.00 -250.00
    (bought those XOM puts before we started the 10K portfolio, they were the other half of a strangle with five $75.00 calls, the net (so far) was $50.00). Plan to hold these till exp.

    Spreads (1) :

    AAPL JAN 2008 100 Call / MAY 100 Call 93.75 1 / -1 $7.94 $7.75 $775.00 -19.00
    .WAAAT AAPL JAN 2008 100 Call 93.30 1 $10.63 $10.30 $1,030.00 -33.00 (up $6.00)

    Jumped out of the other AAPL spread today:

    AAPL JUL 110 Put / JUL 90 Put 93.30 -1 / 1 $11.77 ($12.90) ($1,290.00) -113.00
    .QAAET AAPL MAY 100 Call 93.30 -1 $2.69 $2.55 ($255.00) 14.00

    Lost about 125 on that one PLUS comissions, lesson learned there.

    Any advice much appreciated, I am staying out of new trades until you suggest further…

    Thanks, Mr. Burns

  231. Gordo

    NLTD, DELL appears to be “un-halted” now. 21.85…-6.5%

  232. happyTrading

    INTC/Markets
    came back and closed in the green! Not bad. Markets might be almost done with all this back and forth. If they hold up tomorrow, we may have some interesting upsides coming in the near-term. I’ll have some more interesting charts to look at later on this evening on my blog.

  233. FTP

    Phil the funny thing is if you put in a strike for a quarterly you get a good quote but try and trade it! I had 2 round trips in the Q’s today, pretty much a perfect day for entries and when I tried to sell the quarterly against them, no good! The lowest the OXPS would go was .075 per option, I sent them my confirms to see the volume and that was the best they could do, I think the avg was 5000 daily contracts in the Q’s each way since they started in pennies. Any advice is welcome, thanks, I have to get to the mall at Short Hills, my 2 year old decided she would rather throw the keys into the fountain instead of pennies, I didn’t even know they had a fountain!

  234. nltd

    Thanks, Gordo.

    N

  235. mrn

    Phil: I know dividend plays are not your type of trade at all, but you’re knowledgable so… Would there be a way to “settle” for a safer 10% by trading dividend stocks near X dates using a collar or a put spread for protection? I love the excitement of the trading but I could never see myself getting to the point I would commit even 40% of my assets to it.

  236. rileydog

    Phil,

    We all know you are the best and most efficient watching the markets and picking opportunities, timing, pricing etc. during the day. That’s why I am here! You give us yours trades live daily in the comments and update intraday trades EOD. You also have to spend a great deal of time on the ST and LT portfolio’s. All of this is very helpful and I am reviewing all of it before entering positions again.
    What could help me, (because of the amount of current open trades in the ST & LT portfolio) is if you could add a column on the portfolios spreadsheets labeled (GTE) GOOD TO ENTER (GTE), place the date of your last review of the portfolios above this column and simply enter a price next to the play. Say you entered the APPL Jan 2008 100 Call @7.50, and currently it’s @ 10.00 55days since entry 25% gain. You could set a (GTE) Good TO Enter (GTE) of

  237. makemoney

    There have been a # of discussions about options brokers and pricing over at elitetrader.com.
    http://www.elitetrader.com/vb/showthread.php?s=&threadid=85611&highlight=options+fees
    http://www.elitetrader.com/vb/showthread.php?s=&threadid=85533&highlight=options+fees

    You can probably do a search and come up with more articles.
    I trade with ThinkorSwim.

  238. albo

    HappyTrading:

    How can I access your blog? Thanks.

  239. rileydog

    PHIL,

    Follow up comment, cut off short.

    You could set a (GTE) Good TO Enter (GTE) of

  240. rileydog

    PHIL,

    Follow up comment, cut off short. AGAIN!! GRRR!
    You could set a (GTE) Good TO Enter (GTE) of

  241. rileydog

    GTE

  242. Denis

    Any suggestion on DNDN exit.

    Have Apr $5′s from yesterday. Sell the initial pop or wait a few days to sort it out?

    Options Sage (RE:HAL) … I took some Apr $32.5′s calls yesterday at .35 and some $35′s for .10. Going to scale back the $32.5′s and let the $35′s ride for a gamble. Thanks for the heads up…

  243. Kwan

    dday – I had to look up what’s in the new bill to see what you were so offended about…you weren’t kidding!

    http://tinyurl.com/28l66p

    $40Ml for a tree assistance program to help with christmas trees and ornamental shrubs, $24M for sugar beets, $3M for sugar cane, $166M for fisheries disaster relief, $100M for compensation in dairy lossess and (I don’t know what this is) $13M for Ewe Lamb Replacement and Retention Program.

    oh look, the whole bill is available for view here http://victorycaucus.com/supplemental_senate.php?page=139 It gets even more ridiculous…exhibit A is seemingly randomly $2M that’s been inserted for the university of vermont(!?!)

  244. FTP

    Kustomz, Options Sage , Karm I thought it was one of you guys that had mentioned the easiest way to download to 1099 info to simplify accounting which was most accurate and efficient so my accountant can be handed a schedule. I found a conversation that took place a couple of weeks ago but wasn’t it. I use Etrade if any of you can help out I appreciate it.

  245. Options Sage

    Nice job Denis! I got the calls for another portfolio I trade and got an 83% return on them :-)

  246. Cap

    Sounds like a job for Jack Bauer, riley dog

  247. Cap

    End of Quarter tomorrow; fund managers, hedgies need performance to get paid.

    Be careful and remember some of the moves will be fake.

  248. Cap

    Options trading / pricing:

    Schwab charges me 9.95 trade fee + 0.75 per contract.
    That’s about $17.45 for 10 contracts, $24.95 for 20.

    Pricing at E-Trade is similar ….

    I believe I get better execution from Schwab.

  249. Cap

    Where can I get some of that House or Senate Pork ?

    Maybe for weblog research or something.

  250. Cap

    And then they want to complain about the budget deficit.

    Or clamor about the need to raise taxes on “the rich” to spend on even more pork.

  251. mab

    to happytrading: whats your blog url ?
    thanks.

  252. happyTrading

    http://www.happytradingblog.blogspot.com/
    Albo, Phil also made a link reference to it in this morning’s post. Thanks!

  253. Phil

    Welcome back Rileydog!

    I say let’s cut out the middle man and drop T. Boone Pickens right on Iran. He’ll either cause a blast crater that will take out a block or, if he survives, he can take over their markets and drive up the price of their commodities and wipe out their country’s economy instead of ours.

    =============================================

    Mr. Burns:

    BSX – Fine
    UNH – Let’s give it 5 hours of ownership before we worry.

    XOM – Someone on CNBC likes to say that they call it a strangle because you end up choking yourself every time, I kind of agree… You have 500 calls worth $50 and they are pretty useless but I would still take a DD at .10 here, with commission it will cost you maybe .12 for a .31 avg and then take 1/2 off at .35 with a .15 trailing stop. That would make for a nice recovery and is not a bad gamble on a contract that was trading between .50 and $2 until last Thursday. You need the puts for diversification anyway.

    AAPL – The worst thing you can do is go in and out of these plays, you will always take a steep loss shutting them down early (as you saw with the put play). These are not quick money plays and you are not playing to “win” every contract you sell. You have opened a store, that store is an Apple Jan $100 store that you rented for the year for $10.30. You need to sublease your space to shorter-term renters who are willing to pay a premium. Your first tennant is the May $100 who is paying you $2.70 for 2 month’s rent. All you do here is wait. The only reason you need to worry is if the May drops by more than 1/2 it’s value, at that point you need to think about selling someone the $95 instead. Otherwise, these plays are all about the waiting but make sure your projected rents cover your own total or you need to rethink your position. The difference between the May $100s and June $100s is $2.30 and you have 6 months to rent out so your projected profit is about $4 for the year so any single month where you find yourself $1.50 ahead you should seriously consider taking out your caller and either selling down (like right now the $95s are $1.50 out of the money but when they go to $2.50 out of the money the 5% rule starts to go in your favor).

    I think these are just fine except you really need a put play, but so does the folder so I’ll try to find one tomorrow.

    =================================================

    Quarterlies – well about 20,000 Qs traded today so someone is buying and selling. I always pay the penny up on these now. As I am an old fashioned nickel trader I am thrilled just to buy something for .53 instead of .55, I don’t need to get .51 to be happy. Of course it is super critical to sell early on momentum so you can pick up a little extra on the other end. If you can’t get your price though, just walk away, there’s always something to trade tomorrow.

    Good luck with those keys!

    ===================================================

    Dividend plays – not true, we did a whole thing on KMP one of our educational bits: http://www.philstockworld.com/members/?p=300 We cater to all types here!

    The stock is up 5% since we picked it on 2/19, it pays a 6.5% dividend and we covered it with a put contract that cost us $20 per month against a $5,000 position.

    My new favorite dividend payer is BEP who follow a strategy similar to my LTP but have gone nuts since I mentioned them the other day. I like them a lot on a pullback.

    Let me know any dividend plays you are considering and we’ll see if we can come up with something similar to KMP

    ================================================

    GTE – When I review the LTP (monthly) I identify plays that are still viable for entry but they get less and less as the year wears on since 7 months is not a lot of time to sell contracts against. By June I am usually only taking ’09s for the new LTP plays.

    In the STP there are really too many to constantly review for entry. If I DD, then that’s a good time to enter (actually a better time than my initial failed attempt). I haven’t done much of that lately because I haven’t been that happy with the positions due to the terrible market action we’ve been having.

    The date of my last review is always the weekend it’s posted and the days old is always a good way to double check that if I forget to put a date, which I do but then again if you download it it is dated in the file.

    I don’t want to make light of it but I think of plays as either working or not working. Like the June GOOGs I forgot I already had and I set up a new play to sell the $470s against yesterday. When I went to order the J $490s for myself I was very pleased to see I didn’t need them. So, in short, if I think a play is good, I usually just put it up again as I don’t even look at the STP to find new trade ideas.

    ==============================================

    DNDN – somebody has a rule that goes something like this “ALWAYS sell into the initial excitement.” the option prices are a factor of implied volatility which spikes as the stock gains 25% or whatever in one day – the first day that stock doesn’t gain another 25% – you’re contract will start to go down (relative to the gains it had). I would take 1/2 off the table on the initial spike and keep a comfly stop (maybe 30% of your profits) on the rest so you will capture 85% of the max profits.

    HAL – I call the $35s a “pre-roll” in that situation and the thing about a pre-roll is that you are supposed to take ALL of you in-the-money contracts off the table and then set stops on the rolls to lock in the profits you do have. As a rule of thump, as soon as I get a double on the lower calls I get out and set a stop at 50% of my “free” remaining calls. So in your particular case I would take .70 off the table and set a stop at .05 on the $35s. If it goes to $35 you will still get a buck or so for the $35s (assuming it happens soon) vs. the extra $1.80 you could have gotten on the $32.50s but, going the other way, you could blow a double and lose all of the $35s and both postions will absolutely lose value if the stock does not break higher so you are making the most logical choice for the situation.

    Literally, a bird in the hand is worth 2 in the bush.

    ===============================================

    Spending Bill – if you think that’s bad you should see the $12T worth of crap Bush already approved without a single veto in the past 6 years.

    It’s interesting that this farrrrrr right wing site never complained about a previous spending package.

    Here’s a reality check from the Chrisian Science Monitor (not to be accused of being too leftist): http://www.csmonitor.com/2006/0725/p02s01-uspo.html

    Pork earmark bills up from an average of 2,500 under Clinton to 9,000 per year under Bush, spending on this crap up from $3.1B in 1991 to $29.3Bn last year. I can tell you that virtually none of those dollars went to a Democrat for those first 6 years when Bush had the House and the Senate. Now in the first bill that has any Democratic port attached in 7 years you would think it was the end of politics as we know it – special websites and all!

    I guess the hypocrisy gets to me more than the BS spending…

  254. Cap

    “As Options Sage pointed out in comments this morning, what can we really expect from “Financial News” when our regular news is such a joke?”

    Phil, go see the new Jib Jab at jibjab.com

  255. John

    Wow, I like the sublease analogy on selling premiums.. Thanks Phil.

  256. Mr. Burns

    Very well put, thank you PHil.

  257. John

    Anybody ever use TradeKing? A buddy of mine uses them and likes them.

  258. kustomz

    Inventec Appliances may see revenues drop 30% in 1Q on declining iPod orders
    http://digitimes.com/telecom/a20070329PD209.html

  259. Robert Lowery

    Phil,
    please review and answer a question that’s bothering the heck out of me regarding HAL.

    HAL shareholders have tentered 54 +/- million shares to be traded for KBR common stock at a ratio of 1.59 to 1. Futhermore, Hal intends to distribute any remaining shares of KBR common stock following completion of exchange offer to remaining HAL stockholders by means of a special dividend.
    Question is – Why would a Hal stockholder tender his Hal stock if he will get a freebie of KBR by holding?

  260. kustomz

    AUO losses may reach NT$4 billion in 1Q… PUTS!!
    http://digitimes.com/displays/a20070329PD211.html

  261. Robert Lowery

    Gentlemen,
    I directed my question on HAL to Phil, however if anybody can shed some light …….I sure would
    appreciate the info.

    Thanks

  262. juliet

    happyTrading, I like your blog site. Thanks for sharing with us here.

    j

  263. kustomz

    FTP i think Karmcon is your man on that 1099

  264. MJ

    RT, regarding IB

    I can access the web interface even after hours. I use IB only for options which you cannot trade AH. But I think you should be able to trade stocks AH like any other broker.

    I think IB is best in terms of commissions and execution speed compared to Ameritrade.

  265. Kwan

    kustomz – I suspect Apple is aware that iPod sales are declining too given they’re trying to convince people now to buy more than one.

    http://tinyurl.com/22vthj

  266. Bill P

    John,

    I started with Tradeking and was happy with them. But I switched to Interactive Brokers (IB) for their much lower commissions. I generally trade 5-10 contracts at a time, on lower priced options, and their fees of $1.00 for the first contract and .50 for each additional contract are a lot lower than the other brokers I’ve checked. Also 100 shares of stock are $1.00 commission. Their interface is a little more complex than Tradeking, but offers a lot more info than Tradeking. Also you don’t pay extra for live feed if you execute some minimum number of trades per month and I believe you’d probably exceed that number – don’t remember what it is exactly. There may be better deals for folks who trade 100′s of contracts at a time, but this is as good a deal as I’ve found for smaller traders like me. I’ve saved a lot in commissions and they really do eat up your profits if you’re not careful. Hope this helps.

  267. Mr. Burns

    Hey folks, Has anyone been keeping up with JNJ lately?

    I was looking at the 3 month chart, they seem to (possibly) be in the swing to an uptrend. I noticed that the May 65 calls are trading at .15, up from .10 yesterday. Anyone else think these would be a good buy at .10 for the 10K portfolio? That would be a huge return to get them at .10, and sell at .15 (50% return!). Maybe someone with a focus on JNJ can weigh in on this prospect.

    Here’s a clip from an article today regarding some unusual call volume:

    The shares of Johnson & Johnson (JNJ: sentiment, chart, options) have seen some heavy trading this afternoon at their May 60 call. More than 28,000 contracts have crossed the tape on open interest of just 15,300 contracts. It looks like a pretty safe bet that most of this volume should translate into new positions. A sizeable chunk of today’s volume crossed around 10:34 a.m. Eastern in a series of large blocks.At the time of those transactions, the bid price hovered around 1.55, while the ask price bounced between $1.65 and $1.70 per contract. As a result, it appears that the bulk of today’s action could be purchases.

    Overall, call options have been a growing favorite among speculators. The stock’s Schaeffer’s put/call open interest ratio (SOIR) has dropped from 0.69 on March 26 to its current perch of 0.56. This reading is lower than 70 percent of those taken during the past 52 weeks. In other words, traders have been more bullishly aligned toward the stock only 30 percent of the time during the past year.

    Digging deeper into the stock’s sentiment backdrop, we find that Wall Street is somewhat mixed on its outlook for the consumer goods company. The security has earned eight “buy” ratings and seven “holds.”

    Meanwhile, short interest for JNJ jumped by an impressive 26 percent in March. However, the equity sports a short-interest ratio of only 1.2 days to cover. This paltry accumulation of bearish bets offers little in the way of potential short-covering support for the security.

    From a technical perspective, this growing optimism among options speculators is a concern. The stock has steadily declined under resistance from its 10-day and 20-day moving averages since late January. In fact, the shares are currently sitting on a year-to-date loss of 8.7 percent, making it the second worst loser within the DJIA (just behind Home Depot and its loss of nine percent). The security is currently testing round-number support at the 60 level.

    Here’s the link: http://www.schaeffersresearch.com/commentary/observations.aspx?ID=18726&c=obsfeed

    Thanks everyone.

  268. Bill P

    Mr. Burns,

    Not sure if the following link will work but it is a new Reuters news article I pulled from Yahoo finance and deals with “early deaths” among alzheimer patients using JNJ anti-psycotic drug. I’m not sure I’d touch JNJ – other than shorting it. But I’m not an expert on picking stocks.

    http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070329:MTFH43755_2007-03-29_23-01-07_L29536368&type=comktNews&rpc=44

  269. kustomz

    KWAN… kustomz – I suspect Apple is aware that iPod sales are declining too given they’re trying to convince people now to buy more than one

    I’m sure AAPL knows and that billboard in the Apple store is very telling, i just received an advertisement from Ford with a similar sales pitch. Companies are getting desperate when they start to offer buy one get one free. AAPL has much going for it and news of declining Ipod sales isn’t a surprise but if they fall off a cliff then AAPL shares sell cheaper, however short that time may be.

  270. kustomz

    Some great commentary from Notable calls on AAPL, worth the read. There are 2 mentions after the first AAPL article scroll down to the second for more information.
    This guy or girl is usually on the money.
    http://notablecalls.blogspot.com/

  271. kustomz

    Parts inside the ITV, http://blogs.barrons.com/techtraderdaily/2007/03/29/apple-pru-tears-down-an-appletv-heres-what-they-found-inside/

    Intel (INTC): 1 GHz Crofton CPU with 2 MB of L2 Cache; $30-40.
    Intel: Calistoga chipset; $18.
    Broadcom (BRCM): 802.11n; $15.
    Nvidia (NVDA): GeForce Go 7300 graphic processor; $14.
    Nanya: 256 MB DDR2 DRAM; $12.
    Samsung: DDR3 DRAM; $5-$10.
    Linear (LLTC): 3 step-down regulators; $5-$10.
    Realtek: Audio Codec; $5-$10.
    Marvell (MRVL): hard-drive system on a chip; $5.
    Foxlink: Various printed circuit board connectors; $5.
    Silicon Image (SIMG): HDMI output; $3-$5.
    Silicon Storage Tech: Flash memory and controller; $3-$4.
    Realtek: Mini-PCI Fast ethernet controller; $3.
    International Rectifer (IRF): FETs; $2-$3.
    Cypress (CY): Clock chip for Calistoga chipset; $2.
    Cypress: controller for flash; $2.
    Intersil (ISIL): CPU voltage regulator; $1-$2.
    Texas Instruments (TXN): various analog components; $1-$2.
    Texas Instruments: HDD motor controller; $1.
    Also in the box: a Toshiba 40 GB HDD with estimated cost to Apple of $30

    Are things really this bad for MOT, what the hells going on here. Can we attribute this weakness to a slowing economy, competition from NOK etc. or will potential cell phone buyers be looking to kill for an IPhone. Or is it just that we’re all happy with our current cell phone and we aren’t given a reason to upgrade. Cant see how Icahn can fix this unless they buy back a large number of shares and fast.
    “Multi-Fineline Electronix Trims Guidance On Weak Demand From Motorola”
    “RF Micro Sees Sales, EPS Weaker In June Quarter; Once Again, You Can Blame Motorola”

  272. kustomz

    Bank takeover rumor NAL could be one to watch. Remember key word RUMOR!!
    http://www.nhregister.com/site/news.cfm?newsid=18140858&BRD=1281&PAG=461&dept_id=590581&rfi=6

  273. kustomz

    More 787 sales for BA… thirty-nine airlines have logged 491 orders worth more than $75 billion at current list prices since the 787 launch in April 2004
    http://www.business-traveler.eu/nachrichten/5383/Boeing-Avianca-Airlines-Announce-Order-for-10-787-Dreamliners.html

  274. kustomz

    Ski trips to Canada those were the days, it was nice and cheap but those days are gone. My US dollar has lost its luster.
    http://www.bloomberg.com/apps/news?pid=20601082&sid=auTYhhbPPxTc&refer=canada

  275. Bryan

    kustomz,

    You are truly awesome.

    I hope I crashed into you on one of those days at Whistler.

    OLED panels coming soon, think very thin skins.

  276. ramana

    Markets : Friday, March 30, 2007

    Japan*

    17287.65
    23.71
    0.14%

    Hong Kong*

    19800.93
    -20.85
    -0.11%

    China: DJ Shanghai*

    299.11
    0.84
    0.28%

    S.Korea*

    1452.55
    1.60
    0.11%

    India

    13103.17
    123.51
    0.95%

    * at close
    Sources: Dow Jones, Reuters

  277. Bill P

    Kustomz/Ramana – thanks for the great data this morning.

  278. RT

    John,
    I use TradeKing and have had no problems. Their commissions are good but as Bill P mentioned, if you are a frequent trader then IB could beat ‘em. Also, TradeKing’s platform is extremely slow and definitely not suitable for daytrading , but otherwise no issues.

  279. Bill P

    DNDN – Stock at 17.00 in premarket and going up! Kaching, kaching!

  280. Bill P

    DNDN – $18.50 putting a $1.00 trailing stop on the stock I bought yesterday. Up 250%!

  281. Phil

    Inventrec – that is their problem, not Apple’s – they lost a contract.

    ================================================

    HAL – hard to say, exchange math is way beyond calculus. There’s all sorts of tax considerations as well as the possibility of getting less or more than you think if you don’t offer up your shares at the outset. I’ve seen holdouts get reemed in distributions but, occasionally, they do end up with a bonus but I sure wouldn’t want to play that game.

    This is another one of those little ways that insders stick it to common shareholders as it is always very clear to them which way to play it.

    =================================================

    AUO – might be baked in already but that certainly does sound awful!

    =================================================

    JNJ – the $65s are too speculative for the $10KP, it costs you 50% just to buy them. On the other hand, I like the May/April $60 spread for .65 net since the April $60s are $1.05 then it’s likely that if we get to Apr 20th at $60 or higher you will probably get a nice .30+ profit.

    That’s a nice $10KP play but there’s no reason to do it over a risky weekend. Let’s keep this in mind for next week.

    =================================================

    I think we are moving into the usual pre-earnings Apple bashing to shake out the weak hands.

  282. Bill P

    And the better the AAPL earnings report, the more the stock will go down…

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