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New York
Thursday, March 28, 2024

Another Wild Weekly Wrap-Up

It's Father's Day this weekend and, being one myself, I have a full agenda so I'll be keeping this week's note brief:

It's been a crazy week but I LOVE expiration day as it seemed to come just in time to save us from a bunch of runaway callers we had sold.  As I said in the morning: "Rising 200 points, dropping 500 points and then rising 300 points hardly feels like consolidation when you are experiencing it, but that’s all it really is in the grand scheme of things."

We added another 85 points to the Dow for good measure as the predicted onslaught of money came flowing into the markets as the BOJ and the Fed gave us the word to "Party On" in the morning.  No one was at all suspicious that the CPI report  (which is rounded to the nearest tenth of a percentage point) came in at .149%, allowing it to be reported, without fail as being just .1% so we decided to drink the Kool Aide, spiked though it may be.  After all, what's the difference between .1% and .15% anyway?  Well, since you asked, it's a monthly increase so over 12 months the difference is .6% of a $13 Trillion economy or $78Bn of additional costs borne by US consumers that are being swept under the rug.

Of course that's being VERY kind since we are pretending the "core" CPI is based in some reality as costs for non-core items like gasoline (for example) were up 10.5%.  If we lived in some fictional planet where people used gas and oil or ate food the CPI would be a whopping .7% or 8.4% a year or $1,092,000,000,000 of costs in order for American consumers to buy the same goods they bought last year for "just" $13 Trillion.  Thank goodness we got that $300 tax cut or we'd probably be falling behind!

Throwing money at the problem has been the Fed policy since 9/11 when money was spent everywhere on everything (except NY where the actual attack took place and promised relief never fully  materialized).   As Barry Rhitholz points out in his article "There's No Inflation — Except for Necessities" it's the height of irony that the WSJ would print and discuss the .1% "core" CPI number without comment when they've just announced that next month the paper will go up in price from $1 to $1.50, up a stunning 50% and the Financial Times (who certainly couldn't have colluded with the Journal as to the timing) are raising prices 30% but that's in British Pounds so that's like 60% to us!  Gee guys, since the core CPI is up just 1.8% for the year, couldn't you just charge $1.02 and make a nice juicy profit?

Barron's has a bullish roundtable discussion this weekend, certainly worth reading and, as I said yesterday, if everyone's having a party – then let's party!  While the imaginary "non-core" CPI is at the highest rate since April of 1999, I noted yesterday in comments that the market didn't really crash until January  of 2000, and that is 12 months you REALLY don't want to miss!  The Dow went from 7,500 in October 1998 to 9,500 in April of 1999 and broke 11,000 by mid-May.  After consolidating around 11,000 and taking a dip to 10,000 in October of 1999, the Dow made a final surge to 11,700 in mid-January followed by a drop back to 9,700 just 60 days later. 

And that was calm compared to the Nasdaq!  The Nasdaq went from 2,500 in June of 1999 to 5,050 in March of 2000 before dropping back to 3,000 in just 60 days.  Let's keep that in mind as we talk about our virtual portfolios because, although I made a call to go half cash perhaps a little early, it's nice to know you have it in case the markets start to go to hell.  If the virtual portfolio doubles again in a continued mega rally, we'll make 50% on the total rather than 100%, I can live with that knowing that a 50% drop will only cost us 25% of that same virtual portfolio (and we are already up huge on the year).

This week, being a very busy expiration week, we closed out 122 positions with an average gain of 90% on 18 average days open.  I finally figured out a new system that makes me happy but I only figured it out on Wednesday but I can now transfer the gains from the sale of a cover play into the basis of the root position as long as I remember to do so before I close it.  This is much better for me as I prefer to track my positions from a "remaining capital at risk" view, which helps me make much better sale decisions.  That means members will now see positions closing out with the adjusted basis rather than having the adjustments made in the note section of the spreadsheet.

In short, this means that if I have a GOOG Sept $110 call that I bought for $15 and I sell a GOOG June $110 against it for $5 which expires worthless – rather than post the $5, 100% gain to cash I post the "gain" to the basis of the Sept $110 call which reduces it to $10 which helps me get a much better idea of where I stand on the position over time since it keeps the collected money attached to the position it belongs to rather than dropping it back in general cash.  This is more in line with my philosophy of "it's not a gain until you cash it out" and also allows us to make better stop and double down decisions on the longer plays since we are generally in them for the long haul.

In the shorter haul, we posted a huge jump in our open Short-Term Virtual Portfolio positions as so many of our callers expired worthless, despite the market rally as it never quite came back to where we sold most of them 2 weeks ago when I hit the SELLSELLSELL button but not for our positions, we just sold rentals to others while we rode out the dip!  This leaves us back with a pretty bullish bunch, but well protected by our DIA puts.  Our 69 remaining open positions (down 15 from last week) are up 96%, which is really great as that's a gain of 22% over last week and half the virtual portfolio remains in cash (pat, pat).

The Long-Term Virtual Portfolio has a much more conservative profile and the same 35 open positions there are up a total of 107%, just 2% more than last week as we mainly rolled to July callers there and they went down AND back up with us in the last 10 days.  More than anything else, that 2% represents the relative time-decay advantage our leaps have over the closer puts and calls we sold.

The $10,000 Virtual Portfolio is a disaster!  It's always bad when you do a calendar spread and the front-month contracts make big gains and boy did we pick a bunch of winners.  On paper we are down 40% so far but there's still a lot of premium in our callers and we have a few months to go but it's a great disappointment to get off to such a rotten start.  The biggest problem here is that our cover play, FWLT puts, turned into a nightmare, jumping 8% since we bought them and our naked calls on DIS and TWX both went the wrong way on us.  We are more than half cash in that virtual portfolio but not intentionally and I will be putting a lot of effort into turning this one around next week!

 

Not at all disappointing was our new Complex Spread Virtual Portfolio, which is now up 30% in just 3 weeks and required virtually no maintenance during the dip and recovery.  19 open positions remain there but we have to watch our Apple calls very carefully as we lost our protective Iron Butterfly that was designed to pay off if Apple finished around $110 (not even close!).

Even our ho-hum Stock Virtual Portfolio improved slightly for the week with 10 positions there finishing up 32% to date, a 2% improvement over last week.  We are pretty bullish in that virtual portfolio with too much money in MU and FIZZ, both of which are unprotected after having very good runs.

Our Free Picks Virtual Portfolio had an amazing week because we only had $16K in play at the beginning of the week with a $58.5K total value (up 134%) and we managed to drop our cash in play down to just $7,900 on 10 positions and a $60.5K total value – that's being cautious with style!  The difference between the Free Picks and the $10K virtual portfolios is mainly that I was overly cautious with the $10KP and I boxed it into a hole.  I'm not worried it will lose money but it may take a month or two to work itself out and that's very frustrating.  Starting the Free Picks virtual portfolio with $25K made the world of difference in the choices we were able to make…

I hope everyone had a fun week, it sure was exciting and I just can't wait to see what's going to happen next!  A very happy Father's Day to those of you who are so inclined and my condolences to the women out there who rightly may feel that every weekend is Father's Day so what's all the fuss about…

All the best,

– Phil

 

Description

  Basis

Open

 Sale Price

Close

 Gain/Loss

%

10 JUN 15.00 $VIX CALL (VIXFC)  $            6/13

 $       940

6/15  $      940 100%
30 JUN 120.00 AAPL CALL (QAAFD)  $       760 5/31  $    2,240 6/15  $   1,480 195%
5 JUN 100.00 AAPL PUT (QAART)  $        35 6/4  $            6/15  $      (35) -100%
5 JUN 110.00 AAPL PUT (QAARB)  $            6/4  $       165 6/15  $      165 100%
5 JUN 110.00 AAPL CALL (QAAFB)  $    5,135 6/4  $    5,140 6/15  $         5 0%
5 JUN 120.00 AAPL CALL (QAAFD)  $    1,560 6/4  $       240 6/15  $  (1,320) -85%
10 JUN 125.00 AAPL CALL (APVFE)  $            6/7  $       (10) 6/15  $      (10) 100%
10 JUN 42.50 ADBE CALL (AEQFV)  $       210 6/7  $    1,980 6/15  $   1,770 843%
7 JUL 70.00 AIG CALL (AIGGN)  $    1,900 6/7  $    1,950 6/14  $       50 3%
40 JUN 42.50 AMZN PUT (ZQNRV)  $       210 4/24  $            6/15  $     (210) -100%
50 JUN 72.50 AMZN CALL (ZQNFD)  $       610 6/15  $    1,240 6/15  $      630 103%
16 JUN 12.50 AUY CALL (AUYFV)  $       650 6/7  $    2,150 6/15  $   1,500 231%
20 JUN 40.00 AVP CALL (AVPFH)  $       610 4/26  $            6/15  $     (610) -100%
15 JUN 65.00 AXP CALL (AXPFM)  $            5/22  $       290 6/15  $      290 100%
50 JUN 65.00 AXP CALL (AXPFM)  $            5/31  $    1,240 6/15  $   1,240 100%
40 JUN 95.00 BA CALL (BAFS)  $    8,010 4/26  $  11,390 6/12  $   3,380 42%
5 JUN 47.50 BBY CALL (BBYFW)  $       110 5/18  $       265 6/15  $      155 141%
5 JUN 47.50 BBY CALL (BBYFW)  $       110 6/5  $       165 6/15  $       55 50%
20 JUN 40.00 BEAV CALL (BQVFH)  $       210 6/4  $    1,190 6/15  $      980 467%
10 JUN 150.00 BSC PUT (BSCRJ)  $    1,260 6/14  $    1,390 6/15  $      130 10%
30 JUL 50.00 BTU PUT (BTUSJ)  $    1,960 5/24  $    5,690 6/13  $   3,730 190%
10 JUN 55.00 CCJ CALL (CCJFK)  $       210 6/5  $        40 6/15  $     (170) -81%
40 JUN 55.00 CCJ CALL (CCJFK)  $    1,010 6/15  $    2,510 6/15  $   1,500 149%
10 JUN 550.00 CME PUT (CNMRJ)  $    2,660 6/12  $    3,490 6/12  $      830 31%
10 JUN 550.00 CME PUT (CNMRJ)  $    2,660 6/12  $    6,490 6/13  $   3,830 144%
50 JUN 27.50 DELL CALL (DLQFY)  $    1,510 6/6  $    1,990 6/15  $      480 32%
50 JUN 27.50 DELL PUT (DLQRY)  $            6/6  $       240 6/15  $      240 100%
60 JUN 35.00 DIS CALL (DISFG)  $            6/6  $       (10) 6/15  $      (10) 100%
120 JUN 35.00 DIS CALL (DISFG)  $            6/7  $       (10) 6/15  $      (10) 100%
20 JUL 75.00 DNA CALL (DWNGO)  $    5,610 6/4  $    9,990 6/13  $   4,380 78%
20 JUN 10.00 DNDN CALL (UKOFB)  $            5/31  $       (10) 6/15  $      (10) 100%
120 JUN 35.00 EBAY CALL (XBAFG)  $    7,210 5/14  $            6/15  $  (7,210) -100%
100 JUN 32.50 EBAY CALL (XBAFZ)  $            5/16  $       (10) 6/15  $      (10) 100%
40 JUN 25.00 FNF CALL (FNFFE)  $            6/11  $    5,990 6/15  $   5,990 100%
20 JUN 60.00 GCI CALL (GCIFL)  $       410 6/7  $            6/15  $     (410) -100%
20 JUN 65.00 GENZ CALL (GZQFM)  $    2,210 5/31  $    1,790 6/12  $     (420) -19%
20 JUN 25.00 GLW CALL (GLWFE)  $    1,210 6/7  $    1,690 6/13  $      480 40%
5 JUN 500.00 GOOG PUT (GOPRO)  $    1,510 6/4  $    2,740 6/13  $   1,230 82%
5 JUN 500.00 GOOG CALL (GOPFO)  $            6/4  $    5,940 6/15  $   5,940 100%
5 JUN 490.00 GOOG PUT (GOPRK)  $    1,485 6/4  $            6/15  $  (1,485) -100%
10 JUN 510.00 GOOG CALL (GOPFU)  $    1,010 6/6  $  13,990 6/13  $ 12,980 1285%
100 JUN 510.00 GOOG CALL (GOPFU)  $  25,010 6/12  $  32,490 6/12  $   7,480 30%
10 JUN 500.00 GOOG CALL (GOPFO)  $    2,010 6/13  $    3,490 6/15  $   1,480 74%
5 JUN 500.00 GOOG PUT (GOPRO)  $            6/13  $    1,240 6/15  $   1,240 100%
60 JUN 510.00 GOOG CALL (GOPFU)  $    1,810 6/15  $            6/15  $  (1,810) -100%
20 JUN 500.00 GOOG CALL (GOPFO)  $    6,010 6/15  $  14,190 6/15  $   8,180 136%
5 JUN 30.00 HLYS CALL (UYDFF)  $        60 6/7  $       690 6/15  $      630 1050%
30 JUN 40.00 HRL CALL (HRLFH)  $    1,810 11/13  $            6/15  $  (1,810) -100%
5 JUL 205.00 ILF PUT (IFBSI)  $    3,410 6/7  $    1,990 6/13  $  (1,420) -42%
20 JUN 22.50 INTC CALL (NQFX)  $       810 5/3  $    3,390 6/15  $   2,580 319%
5 JUN 15.00 IRBT CALL (IRQFC)  $       510 5/18  $       840 6/11  $      330 65%
20 JUN 65.00 ISE CALL (ISEFM)  $       210 6/1  $    1,590 6/15  $   1,380 657%
10 JUN 65.00 JNJ CALL (JNJFM)  $            6/1  $       (10) 6/15  $      (10) 100%
20 JUN 17.50 JSDA CALL (QJDFW)  $            6/6  $       190 6/15  $      190 100%
17 JUN 20.00 KNOT CALL (BQCFD)  $       724 6/7  $    1,265 6/15  $      541 75%
10 JUN 52.50 KO CALL (KOFX)  $            5/18  $       (10) 6/15  $      (10) 100%
20 JAN 80.00 LVS PUT (LKNMP)  $    4,110 2/2  $  17,590 6/15  $ 13,480 328%
5 JUN 110.00 MA PUT (MARB)  $    1,460 5/2  $            6/15  $  (1,460) -100%
30 JUN 75.00 MO PUT (MORO)  $  13,510 5/30  $  12,890 6/14  $     (620) -5%
30 JUL 75.00 MO PUT (MOSO)  $  13,210 5/30  $  13,200 6/15  $      (10) 0%
50 JUN 19.00 MOT CALL (MOTFT)  $            5/18  $       (10) 6/15  $      (10) 100%
20 JUL 130.00 MRO CALL (MROGF)  $    9,010 6/4  $    8,190 6/14  $     (820) -9%
20 JUN 125.00 MRO CALL (MROFZ)  $    4,810 6/4  $    9,790 6/14  $   4,980 104%
120 JUN 30.00 MSFT CALL (MSQFK)  $    3,010 6/7  $    5,390 6/13  $   2,380 79%
100 JUN 30.00 MSFT CALL (MSQFK)  $    2,510 6/7  $    4,490 6/13  $   1,980 79%
40 JUN 12.00 MU CALL (MUFN)  $       410 6/12  $       990 6/12  $      580 142%
20 JUN 22.50 NFLX CALL (QNQFX)  $            6/6  $       190 6/15  $      190 100%
20 JUN 25.00 NYT PUT (NYTRE)  $    2,110 5/1  $            6/15  $  (2,110) -100%
4 JUN 85.00 NYX CALL (NYXFQ)  $            6/4  $       290 6/15  $      290 100%
20 JUN 180.00 OIH CALL (ODLFP)  $            6/4  $    1,990 6/15  $   1,990 100%
10 JUN 170.00 OIH PUT (OIHRZ)  $    1,010 6/11  $    2,590 6/12  $   1,580 156%
40 JUN 175.00 OIH PUT (ODLRO)  $            6/14  $       190 6/15  $      190 100%
300 Cambridge Display Tech. Inc. (OLED)  $    1,564 5/10  $    1,490 6/15  $      (74) -5%
3 JUN 5.00 OLED CALL (UMEFA)  $            5/10  $       215 6/15  $      215 100%
10 JUN 25.00 OXPS CALL (QYBFE)  $       710 5/21  $    1,090 6/11  $      380 54%
20 JUL 27.50 OXPS CALL (QYBGY)  $    1,310 6/12  $    1,990 6/11  $      680 52%
25 JUN 73.38 POT CALL (PVZFV)  $    2,510 6/7  $    5,615 6/13  $   3,105 124%
25 JUN 73.38 POT CALL (PVZFV)  $    2,510 6/7  $    9,990 6/14  $   7,480 298%
10 JUN 130.00 PTR CALL (PTRFF)  $    1,810 6/9  $    7,390 6/14  $   5,580 308%
10 JUN 135.00 PTR CALL (PTRFG)  $    1,760 6/9  $    4,990 6/14  $   3,230 184%
10 JUL 42.50 QCOM CALL (AAOGV)  $    1,410 6/7  $    2,140 6/12  $      730 52%
20 JUL 48.00 QQQQ PUT (QQQSV)  $    2,210 5/31  $    2,390 6/14  $      180 8%
100 JUN 47.00 QQQQ CALL (QQQFU)  $    2,010 6/9  $    3,590 6/13  $   1,580 79%
5 JUN 25.00 RHT CALL (RHTFE)  $            6/5  $       (10) 6/15  $      (10) 100%
30 JUN 190.00 SHLD CALL (KDUFR)  $    6,150 2/15  $            6/15  $  (6,150) -100%
10 JUN 190.00 SHLD CALL (KDUFR)  $    2,060 2/15  $            6/15  $  (2,060) -100%
20 JUN 180.00 SHLD CALL (KDUFP)  $       210 5/18  $    9,990 6/13  $   9,780 4657%
10 JUN 180.00 SHLD CALL (KDUFP)  $            5/18  $    5,240 6/15  $   5,240 100%
4 JUN 180.00 SHLD PUT (KDURP)  $    2,050 5/25  $    1,790 6/15  $     (260) -13%
4 JUL 185.00 SHLD CALL (KDUGQ)  $       370 5/25  $    1,790 6/15  $   1,420 384%
4 JUN 180.00 SHLD CALL (KDUFP)  $    1,690 5/25  $            6/15  $  (1,690) -100%
30 JUN 180.00 SHLD CALL (KDUFP)  $            6/11  $    1,800 6/15  $   1,800 100%
20 JUN 175.00 SHLD CALL (KDUFO)  $            6/12  $       990 6/15  $      990 100%
100 JAN 2.50 SIRI CALL (OAJAZ)  $    5,510 4/16  $    9,490 6/11  $   3,980 72%
20 JUN 22.50 STZ CALL (STZFX)  $    2,510 6/7  $    1,890 6/11  $     (620) -25%
90 JUN 70.00 SUN PUT (SUNRN)  $    3,610 5/17  $            6/15  $  (3,610) -100%
90 JUN 80.00 SUN PUT (SUNRP)  $            6/12  $    8,990 6/15  $   8,990 100%
10 JUN 25.00 SWIR CALL (IYQFE)  $       460 6/11  $       490 6/15  $       30 7%
10 JUL 40.00 T CALL (TGH)  $       760 6/7  $    1,240 6/13  $      480 63%
20 JUN 10.00 TASR CALL (QURFB)  $    1,610 5/25  $    1,390 6/11  $     (220) -14%
20 JUN 35.00 TIE CALL (TIEFG)  $            5/29  $       (10) 6/15  $      (10) 100%
20 JUN 125.00 TM CALL (TMFE)  $       510 6/6  $    2,790 6/13  $   2,280 447%
30 JUN 125.00 TM CALL (TMFE)  $       610 6/6  $    4,490 6/13  $   3,880 636%
25 JUL 60.00 TSO PUT (TSOSL)  $    5,385 6/1  $    8,990 6/13  $   3,605 67%
20 JUN 67.50 TSO CALL (TSOFT)  $    1,210 6/4  $            6/15  $  (1,210) -100%
20 JUN 65.00 TSO CALL (TSOFM)  $            6/4  $    2,890 6/15  $   2,890 100%
30 JUN 60.00 TSO PUT (TSORL)  $       310 6/12  $    6,890 6/14  $   6,580 2123%
4 JUN 60.00 TSO PUT (TSORL)  $            6/12  $       (10) 6/15  $      (10) 100%
20 JUN 35.00 TXN CALL (TXNFG)  $    1,010 5/18  $    3,290 6/14  $   2,280 226%
10 JUN 55.00 UNH CALL (UHBFK)  $            5/18  $       (10) 6/15  $      (10) 100%
10 JUN 51.00 USO PUT (USORY)  $       610 6/7  $       290 6/14  $     (320) -53%
50 JUN 75.00 VLO PUT (ZPYRO)  $    5,510 6/6  $    7,990 6/13  $   2,480 45%
15 JUN 75.00 VLO PUT (ZPYRO)  $    1,510 6/9  $    1,865 6/13  $      355 24%
10 JUN 60.00 WFR CALL (WFRFL)  $            5/18  $       (10) 6/15  $      (10) 100%
5 JUN 95.00 WYNN CALL (UWYFS)  $       560 6/6  $    1,690 6/13  $   1,130 202%
20 JUN 125.00 X CALL (XFE)  $    5,510 6/8  $            6/15  $  (5,510) -100%
20 JUN 120.00 X CALL (XFU)  $       410 6/9  $  16,790 6/13  $ 16,380 3995%
20 JUN 120.00 X CALL (XFU)  $       410 6/9  $  12,590 6/13  $ 12,180 2971%
20 JUN 110.00 X CALL (XFB)  $    8,810 6/12  $  16,990 6/12  $   8,180 93%
50 JAN 75.00 XOM PUT (XOMMO)  $  12,010 3/7  $  10,490 6/14  $  (1,520) -13%
50 JUN 80.00 XOM PUT (XOMRP)  $       260 6/9  $    2,490 6/14  $   2,230 858%
150 JUN 80.00 XOM PUT (XOMRP)  $            6/9  $       (10) 6/15  $      (10) 100%

 

 

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