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Friday Virtual Portfolio Moves

 October 12th, 2007 at 9:38 am | Permalink   edit

Cash cash cash – taking calls off the table.

October 12th, 2007 at 9:41 am | Permalink   edit

I’m wondering who will win:

Will Apple lift the Nas?
Will GOOG come back
Will BIDU be the weight that drags it down?

PEP making a comeback.
PLCE making a comeback.

Seems like bargain hunting to me – that could just be perma-bulls shopping but let’s grab AKS $50s as a mo play, looking for them to break over $49.50 or dump it. XXX

October 12th, 2007 at 9:43 am | Permalink   edit

Scratch that AKS, November $50s at $2.90, sell the current $50s if it breaks below $48.50. XXX

October 12th, 2007 at 9:52 am | Permalink   edit

Cash is tight stops on winners. There’s no way to guess the direction so, as long as you are reasonable balances, it’s best to just start taking profits off the table, we can use the profits to save other positions later. Don’t forget tomorrow started with a 100-point gain and didn’t end so good.

MAR breaking out, I like the $40s as a mo play at $2.20, stop at $2, looking for $3 (.25 Tstop there). XXX

October 12th, 2007 at 10:12 am | Permalink   edit

BEAS – no, by all means don’t take a 1,500% profit in a week. Good traders do that every day (extreme sarcasm!).

RULE #1: ALWAYS SELL INTO THE INITIAL EXCITEMENT

RULE #2: WHEN IN DOUBT, SELL HALF

RULE #3: IF YOU DIDN’T FOLLOW RULE #1 OR RULE #2, WHY THE HELL WOULD I BOTHER WITH A RULE #3?

Any other questions, kindly see Rule #1. Thank you.

HXL – the DD was at $2 but if you caught the DD and have a chance to get out even on half, well, that’s kind of Rule # 2 isn’t it?

PTR gone wild, up $15. Turkey on the warpath!

Oct callers – if there’s premium left I’d rather keep them for weekned insurance, won’t change the roll any.

GOOG may come back like CME very soon. Tough call but I could do without callers unless they break back below $622. XXX At $640ish I’d want to have callers again (the $630s).

October 12th, 2007 at 10:38 am | Permalink   edit

HMY – I’m still trying to DD at .15!

October 12th, 2007 at 10:40 am | Permalink   edit

AMGN waking up.

PTR – rolling up to $200 callers at $4.50, turning it into a mo play and hoping for a pullback. XXX

October 12th, 2007 at 10:40 am | Permalink   edit

Damn, that was PTR $200 putters.. What time can I start drinking?

October 12th, 2007 at 10:55 am | Permalink   edit

CSCO back on the move, missed the beginning but I don’t mind Nov $32.50s as we can sell the current ones for protection. XXX

October 12th, 2007 at 11:31 am | Permalink   edit

BIDU puts are insanely expensive right now.

Market looks ready to rock and roll. Not a very creative rally, just same old, same olds making a comeback. GRMN, DRYS, GOOG…

You can’t be too short in this environment because a clear message is being sent that selling the high flyers is a mistake. Waiting to buy is a mistake. Thinking there’s a top is a mistake. There are all the psychological games the big boys play to train you (the retail investors) to take their huge positions off their hands before they tank the markets.

This probably means we have a bit more time for this nonsense because it costs a lot of money to pull an institutional reversal like this so the people pushing the Qs must be very, very deep in it so they need record headlines. That’s why there’s the adage that by the time the story makes the cover of time it’s already over – getting the markets on the cover of consumer magazines is mission accomplished for manipulators, that brings in the flood of new money that they can sell into.

As I mentioned above, the top 1% have gained 5% of the nation’s wealth in the past 3 years. First in housing, now in stocks. Now that play has run it’s course it’s time to go to cash so the move is to get out of the markets and pour money into bonds, which can spike our currency (a double win) as well as rates.

Remmeber we discussed yesterday that just 20 funds control 1/3 of our nations assets – don’t think they have all that power and don’t use it…

So fundamentals continue not to matter and, as long as we keep our eyes open, we will have lots of good opportunities in both directions but – if the big boys say buy on the dips, we need to learn to say “how much would you like me to buy SIR” for as long as the game will last.

October 12th, 2007 at 11:34 am | Permalink   edit

OII strangely weak.

OK, my AKS and MAR are officially on their way now.

BA making a comeback.

OXPS looking to get back in gear. I don’t know why I ever sold them. Nove $30s are .62 and that’s fun for 10 in the $10KP and $25KP XXX

October 12th, 2007 at 11:47 am | Permalink   edit

CHK – ouch, we uncovered those long ago. You may as well keep them for insurance value unless you intend to roll them to the Nov $35s with just a .60 premium (nothing wrong with it, just dull). I would go to 2x Nov $37.50s (gives you .20) and 2x Jan $37.50 (costs you .75) as a roll out. If you don’t want to spend money you can also roll yourself back to the Apr $37.50s for .25 in your pocket and roll him to the Jan $37.50s which will take that quarter right back. Also very, very dull…

Things are weakeingin here I think (very not sure), be careful, take downturns seriously…

October 12th, 2007 at 11:53 am | Permalink   edit

INFY/Cash Call – Cash OR cover. A good cover is as good as a cash out but a little dicey with Nov/Oct plays but a 2/3 or 3/4 ratio solves that.

LTP – BA for sure, ‘09 or ‘10 $100s at this price. You can also take the ‘10 $110s and wait a while to sell or sell if you have the margin for it. Otherwise, I’ll try to run a review over the weekend.

Have to recover GOOG if we break $626, looks like we will.

October 12th, 2007 at 12:00 pm | Permalink   edit

BXP – don’t worry, look at VNO (and we were supposed to get both). The spread in BXP is ridiculous, I forgot that’s why I don’t usually play them even though I know that sector like the back of my hand. I can’t see these guys skating through the next 5 weeks without something hitting the fan in the commercial realty space.

Watch, the bid is $1.05 and I’m going to offer $1.20 and no one will sell it to me but it will make you feel better when you look at your account… Probably I could offer $1.50 but my basis is $1.55 so no point in that.

October 12th, 2007 at 12:05 pm | Permalink   edit

PTR – still waiting for my morning puts to kick in.

All energy flying into the weekend, I’ll be shorting XOM with the Nov $90s but BTU stopped me out.

 October 12th, 2007 at 12:34 pm | Permalink   edit

BIDU turning south again. Buyers heading for RICK (what the hell, it’s Friday) but otherwise it’s dried up a lot.

WFMI making a move again! Might actually get somewhere if they break $51 but otherwise I would bet the week’s groceries on the $50 puts at .45.

Wow, so much for a downturn – like I said, not short play goes unpunished in this market…

Watch the FXI – that was our best signal yesterday (and a nice put!).

GM putting in new highs.

YRCW – it’s funny because they are such a good company. I have to go with the Jan ‘09 $30s at $3.85 here and sell the Nov $30s at .70 for obvious mathematical reasons (plus someone just asked for a new LTP play). XXX

October 12th, 2007 at 12:37 pm | Permalink   edit

I still don’t like the “feel” of this rally. It feels empty inside but there’s nothing I can point to just yet…

October 12th, 2007 at 1:01 pm | Permalink   edit

INFY, with the 10 Nov $55s, you can cover with 6 Oct $50s, thats about a 2/4 cover and nets you a .61 premium (or 60% of that per contract) and your additional shares protect you from a big run-up but, more importantly, gives you really good downside protection on your $1.20 calls without forcing you to sell.

MAR – that’s what we were just talking about at the end of Thursday’s post. Hard stops are very bad as you will always get taken out on a spike. At the point MAR hits $2 you should take a very careful look at the overall market and the chart (the 10-minute chart DM!) and the sector before dumping out. Or you can just ask me!

FWLT on the march again along with the OIH at $200. XOM looking a little toppy with the Nov $95 puts at $3.60, which I already have so I’m pre-rolling to the Nov $90 puts at $1.50. XXX for that extra 30%.

October 12th, 2007 at 1:03 pm | Permalink   edit

Covered 2/3 AKS with $50s at $1.40 XXX

October 12th, 2007 at 1:19 pm | Permalink   edit

PFE – no way do I give that guy .25 for the calls. We want PFE to flatline at $25, no way will I pay him $590 out of my $10KP!

GOOG Mar/Oct $560. Too far in the money. Best is to roll him to 2x the Nov $620s (even) and roll yourself to 2x the Jan $620s (cost a buck or two). That takes him out of $66 worth of intrinsic value (you owe him) and puts him into $56 (per original contract) of premium at no cash cost to you but giving up 2 months of gains plus your own intrinsic – which wasn’t doing you any good anyway as you were still at $37 in premium out there.

Think of it as you going from $37 in premium to $47 in premium while he goes from $4 in premium to $28 in premium but he’s still covering 65% of your value, about the same as the current caller.

SHLD – I’d stand pat for the weekend, I’m not loving this rally.

Sell PTR puts? No, that’s WAY too dangerous. I can’t let go of my $200 puts myself but I really should…

BIDU coming down nicely. FXI looking to confirm if it breaks $197 but I’d go with the $190 puts now at $2.85, stopping at $2.50. XXX

 October 12th, 2007 at 1:20 pm | Permalink   edit

ANF $80 puts for .70 XXX

October 12th, 2007 at 1:22 pm | Permalink   edit

Oh this is that downturn I’ve been feeling – we’ll see if it follows through but now the market feels right to me! Check out today’s insane VIX action!

October 12th, 2007 at 2:03 pm | Permalink   edit

HXL – had to take the .50 to cover at this point.

YHOO holding up well

CMG was the reason I loved MCD last year but I thought they were overpriced on the spin-off. Good for MCD either way so that’s how I played it but now I wish I’d gone with CMG. Seems insane at this price though, I’d have to use my WFMI logic – It’s a FAST FOOD RESTAURANT WITH A 5% NET MARGIN!!! I do agree with Cramer on PEG, 2 is a little high for any sector and certainly this one…

GM – you should have taken putter out a while ago and rolled him up. You need to roll to the $40 put for $2.30 and sell the Nov $40 put for $1.55. You have nothing to fear on the downside, it’s the upside that will kill you if you let it get away.

October 12th, 2007 at 2:35 pm | Permalink   edit

UTX/all covers – I won’t be giving up any protection into the weekend.

Well nothing is staying down so cashing out on the bull run was the right call – just have to wait to see what Monday brings.

ATI down on demand for exotic metals, not steel per se. They should recover with BA, TIE, BEAV and AIR (the Boeing Buddies).

THESE ARE $10KP/$25KP PLAYS THAT APPLY TO ALL

CAKE – the call was to sell the Oct $25s if it dipped below $25, which it did on Monday, not doing that was very expensive…

At this point you sell the Nov $22.50s for $2.08 and roll yourself down to the Apr $22.50s for .75.

FNF – not a problem. He has $590 in premiums you will collect by Friday.

GM – I don’t think that was ever a $10KP play was it? Roll to Jan/Nov $40s and collect $1

HMY – That’s a DD at .15

INFY – did 2/3 sell earlier.

NFLX – if I do a play in the $25KP and not in the $10KP and you only have $10K, then the play is not risk appropriate for you! Still, he has $840 worth of premium to give you in 5 days, patience is the key to learning how to trade…

Naked TSO puts? So wrong for you! Roll back to a Jan/Nov $50 spread and collect .50.

October 12th, 2007 at 2:40 pm | Permalink   edit

Double – weekend is great to call me. During the week I have no time for anything…

PTR – I’d go for the premiums on the $210s ($8 of it) and spread the Jan $220s at $23.90 against the $210s if you have the margin for it as it would take a $30 drop for you to fall to $14 and, even if he comes in the money, you can roll him to the Nov puts, which currently have another $17 in premium, that would put you into a free trade with a 2 month spread a week from Monday. XXX

October 12th, 2007 at 2:41 pm | Permalink   edit

PTR – ps, the bonus to that is it gives me an excuse to hold my puts!

October 12th, 2007 at 2:57 pm | Permalink   edit

GOOG making their daily $10, I should have just stuck with it!

ANF – it was buying puts. Getting less fun now with the “recovery”

October 12th, 2007 at 3:06 pm | Permalink   edit

AUY – that’s funny! For 18% in 6 months I WILL make sure AUY stays over $11.23!

I need to go to funamentals school again with oil at $83 and the markets on fire on the same day the PPI shows a 13% inflation rate due to energy prices and energy going up another 1% on the same day. I mean really, is it me or it it everyone else?

GM Jan/Nov $40 puts for $1 XXX to play the madness

October 12th, 2007 at 3:53 pm | Permalink   edit

4 Horsemen – If I’m not mistaken, they rise up and ascend which is the sign of the coming apocalypse so I’m not sure if we should be giving them a welcome party. Cramer is a very well-read guy, surely he knows this and I wonder if this is a private little joke he has knowing that insane valuations in the tech sector are probably a sign that the end is near.

SYMC – Sage loves those ratio spreads, I find them a little slow to develop for my tastes (in this market, in a slow market I love them too). SYMC is not that safe, especailly ahead of MSFT earnings as they are constantly picking on that space. If you are playing a rumor, go longer and sell more (maybe 2/3), it gives you more time to adjust.

GOOG earnings – that’s another thing you guys need to remind me of this weekend.

CAKE – I wasn’t sure at the time but I’m pretty sure that sometime between Monday and Wednesday, when the stock was still testing $24.80 from the wrong side, I made a couple of general calls to put covers on open positions. If you are not sure it applies to yours, you can always ask but don’t expect me to go through the list and specify all 200+ positions.

Compounded and paid in arrears? I’ve got a rear they can stick that deal in! You can buy the stock yourself for $13.65 and sell the Apr $12.50 for $2.62 for a net entry of $11.03 and a $1.47 gain as long as it closes above $12.50 (13.3% non-annualized). You and me should get in on this scam!

MTB falling fast, need to roll Nov $105 caller back to Jan $100s for $7.05 and sell the Nov $100s for $4.95 XXX in $25KP Sell first, roll later if you have the margin for it!

 

 


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