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Twitter Tuesday – Yesterday’s Tweet Was Good for $1,000 – More to Come!

I love Twitter.  

No wonder it's worth $9Bn (based on BLK's latest buy-in) – it's actually useful.  Yesterday, in Member Chat at 9:39 am, I hit the button early on a trade as oil tested our favorite shorting point ($96.50 on /CL Futures).  We also took advantage of the run-up at the open to pick up more USO Feb $35 puts at .65 for our $25,000 Portfolio.  Using our new Twitter feature, I also tweeted (is that the verb?) out the trade idea on our account so that people who follow us with mobile accounts wouldn't miss what we thought was an easy trade.  

We had no idea how easy it would be, however as oil promptly plunged $1, to $95.50, where I said to Members at 10:26:

"$95.50 is goaaaaaaaaaaaaaaaaaal on Oil Futures – Congrats to players on that one!

Not only was the Futures Trade Idea good for a very quick $1,000 PER CONTRACT, but our USO puts in our virtual $25,000 Portfolio made a very quick .20 at .85 and that was a 30% pop in an hour, returning $850 on a $650 investment in less than 60 minutes – and still in time to buy our Egg McMuffins for the day!  

USO puts are a nice no-margin way to play oil, if you can't trade the Futures but, at $10 per penny per contract – you've gotta love the action on those Futures.  Actually, they have lower entry and exit costs than options and it's easier to set tight stops (usually right on the line) and get out quickly when the trade turns against you and THAT is why we like the Futures.  This morning (8:20), we're toying with $96.50 on the oil futures again and we'll be looking to short them again if they cross below the line – maybe even another run at the USO shorts too (see Dave Fry chart for key line). 

USO WEEKLY We've also been having great fun with earnings plays and Friday we targeted NFLX, who had such a ridiculous jump on earnings that we HAD to short them and that play was simply the weekly (this Friday) $175/170 bear put spread at $3 and we did 5 of those in the both of our virtual $25,000 Portfolios and already that spread is up to $4 as NFLX falls to $162 for a quick $500 profit on that net $1,500 trade.  

Unless the market looks stronger than the flat to down we expect this week – we're probably going to stick that one out for another $500 gain on Friday and that means – if you enter now at net $2,000, there's still another 25% gain to be had in 3 days – but it does seem kind of lame if you missed the Member's entry, where we risked only $1,500 to make another $1,000 (66% in 7 days).

Yesterday, we set our sights on VMW and our trade idea for that one was only for our aggressive $25,000 Portfolio (we have two flavors) and that trade idea came at 1:21, when I said to our Members:

VMW/StJ – That one could be fun as it's not too likely they'll pop $100 but you get paid $3.20 for the short Feb $100 calls so we can sell 5 of those for $1,600 and buy 3 April $105s for $3.40 ($1,020) for a net $580 credit on the spread.  That's good for the $25KPA

VMW was much worse than expected, falling all the way to $80 (18%) in pre-market trading but that's great for us as we get to keep the net $580 credit plus what little can be salvaged from our 3 long calls (not much) and that's not bad for a trade they paid us to play…

Equity fund flowsAs you can see from the BAC chart on the left, the markets are clearly heading into overbought territory but, as I pointed out in Member Chat early this morning, it can remain so for quite some time.  My commentary on this chart was:  

Dow was under 10,000 that September and had jumped to 11,000 at the month's end and, if you reacted to that overbought line being hit, you would have missed the move to 12,391 in Feb and 12,876 in April and it wasn't until May, long after the equity flows had left the building, that the bottom finally fell out and we had a major pullback (1,000 points).  I prefer the oversold signal as a good indicator to begin buying but, then again, we give ourselves a 20% cushion so timing isn't all that critical – just knowing we're not likely to fall another 20% is good enough to establish longs.

EEM WEEKLYThere's a difference between being overbought in a bubble market, where the MSM is cheerleading every move higher and the Fund Analysts are tripping over themselves to boost price targets on their favorite momentum stocks – and what we have now – which is more of a stock picker's rally.  We are fundamental stock-pickers at PSW and there's nothing that makes us happier than a return to good old-fashioned Fundamentals and that's what we're beginning to see according to a SocGen study, which notes a 31% decline in Global Indexes since June.  After year's of ridiculously tight correlation, this is a great indication that value is starting to matter.  

Equities are responding to earnings and merger speculation again after being pushed up and down by events from the credit freeze to Europe’s debt crisis to the stalemate in U.S. budget negotiations. Diminishing correlation was a buy signal in 1998 and 2003 (SPX) and has coincided this year with the biggest January rally for the Standard & Poor’s 500 Index since 1997, according to data compiled by Bloomberg.

If you are a good stock-picker or an event-driven picker, your added value is rewarded as opposed to all stocks going up or down the same way,” said Jose Gonzalez-Heres, who helps oversee $15 billion as a manager in the hedge-fund team for Morgan Stanley Alternative Investment Partners. “This is the first time we see a persistent trend of declining correlation.”

[Chart]We have 25 S&P 500 companies reporting today and the Fed weighs in with a statement tomorrow afternoon and we also have our first look at Q4 GDP tomorrow morning, which has very low expectations of 1% or less while we're really not getting the kind of earnings that would indicate that much of a drop so far – so a possible upside surprise in the morning could give us highs for the week – stay tuned.  

There is a data avalanche into the end of the week, highlighted by jobs reports but US and Global PMI Reports start coming in on Thursday and the US throws in ISM for good measure on Thursday and Friday will be auto sales.  

Oil, unfortunately, did not stay below $96.50 this morning (now $9:23) and we will be adding to our USO puts (probably with a roll to March) but the Dollar is falling (79.75 at the moment) so no Futures plays until we see where it end but, as usual, it's a silly pump up in oil and we'll certainly be looking to short the Futures on the crosses back below the .50 lines.  Follow the tweets and maybe we'll find another good entry today.  


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  1. phil

    Good morning!

    Oil holding above that $95.50 line so far but Dollar keeps knocking on 80 – watch the Dollar for a good signal on oil. 

    Interesting if true:

     

    Musk, who is also the CEO of space transport company SpaceX, told Reuters in an email late on Monday that SpaceX battery packs could be helpful for Boeing.

    "We fly high capacity lithium ion battery packs in our rockets and spacecraft, which are subject to much higher loads than commercial aircraft and have to function all the way from sea level air pressure to vacuum. We have never had a fire in any production battery pack at either Tesla or SpaceX," Musk said in the email.

  2. terrapin22

    yodi – what's your question?  

  3. newt

    Fiscal Spending: Does anyone know what the dollar amount is on a monthly or annual number that we spend on?  Someone tried to say it was $100 billion… a month.

  4. Burrben

    OIl
    It's at 96.65 now, and I'm thinking of going short here.  I'm wondering if the "rule" is though to wait until it gets below 96.50 to do the short as that would signal a break down.  
    I read the comment on the dollar, but how do we use that as a leading indicator?  If the dollar is up, oil will break down?

  5. stjeanluc

    Here is an update of Peter's Strangles virtual portfolio. This is based on the prices at the close yesterday:

    Some of the longs are up big time… I wonder if it would make sense to capture some of these profits!

  6. Pharmboy

    PP for today:

  7. yodi

    terrapin22
    Hi I see a lot of $$$ numbers possible I am a slow thinker But my question is what does it actually cost to be in Atlantic City for the three days? This is excluding Flight costs. Are non trading wifes cost the same or have you reserved girls? I am interested but need clarity. Thanks

  8. samz3700

    Burbben -
    The "rule" is not until ti breaks below the line – i think – Dollar is something to keep an eye on

  9. samz3700

    AAPL up $5 pre-market -
    Having a hard time this is based on them announcing a 128 Gig I pad – it's only selling for $100 or so more than the 64 gig. 

  10. 1020

    Good Morning!

  11. stjeanluc

    Oil Lines

    R3 – 98.53
    R2 – 97.67
    R1 – 97.19
    PP – 96.33
    S1 – 95.85
    S2 – 95
    S3 – 94.51

    Yesterday's high and low – 96.81 / 95.47

  12. 1020

    Hey Phil!  Nice Twitter pic, though you may want to loosen your tie a bit….. ;)

  13. wombat

    morning everybody
    where are the go-go girls ?

  14. jasu1

    wow…./cl at 97.2?

  15. sgh225

    Are we in buying USO Feb 35 puts at .53?

  16. stjeanluc

    FAS takes a breather!

  17. Pharmboy

     The French Labour Minister, Monsieur Michel Sapin stated that France was “totally bankrupt”. Well Mr Sapin is clearly right – the country is, but to say it in public. Oh la la. Capital outflows are surging, with no sign of a slowdown. I don’t hold much hope for Mr Sapin’s future political career, but his comments are, of course, totally accurate. The French Finance Minister deemed the comments “inappropriate”, and denied the statement, stating that the country was “solvent”, “credible” and “starting to recover” – well, he has no choice, but to say that. Inspite of all of this, the Euro continues to strengthen !!!!. I have to say, I suspect that there is going to be a great opportunity to short the Euro coming up. I continue to believe that France, in particular, though also Spain, remain the major risks to the EZ – the other countries are manageable and Italy will bumble along.

  18. stjeanluc

  19. phil

    Good morning! 

    Oil jammed up to $97.32 but pre-market moves are BS so we'll see if $97.50 or $97 cracks first.  Very tempting to play the .25 line here but greedy as we don't know why they moved up yet.  As long as I don't see news (and we do see a Dollar dive) then we assume it's a spike up for no reason and that makes short-term short positions appealing.  

    So our $25KP position of 10 USO Feb $35 puts are now .53 but, at $35.18, it's a better use of .55 for us to roll up $1 (buying $1 in strike for .55) than to DD here, with a .23 delta (so we only make .23 on a $1 move back down).  BUT, since there are only 17 days to expiration and inventories could go against us tomorrow and kill the position – the sensible move is to spend .65 to roll to the March $35.50 puts (now $1.18) and those have a .53 delta so we double our downside gain potential and, if oil goes higher, then we have time to DD and wait for it to calm down.  So that's the official move in the $25KPs.  

    Dollar 79.66 – should hold around here.  Oil $97.21, Gold $1,665.

  20. lionel

    Pharm/ Mr Sapin deserves the Legion d'honneur!

  21. terrapin22

    Yodi – The costs were laid out in my original post.  $400 to attend the conference.  Hotel room for Sat is $279 and Sun is $65.   I can hold these rooms prob until end of Feb. so best to book sooner rather than later.  Breakfast spread and lunch included during the conference on Sunday and Monday.   If your wife is not attending the conference then she does not have to pay the fee.   Spouses are of course welcome at the Sat. dinner.  Sat and Sun dinners are not included.  I have not reserved girls lol.  Parking fee is $5 per night.  

  22. stjeanluc

  23. harip

    Phil,
    Do you think vmw is a buy at these levels?

  24. phil

    Tempting to take $4.50 and run on the NFLX spread but they're below $160 now and I just don't see them worth $170 – bottom line.  

    VMW ($25KPA) April $105s dead at .15, no point in selling them – maybe a miracle?  Feb $100s at .05 may as well close in $25KP as it's not worth the margin to keep them open but could save $15 by just closing the two uncovered ones since we're not going to kill the Aprils anyway.  

    Spending/Newt – Yes, we are running a roughly $1Tn deficit so around $100Bn a month and that's about what we need to borrow every month, just to keep the lights on.  So, not expanding the debt ceiling means we would have to cut $100Bn a month in spending – about 6% of our economy but then the economy would slow down and collections would decrease and then we'd have a bigger deficit and need to cut more.  That's how stupid austerity is.  

    Oil/Burr – I got the oil news.  Nebraska approved the Keystone pipeline that will take 3-4Mb per week out of Cushing and create false shortages forevermore (if Obama approves it and the GOP pressure is ENORMOUS here because it's great for all their sponsors) and that's why oil popped but still a long way to go and we just crossed $97 so game on for the shorts on /CL).  

  25. stjeanluc

  26. stjeanluc

    NFLX stopped out at $7 this morning. AMZN reports tonight – they move about 10% on average.

  27. stjeanluc

    Income Portfolio news:

    F - Beats by $0.06 with stronger than expected revenues. Down 4%.
    X - Reported narrower than expected loss on stronger revenues.Up 2%.

  28. stjeanluc

    Not sure about that 128 GB iPad for $100 more than the 64 GB version. If they had an SD card slot like some other tablets you could upgrade the current one to 128 GB for about $50. Good way to increase the margins I guess…

  29. hemas03

    Phil , Kathy Griffin calls a tweet a tw@t….

  30. newt

    Phil: Thanks

  31. sgh225

    What should we do with our short TSLA Mar34 calls?

  32. lionel

    Brent/WTI spread narrowed down to $13.5
    Dollar being smacked down
    Good short opportunity on WTI back to $93
    DDD/ up 4% back to $62

  33. yodi

    terrapin22
    Thank you please put me on your list. I only can not understand that the hotel cost 1 night 279 and the next night 65 Thinking that you would supply the girls on Saturday and on Sonday they have to go to church or why is there such a great difference?

  34. sgh225

    Phil,
    What should we do with our short TSLA Mar34 calls?

  35. yodi

    sgh225 TSLA I show the Mar 35c not 34 they have still 1.30 or .88 premium sit back and smell the roses look at it during March again you got 45 days to experation many things can happen.

  36. Burrben

    AC
    If anyone is going to AC and DOESN'T try to use PCLN to get a better Sat night rate, I'd like to try and sell you the golden gate bridge.
    (I can't go, but just sayin)

  37. phil

    Rule/Burr – The rule is to pick a line of significant resistance, usually a .50 or .00 line with oil, and set very tight stops on the "wrong" side of your trade.  Sometimes we'll lose .05 4 or 5 times before we get a good run (or give up) like now we had a bad entry as we crossed right back over.  Still, now we learned more about resistance and we can risk another nickel at the .25 line this time, as we would have made .25 had we been braver before.  If the Dollar can't hold 79.66 – it's a no play, as that's a big factor too.  

    VLO had blowout earnings and that's being taken bullish for oil too.   Euro just topped out a bit under $1.35 – if they pull back and the dollar goes up – good for the oil shorts.  Yen 90.63, failed at 91 last night.  Nikkei back to 10,900 after yesterday's little pullback and I guess they'll try for 11,000 again.  Once Nikkei and Dow used to be almost point for point at the same levels so Nikkei has a long, long way to go if they are going to catch up. 

    Strangles/Peter – Congrats on navigating a difficult market very nicely.  

    AAPL/Samz – 128 Gig solves my problem – that I couldn't hold all my ITunes on my IPad.  I remember once selling a 300 Meg hard drive to a doctor for $25,000 in a Compaq server – must have been around 1987.  Now it's 128,000 Meg with the computer and monitor for $799 and God knows what you would have paid for a portable WAN in 1987.   And people say AAPL products are expensive???

    Twitter Pic/1020 – I love that one.  He's the gay muppet from Avenue Q.  

    Go-go girls/Wombat – Try this.  

    USO/Sgh – Right idea to take action but note logic on earlier comment (also, follow- through on strategy I outlined yesterday).  If you don't KNOW you're likely to get a quick move back – it's just too dangerous to stick with a 2-week position that's now out of the money (so we'd be the suckers paying premium).  

    Dollar spiked to 79.61 but back to 79.66 quickly.  Oil right on our $97 line.  Need something to break, one way or another

    FAS Money – My that as FASt!  

    France/Pharm – I was very discouraged by StJ's field report a couple of weeks ago.  

    $25KPM – AMZN big mover tonight.  I think they miss but too dangerous to play.  I wish we had a reason to sell more QQQ calls but AAPL may come back and crush us.   IBM $204 is fine, CRUS all good, AAPL looks dead but too expensive to roll and still a bit of hope.  Right now, roll to next week $475s is $1.40 and I think that's worth a toss so we wait a day and keep that plan in mind.  NFLX, as I said above, may as well ride out to collect the full $5. 

    $25KPA – Much easier to ride out short-term calls when they are paid for by short puts but same deal as above.  Others same as above, SHLD on target, SQQQ working surprisingly well, GOOG on track and we'll have to roll caller again most likely, IBM better with the put sale, FFIV tracking well, VMW we're killing the short callers (.03) and just leaving the long calls for the hell of it (maybe someone buys them). 

    AAPL Money – A little better today.  Might be done with SQQQ soon.  

    VMW/Harip – Well, I didn't like them at $100 but this does seem like a bit of an over-reaction at $80.  Earnings were a beat but guidance was gloomy but still .74, which is better than last year, when they were $75-$100 so I think you can take advantage by selling some April $77.50 puts for $3.80 but plan on rolling (Jan $70 puts are $6.20, Jan $60 puts are $3.20) and doubling down as it's a bit of a falling knife here – technically.  

    F/StJ – Also crappy guidance.  

    Griffin/Hemas – Well, I think she can keep that one.  

    You're welcome Newt.  

    TSLA/Sgh – They'll be a roll but not a rush as they were a partial sale on a long-term play and the 200 dma is miles below at $31.  

    We haven't done SCO in a while but the Feb $36/37 bull call spread is too good to resist at .40 with a .60 upside (150% in 17 days) and SCO at $36.30.  So let's put $800 into 20 of those in both $25KPs as we can always roll out the calls and turn it into a longer-term spread.  

  38. yodi

    Burrben
    good point AC Sat night!!!!

  39. sgh225

    Yodi,
    Should I roll to the Mar 35c?

  40. phil

    If AAPL goes up $5 per day – how many days until you are rich?  

  41. lflantheman

    Virtual MoMo trade:   BIDU …..short…..BTO Feb 105 puts,  5 @  3.35.   Earnings Feb 4.  Stop 1.70

  42. terrapin22

    Yodi – Great.  Glad to have you on board.  Believe it or not Sat night is quite popular in AC in general and in particular that time of year.  Lots of conventions in town.  Caesar's and Bally's are nearly sold out that wkend for a labor union convention.  I just checked online.  A room at Caesars on Sat. April 27th is $473 and $119 on 28th.  We are getting a good rate at Harrah's.  Sundays are always one of the cheapest nights of the week.  Please forward your conference fee payment to my paypal when you get a chance.  james.e.bragg@gmail.com. Thanks.  

  43. yodi

    Phil NFLX you forgot my Feb 180/185 bull call !!!

  44. phil

    I still love yesterday's AAPL spreads (my aggressive one and Rev Todd's more conservative one) as no-margin plays but I also like buying the 2015 $530 calls for $42, which I know is paying a ton of premium but the $630 calls are $22 so you are risking about $20 on a $100 drop in AAPL and the $430 calls are $79, so you make $37 on a $100 move up, which means your risk is only a bit more than 1/2 the potential reward.  If you pair that with a goal of selling $2 of premium per month to get your $42 back, you can sell 1/2 the March $520s to start (now $2.20) and hopefully you have to roll them to something higher before you have to worry about selling another set.  Just another nice, low-margin way to play AAPL.  

    The best way to play this is to play with 2 as long as you can afford 4 if AAPL pops and puts your short caller in trouble.  And then you can do 1/2 sales and rolls etc properly.  If you don't have $16,000 plus some margin to play with – you shouldn't be playing AAPL in the first place and, if you have more – then you can probably afford one of our margin plays, that give you a better upside.  

    $97.25 again on oil.  Someone thinks they know something.  Dollar stuck at 79.666 – the mark of the Blankfein.  $97.32 was the last rejection so this is the play to get .25 back (or lose another dime).  

  45. terrapin22

    Burrben and Yodi – I just checked Priceline.  it's $190 per night for those two nights for our equivalent room in Waterfront Tower at Harrah's Resort.  So $380 total.  My rate beats that.  $344 total.  

  46. yodi

    AMZN here my play on that stk set up on the 23 of Jan13
    Buy Jan15 260p @ 43.98 now 44.60
    sell Jan15 220p @ 27.03 now 27.07
    sell Jan15 145p @ 8.35  now 7.80
    sell Feb13 260p @ 6.30 now 8.72
    As you can see the far out play is set so you can make your move on the short month plays. On the negative side if AMZN will drop by tomorrow 15$ I am still in range with my Feb put (254.00). As usual if we have a negative report we do have excitement but this will cool down and by experation the shock will be over and the Feb 13 put possible will be OTM again if it ever comes that far. Obviously your final alternative is still to roll the putter to the next profitable position. We will see after tonight. Not a play for every one but workable.
    I am showing this play only for others to see so if it is boring please send me a cow bell and I keep the plays for myself.

  47. phil

    NFLX/Yodi – No, I'm not going to track your trade ideas now.  No way to that!  That was a short bull spread though, right?  Obviously that worked out well too. 

    $97.50 is topped, now we have no idea what's up so we stay away (from Futures, not from USO, which is more forgiving).  If you are brave, we can still short a cross on /'CL below $97.50 but you have to be prepared to keep losing .05 and .10 on those stop outs in the hopes of making it back with a .25 to .50 move down.  Also, keep in mind that the act of us taking a contrary position may be causing a spike in manipulation.

    Good summary on manipulation strategies in Economatters – very much like what I demonstrated in Vegas the year before last:

    Large Fake Order Strategy

     
    Here is a technique that is used by large players to manipulate price in either direction, and it needs to be banned, it is outright cheating. So a trading Dom is an order entry price ladder which shows a collection of bids on one side, a typical default setting would be 10 levels deep. On the other side of the price ladder is 10 levels of asks, going from nearest to farthest away from the current, or last traded price in oil.
     
    For example, if oil is trading at $96.00, there will be asks going from 96.01, 96.02…96.10 and conversely there will be bids going from 95.99, 95.98…95.90. The cheating technique is as follows: Let`s say oil is trading at $96.00, and the bids and asks size on both sides of the ladder are relatively all the same size, let`s say 30 contracts. 
     
    Who are the Culprits?
     
    Well, large institutions, Hedge Funds anybody with a large capital base will all the sudden at strategic points when they want to move price in a certain direction, flash a 115 contract size order right beneath the current price in the direction they want to move price. Say 115 contracts now bid at the $95.98 price level. 
     
    Of course, these large flashing orders relative to other orders stand out, and that is the purpose, to stand out in the market! Which in and of itself would not be a problem if these were “legitimate” orders with the actual intent to buy 115 oil contracts at $95.98 per this example. However, even a casual observer can see that these are fake orders! 
     
    (continues on link)

    Also:

    A review by Oxford Institute for Energy Studies suggests OPEC has less power to maintain high oil prices than it does to prevent low oil prices. If OPEC really wants to defend its current price level – all indications are that it is happy with oil ~$110/bbl – then it likely will need to accept a large reduction in its market share, the report concludes.

    And then there's this:

     

    Two prominent conservative movement officials who hold leadership positions for several right-wing groups—Ron Robinson and James B. Taylor—run a political action committee that donated thousands of dollars to a white nationalist organization, according to public records. And for several years Taylor was vice president of another white nationalist organization.

    Robinson and Taylor are each board members of Young America’s Foundation(YAF), which cofounded the annual Conservative Political Action Conference andruns the conservative youth group Young Americans for Freedom(Read more…)(YAF owns and manages the Ronald Reagan Ranchtrains conservative journalists, and calls itself “the principle outreach organization of the Conservative Movement.”) And Robinson, YAF’s president, is on the board of two other conservative groups: Citizens United, which brought the landmark Supreme Court case of the same name, and the American Conservative Union, which operates CPAC.

  48. terrapin22

    Burrben – Sat. night alone rate on Priceline is $292 for our equivalent room or $272 for lowest quality room.  Our rate is $279.  

  49. stjeanluc

    Oil / Phil – I had 97.19 and 97.67 as S1 and S2 and these 2 lines seem to be working well.

  50. jabobeast

    FU terrapin!!!!
     
    Get off that site!! ;-)

  51. yodi

    An other long play I have set up on BRCM on the call side. Against my Jan15 combination I held back to sell the short month call Feb13 36c now running between .35 and .40 In this case it would not be wise to sell this call even it gives you more that a 1% return for 17 days. As we do not know the outcome of the reporting tonight. I hold this one over for tomorrow.

  52. phil

    AMZN/Yodi – Not very likely to go over $300 at these nose-bleed valuations.  Don't forget their customers now pay sales tax in many places and that may have a substantial impact on sales quicker than people think.  So it's the $260 putter I'm worried about but hopefully the 200 dma at $240 holds on a bad print and you can roll it along.  The April $230 puts are $4.40, so a candidate for a 2x roll well below the 200 dma.  

    I think I'd play AMZN by selling the March $285s for $8.55 to pay for the Jan $300/325 bull call spread ($7) for a net $1.55 credit and plenty of time to roll.  Still, AMZN just too crazy to play so easier to sleep not playing it at all. 

    Oil/StJ – This is a crazy run.  Still no specifics other then Keystone. 

  53. Savi

    Good Morning--I see the go go theme is still going strong—--really Phil that's the best go go boys you can come up with—-ignore that as I think you may come up with something toooooo good
    Hey AAPL up—--keep up the go go theme—I think there maybe a connection

  54. scottmi

    NFLX – yup, still no one really wants to buy it at this price.

  55. yodi

    Phil NFLX no you do not have to track them only you were nagative on the play. I just did not want to pay any cash for your bear put! I only show plays for others if they even interested I don.t know. I surely track my own plays. you lose some you win some important you have more winner than losers.

  56. Savi

    yodi—I like your plays--keep posting them --I have the VALE play on atm—thanks

  57. yodi

    Phil AMZN yes I agree it is a crazy stk but my Jan15 put play always will be positive to a certain extend More positive if they go down. So this Jan15 combination will give me the oppertunity to always sell monthly puts against it without paying any extra margin. The putters aways pay well with them.

  58. yodi

    Well if AAPL now goes up by 10$ a day I have to worry about my short callers on the end of Feb.13 not 14

  59. wombat

    Guys
    Am I correct in thinking that when you SELL puts, the best case is price goes to 0 ( hence, i t would never go over 100% return – you only get the premium paid )
    Example
    I'm holding March BBY sold puts that went from $0.48 down to $.05 ( 90% return )
    Why tie up my margin until March for $0.05 ?

  60. ariveraA

    Phil – Any thoughts on BTU?  up 7% today.

  61. rperi

    At what point do you suggest we look to double down on the March $35.50 USO puts?

  62. kustomz

    60 freakin points, can we stop the foreplay already… Maybe saving it for the weekend headlines.

  63. phil

    Great read if you haven't heard my many rants about this:  Who Owns The Federal Reserve?

     

    The War on Mali. What you Should Know: An Eldorado of Uranium, Gold, Petroleum, Strategic Minerals …

     

    At the open: Dow +0.01% to 13884. S&P -0.07% to 1499. Nasdaq -0.22% to 3147.

    Treasurys: 30-year +0.01%. 10-yr +0.04%. 5-yr +0.02%.

    Commodities: Crude +0.76% to $97.17. Gold +0.5% to $1663.35.

    Currencies: Euro +0.1% vs. dollar. Yen -0.16%. Pound -0.26%.

    10:00 AM On the hour: Dow +0.19%. 10-yr +0.06%. Euro +0.20%vs. dollar. Crude +0.76% to $97.17. Gold +0.57% to $1664.45.

    11:00 AM On the hour: Dow +0.26%. 10-yr +0.06%. Euro +0.17%vs. dollar. Crude +1.2% to $97.6. Gold +0.51% to $1663.45.

    Market preview: Stock futures remain lower even after Case-Shiller data shows a continuing recovery in the housing market, as investors are cautious at the start of the FOMC meetingYahoo+2.8% after a strong Q4, and pharma heavyweights Eli Lilly and Pfizer beat their numbers, but Ford -1.6% after forecasting a wider loss in Europe. Still ahead: consumer confidence. 

    Nov. S&P Case-Shiller Home Price Index: +0.6% M/Mvs. +0.7% expected, +0.7% prior (revised).  More on Case-Shiller: Prices up 5.5% Y/Y for the 20-city composite, with 19 of 20 cities seeing increases (NYC fell). The areas which bore the biggest brunt of the bust – the southeast and southwest – are leading the comeback, with California also doing well. The northeast and industrial midwest continue to lag. Prices have returned to fall 2003 levels and are about 30% below the summer 2006 peaks. (full report) 

    Jan. Consumer Confidence58.6 vs. 65.1 expected, 66.7 in Dec. (revised).

    More on Consumer Confidence: Expectations 59.5 vs. 68.1 (revised). Present situation 57.3. The sharp decline in index erased all of its gains since 2012. The increase in the payroll tax has dampened sentiment and it is expected to take some time to rebound. Consumer appraisal, optimism, and outlook deteriorated in Jan. No rocket science here: Nothing drops to the bottom line of consumer confidence numbers like smaller paychecks, and that's what Americans are seeing in 2013 thanks to higher payroll and income taxesToday's 58.6 read missed expectations by a mile and the outlook for employment fell as well, with those anticipating more jobs declining to 14.3% from 17.9%. The XLY slides 0.8%, the XRT -0.7%.

    Jan. State Street Investor Confidence Index86.8 vs. 81.4 (revised) in Dec.  More on State Street Investor ConfidenceThe jump in investor confidence was led by North American institutions which helped offset a slip in sentiment from European institutions. According to State Street, the underlying data suggests consistent recent buying trends of equities in the US, Japan, Europe (excluding the UK), and emerging markets.

    Redbook Chain Store Sales: +1.6% Y/Y vs. +1.8% last week. The 1.6% is the slowest growth rate since mid-Nov. The cold weather helped boost winter goods sales but traffic was also affected.

    ICSC Retail Store Sales: -1.0% W/W, vs. -1.5% last week.+2.0% Y/Y vs. +3.5% last week. Higher payroll taxes, post-holiday and cold temperature negatively impacted store sales.

    Warren's getting ready to buy:  Berkshire Hathaway (BRK.B) is set to raise capital, filing a shelf offering to issue an as-of-yet undisclosed amount of senior unsecured debt. The company plans to undertake the issuance on February 1. The plans for the proceeds are up for speculation.

    Scholar At Conservative Think Tank Basically Just Told Other Conservatives To Shut Up About The National Debt

    China Averts $482 Billion in Local Bank Defaults via Massive Rollover Scheme

    The latest gaming revenue figures from Macau seem to indicate that the feared ban on smoking hasn't had a dramatic effecton traffic. The new smoking rules for casinos in the region limit smoking areas to up to 50% of the gaming floor area. If the trend holds, and Chinese New Year traffic is strong, Macau casino companies (MPELLVSMGMWYNN) could be set up for a strong quarter.

    More from Valero's (VLOQ4 results: Operating income was $1.6B vs. $167M a year ago due to higher refining throughput margins plus lower refining operating expenses. Replaced all imported light sweet crude used at its Gulf Coast and Memphis refineries with cheaper North American crude. Idled three of its 10 ethanol production facilities due to high corn prices and high ethanol inventories. VLO+7.7% premarket.

    Encana (ECA +1%) may be a takeover target after thedeparture of its CEO, Bloomberg speculates, after a bet on natural gas wiped out more than a third of the Canadian explorer’s value. Even as gas prices remain depressed, ECA’s gas-rich formations in Canada and the U.S. may appeal to companies looking to export the fuel to Asia. 

    You can see why these guys are my favorite:  It was "a messy release" for Peabody Energy (BTU+6.3%), which swung to a sizable Q4 loss as it posted significant charges related to write-downs and mine-closure costs, while revenue also dropped. But operations in the western U.S. surprised to the upside and Australian volumes were much higher than expected, while costs were lower than expected.

    Sears Holdings (SHLDexpands its relationship wtih ECOtality and unveils new electric vehicle charging stations in Tennessee and Arizona. Customers at participating stores will be able charge an electric vehicle battery up to 80% capacity in less than 30 minutes.

    Heard on Ford's (F -3.8%) earnings call: 1) No particularly good news from Ford Europe with 2013 losses expected to mount to $2B. 2) Retail share of North American retail down 90 bps to 13.6% in Q4. 3) Structural costs may be higher in 2013 with unique one-time impacts, restructuring, and pension payments contributing. 4) Ford expects favorable pricing in all regions except for Europe. 5) U.S. industry-wide sales should be supported by a trend of drivers to replace older cars, an industry volume of 15M-16M is expected. Overall, 2013 global unit sales of 80M-85M is forecast. (webcast,slides .pdf) 

    A plan by Chipotle (CMG -0.9%) to move into becoming alifestyle brand smacks of desperation to some caustic retail analysts. Though the company wants to create brand loyalty through a line of items that will try to mimic the success of Harley-Davidson's foray into clothing, the question of whether or not sustainability hoodies is really a category that will pump up significant revenue is a pretty good one.

    Pfizer (PFE +2.8%) trades up today on a solid Q4 reportwhich benefited from a surge in profit from the sale of its nutrition unit, and largely offset a 7% decline in its Lipitor sales due to generic competition. In its call, the company pointed to other drugs coming to market that it hopes will offset Lipitor, including Xeljanz, a new treatment for rheumatoid arthritis that was approved by the FDA in November, and Eliquis, an anticlotting drug that was cleared in late December. FY13 forecast brackets Street estimates.

    More from Pfizer's (PFE +2.8%earnings call: CEO Ian Read says the drug maker is separated into two business models: one focused on patent-protected drugs and the other on off-patent drugs. Read calls them "innovative" and "value" businesses, each with separate management. He adds that the company has yet to determine whether shareholders are interested in investing in two distinct companies or not, which leaves the door open to further potential spinoffs.

    Eli Lilly (LLY +2%) moves up today after its Q4 beat across the board. Total revenue and net sales both declined Y/Y however, as Zyprexa's patent expiration weighed on results. Sales of the drug declined by 49%, but were offset somewhat by a surge in sales of Cymbalta, which jumped by jumped 20% to $1.42B and animal-health sales, which rose 18% to $554.1M. For FY13, Lilly expects to earn between $4.10 to $4.25 per share on sales of $22.6B to $23.4B. Street estimates are for $3.83 on revenue of $22.93B.

    Western Union (WU) says it will expand its direct-to-bank platform to include China within the next couple of months. In addition, the company has extended its global payments network to allow digital transactions to and from Canada. The company's broad goal is to tap into the large number of people who live abroad and send money back to their home nation. 

    Lexmark (LXK -7.8%) opens with a thud after badly missingQ4 EPS estimates. Also hurting is Q1 guidance for an 11%-13% revenue drop and EPS of $0.80-$0.90, largely below a consensus for an 11.3% drop and EPS of $1.01. Q4 gross margin was 34.1%, -160 bps Q/Q and -330 bps Y/Y. Hardware revenue -15% Y/Y, supplies -10%. Software sales +25%, but were only 9% of total. Shares hadrallied strongly since July, fueled by enthusiasm over Lexmark's restructuring efforts. Rivals are off: HPQ -1.8%XRX -1.5%. (PR) (slides)

    VMware (VMW -20.2%) has been hit by 7 downgrades in response to its poor Q1/2013 guidance. VMware's soft transactional (individual license) sales "will raise questions about the appetite for SMB customers to expand their virtualization footprint," says Goldman, which has removed shares from its Conviction Buy list. However, the firm has "yet to pick up on any material changes in thecompetitive landscape" in this segment. "We'd buy the shares after the smoke clears," 

  64. phil


    Netflix (
    NFLX -1.4%) trades lower after announcing it willfloat $400M in senior notes to help it pay off higher-paying debt and keep a little on the side. Though the consensus on the Street is that the company's well-telegraphed move will be used in part to help it fund the development of more original content, it has also given NFLX bears something solid to latch on to.

    Old favorite:  Nomura is encouraged by Frontier's (FTR) recent announcement it had repaid $502.7M worth of 6.25% senior notes. The repayment will reduce annual interest expense by $30M-$35M, analyst Mike McCormack estimates, something that will support the rural telco's dividend (current yield of 8.85%). McCormack believes Frontier's dividend will amount to 67% of 2013 free cash flow, compared with 92% for peers Centrylink (CTL) and Windstream (WIN). Frontier, which reports on Feb. 21, had over $8.8B in debt as of Sep. 29. 

    More on Corning: Q4 LCD glass volumes were up in the high-single digits Q/Q, above raised guidance; sales were up 3% Y/Y. Price declines were higher than for Q3 (as expected), but are expected to moderate. Specialty Materials (SM) sales+10% Q/Q and+68% Y/Y thanks to Gorilla Glass demand. Telecom sales10% Y/Y, Environmental-6%, Life Sciences +29%. Q1 LCD glass volumes expected to be up Y/Y, but down in the mid-single digits Q/Q. Telecom expected to be up Y/Y in Q1, SM expected to fall Q/Q, but double-digit growth seen for 2013. GLW +1.4%. (PR)

    Yahoo (YHOO -2.4%) has given up the initial gains it saw following its Q4 EPS beat (fueled by $1.5B worth of buybacks), which was accompanied by somewhat light top-line guidance. Marissa Mayer's earnings call remarks about improving Yahoo's UI, revamping search (previous), and improving the company's reach were generallywell-received. But she also admitted big investments will be needed to turn the company around, and that the mobile shift is having some effect on display ad sales.

    YouTube (GOOG) is planning to roll out paid subscriptions for individual channels, AdAge reports. The first channels, which could arrive by Q2, will reportedly cost $1-$5/month and feature a 45-55 revenue split; YouTube might also charge for content libraries and live events. The online video giant, which has invested plenty in professional content, has already hinted a subscription service could arrive. One unanswered question is how much TV channel and studio owners terrified of upsetting the pay-TV industry will play ball.

    CNBC now polling college kids to see if AAPL phones are still "cool".  I don't know what they were trying to prove but clearly the majority of kids have IPhones and like them.  I guess they are too cheap to just buy the recent ChangeWave survey:  

  65. yodi

    wombat
     
    BBY close it TOS does not charge any commission at .05 and below. Yes you get only what you received at the sale.

  66. wombat

    ha – and yet another reason to go over to TOS.
    They are actually offering me a year of free trades and 10K to come over.
    Now if I could just get the time to learn the damn platform ; >

  67. lflantheman

    Virtual MoMo trade:   BTO 2  AMZN Feb 16 265 puts for 10.75.   This is now a long strangle on AMZN earnigs, expecting a large move one way or the other. 

  68. lflantheman

    I'm off board till EOD.  Thanks.  Good luck! 

  69. Pharmboy

    INO – buying 1/4 position. VERY SPECULATIVE.

  70. rexx

    JCP ?

  71. phil

    OK Savi – Go go AAPL!  Of course, that song is way better in original Japanese.  

    BBY/Wombat – Exactly right, you reach the point of diminishing returns.  

    BTU/Arivera – I always like them.  My comment to Wombat last week was:

     

    Coal/Wombat – Note JRCC from earlier today.  Other than that, it's BTU, BTU, BTU and, when in doubt, BTU.  It's at $26.26 now so you missed $20 when we were buying coal stocks last summer but you can still sell the 2015 $23 puts for $4.40 and use that to buy the $20/30 bull call spread at $4.70 for net .30 on the $10 spread that's $6.26 in the money to start and your net, if put to you is $23.30, which is still an 11% discount to the current price (this is an aggressive spread) while you get 3,233% of your cash back at $30 and your break-even is way down at $21.65 (17% off) due to owning the $20 calls.  

    Why mess around with junior coals when BTU is so cheap?  

    2015 $23 puts are still $4.20 so trade is near the same as it was last week as BTU took a dip in between (and gave great entries).  I like them more now, after earnings confirmed my outlook for them, than I did last week.  

    USO/$25KP, Rperi – I don't know when but certainly not the same day we roll to it!  The March $35.50 puts are now $1.12, so not a big move for the day and maybe oil is determined to test $100, that would be about $36.50 on USO (up $1) and THEN we'd want to roll up $1 for .50 or less and maybe even DD on the $36.50s (now $1.70) for maybe $1.15 and we'd be net .90 + .65 for roll to March + .50 for the roll up to the $36.50 puts for $2.05 + $1.15 for the DD puts us in 20 of the March $36.50 puts at $1.60 and we'd be down .55 (34%) so, I can certainly accept that, which means there's no need to worry this early on.  

    Dow is very impressive today – just grinding up and up.  IBM not even green and XOM barely so. CAT is contributing 8 points and PFE is almost there too and PG is good for 10 with CVX and JNJ adding another 15 between them and there's your Dow gains today (with the rest mixed).  AA testing $9, BA will pop when/if they fix their batteries.  

    TOS/Wombat – Open a paper money account and practice.  Bet you get it in very short order.  "Learning" is only a problem on crappy platforms – this one will really blow your mind. 

    Later Lflan. 

    Oil $97.38.  Now, if you entered at $97.50 and had .10 worth of previous losses from stopping out – shame on you if you don't set a tight stop at $97.40 to get your .10 back ($100 per contract).  You can always go back in on the next cross or maybe we keep going down and you can move your stops even lower but you don't want to look for big wins in the futures just because you lose previously.  It's a nickels and dimes game and it's only luck when we get a big move like yesterday that doesn't trigger a stop.  The trick is to make sure you can stay fairly even and keep playing and then, once in a while, we are rewarded with those big moves.  

  72. wombat

    Yodi // BBY
    I sold $9's – Is this something that you would roll forward and up ? There is a buyout deadline Feb28 which should be above $15 - 
    Even if the deal were to fall apart I highly doubt it would fall below$12

  73. Burrben

    Wombat – TOS is offering you a $10,000 bonus to come over?  Did I read that right?
    Are you bringing mucho (5MM+) over?

  74. wombat

    Burrben
    Ask them – see what they'll give you.
    They're very aggressive about new business – particularly active traders.

  75. jromeha

    Anyone know What the call strike was for Iflan's AMZN strangle? 

  76. jromeha

    Lol, never,ind, I'm tired. 

  77. 1020

    Phil – The War on Mali. What you Should Know: An Eldorado of Uranium, Gold, Petroleum, Strategic Minerals …
     
    Gee, Why am I shocked. I thought it was all about removing the scourge of terrorism….. :(

  78. ariveraA

    Phil \ BTU.  Thanks.  Doubled down (stock) 3 times and near break even now…  I always wonder if I should let it ride or quit when even.  The selling of puts has made this a clear winner so maybe just greed to stay in?

  79. jelutuck

    Wombat, who are you talking to at TOS?

  80. wombat

    A regional guy named brandon West Coast // He's from TDA
    does that help ?
    I'l ask him next time I talk to him == I think it all depends on the cap amount your bringing over ( for example, I'm bringing over 9 accounts as I manage a lot of my brothers and parents, and the total amount )

  81. wombat

    my email is jjresponder@me.com if you want to take this 'off-list"

  82. phil

    See, oil back to $96.50 and we can short it again.  Better than blowing the .10 gain.  

    JCP/Rexx –  I don't think it's THAT exciting, but:

    J.C. Penney's (JCP +6.3%) move to add manufacturers suggested retail prices alongside its own sale prices could help boost sales, according to analysts. Though it seems like a bit like a lesson from Retail 101, for close to a year the visibility for consumers on where JCP's prices stood in relation to rivals was as thick as London fog.

    CNBC can't keep their story straight.  First they show figures that say 46% have IPhones, then they say MOST of the students have IPhones.  If they are going to do their own unscientific studies – at least they should keep their made-up facts straight.  

    12:00 PM On the hour: Dow +0.4%. 10-yr +0.02%. Euro +0.22% vs. dollar. Crude +1.33% to $97.72. Gold +0.51% to $1663.45.

    1:00 PM On the hour: Dow +0.45%. 10-yr -0.02%. Euro +0.19% vs. dollar. Crude +0.97% to $97.38. Gold +0.49% to $1663.05.

    Expensive college + no job waiting = no payment.  You don't need Harvard to make this connection:  Delinquency rates on student loans made in the last 2 years have reached the "unsustainable" level of 15%, says FICO. In the 2005-2007 period it was 12.4%, but average student loan debt now is nearly 60% higher (at $27K) and the job market far softer.

    UK Austerity policies are failing  (Tax Analysts Blog)

    Problem sovled? With strapped local governments lacking the means to make good on their massive borrowings, Chinese bank srolled over at least 75% of the maturing debt last year (interest only? option ARMs?). It begs a question: Who's rolling over the banks' borrowings? 

    Why doesn't Buffett (BRK.B) buy back more shares? Hecan do better elsewhere, writes The Brooklyn Investor, posting the "astonishing" record of book value/share growth in Wells Fargo (WFC) over the past decade. If a fund had this sort of record, investors would be begging to get in, but just because it's a TBTF bank, many refuse to invest.

    Floods are disrupting Australian mining operations, as resource-rich Queensland state faces its heaviest rains in two years. Xstrata (XSRAF.PKdeclares force majeure on several coal shipments that had been due, Anglo American (AAUKY.PK) says output from some of its operations was disrupted, and output at Peabody's (BTU) Middlemount mine likely will be affected for at least three weeks.

    Trina (TSL +2.6%) adds to its recent gains after announcing a deal to supply 30MW of modules for two South African solar projects; deliveries will be made in Q3. Shares are up 130%from their Nov. 20 close. (solar plant comments)

    Beazer Homes (BZH +4.9%) moves up today in spite of posting a mixed FQ1 report earlier, beating on its bottom line but coming up slightly short on revenue expectations. Net profit actually swung to a loss as the home builder's year-ago results were boosted by a larger income-tax benefit, though total revenue grew by 31% in the latest period on a 20% jump in closings. Orders also posted strong gains, climbing over 29% from the prior year. 

    Shares of Hovnanian Enterprises (HOV +3.5%) get a boost today from an upgrade to Neutral from Compass Point. The firm says HOV's risk profile has declined markedly over the past few quarters and there's room for sustainable profitability in 2014. It cautions, however, that the company will not achieve a positive book value until its DTA is reversed in perhaps 2015-2016, and its equity value remains dependent upon that metric improving. 

    General Motors' (GM -1.6%) European arm reports it received more than 20K orders for its "city car" Adam vehicle signaling strong demand for the concept car geared toward young urban drivers. Amid an overall decidedly sluggish auto market in Europe, small city cars are still drawing interest with Opel, Volkswagen, and Mercedes-Benz all players in the segment.

    Chicken wings in focus: Domino's (DPZ +0.6%) says it will sell 2.5M chicken wings on Super Bowl Sunday to go along with its expected tally of 11M pizza slices. A developing trend in the restaurant industry is that pizza chains sell so many chicken wings during the Super Bowl that input prices rise during Q4 as companies stock up. Last summer's drought in the Midwest is also a major factor that's putting pressure on chicken wing prices (chart). Are Buffalo Wild Wings' (BWLD -1.3%) hedges in place?

    OpenTable (OPEN +1.2%) is acquiring Foodspotting, developer of a popular app for finding and sharing restaurant dishes, for ~$10M in cash. Look for OpenTable, which already has a partnership with Foodspotting, to integrate the startup's photo and social-sharing features into its reservation apps. Q4 results are due on Feb 7

    RIM (RIMM -6.3%) is falling hard again ahead of tomorrow's BB10 event, where the Z10 and X10 are expected to be unveiled. Critical comments from UBS and CLSA could be playing a role – the former declares BB10 price points too high for emerging markets, and thinks iOS and Android have a stranglehold elsewhere. On the flip side, OTR Global thinks a Lenovo partnership could be announced soon; Lenovo recently declared comments about a possible RIM bid to be taken out of context. The WSJ has taken a look at the challenges RIM faces in winning back corporate clients. 

    Amazon, Apple, and the beauty of low margins (Remains of the Day):  Apple still is the margin king among those competitors in the mobile phone and tablet spaces in which they compete. But if they decided to start using their low-end priced SKU's in mobile phones and tablets to press down on Google and Amazon, and if their margins declined as a result, I, as a shareholder, wouldn't necessarily find that to be a negative. I would love to find the sales mix data on their different SKU's in the iPhone and iPad verticals, though I have yet to see that data shared publicly anywhere. The shape of that curve will tell us a lot about where those markets are in their lifecycle, but Apple has some control over their shape as well.  Some might say that Apple doesn't have the right mindset to play low-margin offense, that it's against their nature. But they've effectively dominated and wrung every last drop of money from the iPod market using pieces of this strategy, and they have the operational expertise and vertical integration to achieve it. In fact, Apple now turns its inventory more times a year than Amazon, by a healthy margin, a staggering fact.

    The Apple paradox (Benedict Evans)

    Three lunchtime reads:

    1) Bernanke seen buying $1.14T in assets in 2014

    2) Chasing the yen to 100

    3) Taking advantage of cheap VIX

    We exaggerate the risks beyond our control, & underestimate the risks we can control” (NYT)

    Six ways our brains make bad financial decisions (The Globe and Mail)

  83. yodi

    sgh225
    TSLA sorry for the late reply trust you read Phil's post 34 or 35 it is to early to roll!

  84. yodi

    Womb BBY now you really writing short hand 9$ what?? I would not make to many moves with that stock if you have short puts sit tight. I would not sell calls at this stage. 9 does not say much???

  85. rexx

    At 21 JCP down 50% in 1 year as they are losing money.  Revenue hasn't dropped just their net, compounded by strange management,  If they get back to their margins from 2 and 3 yrs ago their PE is 5.  So some management actions are likely and needed and would payoff.  2015 13 Puts are $3 – net entry of $10 – certainly where it can be doubled or rolled in anticipation of further management action.

  86. wombat

    Yodi // BBY
    Sorry mate, not clear.
    I sold March puts at $9 ( the ones I mentioned before that were almost down to zero ) I am trying to learn when and how to roll positions like calls or puts. Since this is pure profit, does it make sense to roll it into another short put or just close it out and open another position ?
    Is that clearer ?

  87. Jordan

    Hi Phil, what is your thinking of verticals on AAPL that are closer than 1 year away?  Yesterday, you endorsed the idea of a Jan 2014 400/450 BCS, and I am thinking how much can you push this and still be comfortable with the underlying premise that $450 on AAPL is a price that we will no longer likely see in 2014.
     
    For example, what do you think about an April 2013 400/450 BCS?

  88. diamond

    jromeha – RE: lflantheman's call strike for AMZN strangle …
     
    It's in the MoMo portfolio:  BTO 2 AMZN Feb13 calls @ $11.85 on January 14th.

  89. rperi

    Phil/USO – Thanks.  I wasn't thinking today, I just like to know my plan the day I make the original trade and write it down in thinklog so I can go back and review once I am feeling any need for a move.

  90. scottmi

    KO – anyone know what gave them some fizz today?

  91. ariveraA

    JCP / rexx:   (FWIW)  I've been selling puts on JCP since they hit $16 and it's worked like a charm.  The stock is VERY volatile and rumor driven.  I wait for a -5% or more rumor days to sell puts. 
    Unlikely they go out of business but patience with CEO Ron Johnson is running thin so thick skin a must: :-)   Now, if he could actually prove  (a big if) that the store in store concept works, the stock will rocket….

  92. jromeha

    Gracias diamond.

  93. yodi

    womb BBY Mar13 9p you can and should close for .04 or you are looking for an other donut to buy at AC
    The stock is a gamble I do hold a range of puts from 15 down to 12. But I received a lot of premium. To start now I could not recomment to deal with it.

  94. phil

    Mali/1020 – Just wanted people to know why suddenly we're supposed to care about Mali, as they are currently getting the full Fox treatment as we bang the war drums.  This one cracks me up – as Fox was previously saying people shouldn't get worked up when someone burned the Koran in Florida and we shouldn't allow mosques in NYC but now we must stop Al Queda from burning ancient manuscripts (remember those statues the Taliban knocked over that gave us an excuse to go to Afghanistan?):

     

    Monday after Al Qaeda-linked militants fled into the desert having set ablaze a library that held thousands of ancient manuscripts ablaze.

     

    News of their arrival came just hours after Timbuktu's mayor confirmed that the fleeing Islamists had in earlier days torched ancient manuscripts in Timbuktu, long revered as a center of Islamic learning.

    ROFL!   Fox news has "long revered" Timbuktu as a center of Islamic learning.  OMFG! 

    As soon as all the corrections which happened to be necessary in any particular number of The Times had been assembled and collated, that number would be reprinted, the original copy destroyed, and the corrected copy placed on the files in its stead. This process of continuous alteration was applied not only to newspapers, but to books, periodicals, pamphlets, posters, leaflets, films, sound-tracks, cartoons, photographs – to every kind of literature or documentation which might conceivably hold any political or ideological significance. Day by day and almost minute by minute the past was brought up to date. In this way every prediction made by the Party could be shown by documentary evidence to have been correct, nor was any item of news, or any expression of opinion, which conflicted with the needs of the moment, ever allowed to remain on record. All history was a palimpsest, scraped clean and reinscribed exactly as often as was necessary. In no case would it have been possible, once the deed was done, to prove that any falsification had taken place. - Orwell, 1984

    BTU/Arivera – Keep in mind that if you DD'd into a large position, getting to even is an excellent time to scale back down or, at least, place a conservative cover on part of your position.  Let's say you have 3,000 shares of BTU even at $26.65 after starting with 1,000 at $30.  You could sell 15 2015 $25 calls for $6.50 and put a stop on 1,500 shares at $24.90 so, if you stop out at $24.90, you still have 1,500 shares with a break-even at $21.90 and you are cashed out even on 1,500.  If BTU keeps going up, then you can roll your calls to 2x maybe the 2016 $35s (the roll from the 2014 $25s at $4.90 to the 2015 $35s at $2.90) means that's a very realistic expectation.  So you are protecting yourself quite nicely and not really crimping your upside by much.  You could also sell 15 of the 2015 $18 puts at $2.25 for a net $15.50 re-entry since you know you'll be cashing out 1,500 at $24.90 so the net of the remaining 1,500 in a buy/write would be $19.65/18.83.  

    Good negotiating Wombat! 

    Finally got our .25 run on oil.  Once again – not worth the risk into the overnights on the Futures (/CL).  

    BBY/Wombat – Don't forget they have a binary event coming up at the end of Feb.  If they don't get bought, they are likely to retest $11 very fast.  The problem with playing short-dated contracts is simply that you have less protection.  We are short the 2015 $13 puts at $4 for a net $9 entry in the Income Portfolio and they are down to $2.10 and I'm tempted to pull the plug on those if BBY fails to clear the 200 dma at $16.50 soon.  I think at this level, if you must play them fresh – I'd go with the 2015 $17/20 bull call spread ahead of the announcement at $1 and, if they disappoint, THEN you can look at selling a long put for $2 or more (currently the $10 puts are $1.20, so net $8 or less on a pullback) and that would cover your $1 spread and give you a cheap entry.  If BBY goes up from here – then the spreads a triple and no worries.  

    AAPL/Jordan – I don't see any particular catalyst to take them up in the next 6 months other than a realization of their value over the next couple of earnings reports.  I agree with the premise but the market had a great run and AAPL sure isn't going to go against a 20-40% (of the 300-point rally) pullback in the Nas back to 3,050 or 3,000 and 3,000 would be down 150 which is 4.7% so 5% pullback of AAPL is back to $432 and 10% is back at $400 so that can happen easily but is not that likely but, if you only give yourself 3 months to be right, any "accident" over the next 90 days will cost you money that won't recover.  So I don't like the trade, especially for $35 when RevTodd's 2015 $400/450 bull call spread from yesterday is just $25.  I know it's more exciting to make money quicker but you are just playing Russian Roulette each time you make those short-term plays and it's fun when you're right but sucks when you lose.  Remember how fast those April calls we sold got wiped out?  From $16 to $2 in a day – your protection is an illusion in April.

    Thinking/Rperi – Once you get to 10,000 hours, it all becomes second nature.  

    KO/Scott – Undervalued so don't need much excuse.  TheStreet reiterated a buy and the Super Bowl ads are getting a lot of press – that's often good for a point ahead of the game.  In calmer markets, we used to get excited about things like that, which could lead to a 1% move in a day.   Imagine that – a big stock like KO moving 1% in a day!  Something like that used to be the topic of conversation for a week when it happened….

    JCP/Arivera – I agree, people are too impatient with retailers that try to fix their models (which is necessary in normal cycles).  

    Just 60M traded on the Dow.  Doesn't seem like enough fuel to take out 14,000, does it?  If they wait much longer, we'll run out of large-cap/component earnings to report and then what? 

  95. ariveraA

    Phil – Thanks for the BTU play.  Will look into it.

  96. yodi

    Here is an other one I am just closing
    May back/ratio  2/4 May13 17/23 c @ 1.00  -2  17p @ 1.25 you will go out with a slight credit

  97. yodi

    Sorry stock is YELP

  98. 1020

    Phil/fox  Yeah, you just wait for sean hannity and the fox gang talking up the "virtues of immigration"  :)
     
    If that won't make you head explode…….

  99. stjeanluc

    Earnings for tonight (average move / priced into options)

    AMZN - 10.1% / 9% (no whisper)
    BRCM - 6.6% / 6.5% (whisper is for a $0.03 beat)
     

  100. wombat

    StJ
    Were those plus or minus whispers ?

  101. phil

    Oil jacked up right to $97.50 again at the NYMEX close.  Damn that's a tempting short again. 

    Dollar way down at 79.60.  

    TLT $117.17, XLF $17.46, VIX 13.20 – no signs of nervousness yet.  

    You're welcome Arivera. 

    YELP/Yodi – See, not so easy to remember to put all that stuff in, is it?  8) 

    Immigration/1020 – Yeah, I saw that too.  They can't find any people in America to vote for them so they're going to import Conservatives from other countries.  

    Randall Enos - Cagle Cartoons - GOP 2016 - English - GOP, 2016 elections, republican presidential candidate for 2016,republican party

    Rob Tornoe - Media Matters - Palin Out At Fox News - English - Fox News, Sarah Palin, Glenn Beck, right-wing, media, GBTV, The Blaze, Alaska, snowmobile, Ayn Rand

    Milt Priggee - www.miltpriggee.com - GOP - English - gop, suicide, republicans, obama, John Boehner

    John Darkow - Columbia Daily Tribune, Missouri - GOP Reaches Out - English - GOP, Republican, Democrat, Vote, Tie, Dress, Disguise, Rebrand, Tolerant, Painter, Ladder, Redo, Politics, Government

  102. stjeanluc

    Earnings / Wombat – I post the average move and what you would get from a short straddle to give you an indication if the option pricing is fair or not. For example, a short straddle for AMZN prices a 9% move while the stock usually moves about 10% so it seems that options are somewhat cheap (although close to fairly priced). Then I add some information about the earnings if I have any. For example, on BRCM the whisper is for a $0.03 beat ($0.76 vs. $0.73). 

    Up to you (or Phil like yesterday for VMW) to setup a play then.

  103. albo

    Waiting for the DELL deal is like waiting for Godot.

  104. stjeanluc

    Might want to tread carefully….

    http://money.cnn.com/data/fear-and-greed/

    FGI 0113 Tuesday links:  the fading fear premium

  105. phil

    Warm weather in Chicago of all places.  Does not bode well for nat gas or heating oil. 

    Nice list of trading books as I think someone asked yesterday.  

    It's finally beginning, Mississippi is seceding from the Union – what Tea Party-controlled state will be next?

     

    Responding to President Obama’s plan to issue 23 executive orders on gun violence prevention, radical lawmakers in a number of states have re-upped their efforts to exempt their state from federal gun laws through the insidious and unconstitutional practice of nullification. Now, Tea Partiers in Mississippi want to institutionalize the nullification process, with a proposal to create a permanent committee devoted to nullifying all kinds of federal laws. The Dispatch reports:

    The committee, composed of 14 state elected officials, would determine what is and isn’t within the federal government’s power when dealing with the state’s constitutional rights. … The bill, which is listed with the state as an “active bill” and will be taken up by the Constitution Committee, provides measures to “prohibit the infringement of the Constitutionally protected rights of the State of Mississippi, or its people, by means of federal statute, mandate, executive order, judicial decision or other action deemed by the State to be unconstitutional.”

    “This was a bill that was requested for me to bring up,” Chism said. “It’s to solidify the 10th Amendment to the Constitution.”

    Chism said the bill was drafted in response to 23 executive orders issued by President Barack Obama on gun control and weeks before the state is scheduled to begin implementing a national health system commonly known as “Obamacare.”

    Having failed in their court challenges to the Affordable Care Act, state lawmakers started introducing nullification bills to purportedly eliminate that law.

    The problem with the practice of nullification, once used to defend Jim Crow segregation, is that it rejects both the constitutional tenets that validly enacted federal laws are supreme over state laws, and that it is judges, and not state legislators, who determine whether those laws are valid or not in our system of checks and balances. Right-wing lawmakers revived the discredited tactic as a last-ditch means of fighting federal legislation they could not defeat in court. But a law that authorizes state legislators to review all federal legislation as a matter of course would open the door to a much broader swath of radical and defiant action, which is why James Madison warned that nullification would “speedily put an end to the Union itself” because it would allow the states to simply ignore any law they want.

    I know I speak for all of us when I say we will miss Mississippi and all their….  uh….  can't really think of anything, can you?  

    Also worth noting

     

    Republicans like to portray President Obama as a big government spender, despite the fact that government spending under Obama has grown at its slowest pace since the Eisenhower administration. The GOP is also trying to pretend the spending cuts that Obama has signed into law over the last two years simply didn’t happen.

    In fact, under its current trajectory, non-defense discretionary spending — everything from education to food safety to transportation to housing to veterans’ benefits — will hit historic lows in the next decade, as Center for American Progress Director of Tax and Budget Policy Michael Linden showed in these charts:

     

     

     

     

     

     

    If the so-called “sequester” comes into force in March, which House Budget Committee Chairman Paul Ryan (R-WI) says it will, domestic spending will fall even more. “Instead of totaling 3.2 percent of GDP in 2017, nondefense discretionary spending would total less than 3 percent of GDP and would be on its way down to 2.6 percent by 2022. This is less than two-thirds of what was previously its lowest level,” Linden wrote.

    Wow, and Obama speaking on Bloomberg but not on CNBC….

  106. wombat

    Phil / BBY
    Binary event – thats why I was asking what you would do.
    Ya, I don't see it clearing the 200DMA, I'm out +4K, good run. I'll look at your BCS idea when I see what the stock does.
    Thanks again ( oh, ya and for the Android stripper finder. Was that an Apple whack ? ; > )

  107. wombat

    StJ / Averages
    Got it – thanks ===

  108. sgh225

    Phil,
    From you Mid-Day report:
    On your wave count for GLD, I believe the rule of Elliot Wave Theory is that wave 4 can not go into wave 1, which it clearly does between 162 and 164.
    Your thoughts?
    sgh225

  109. phil

    BRCM earnings play (with intent to own):  Sell 5 2015 $28 puts for $3.50 ($1,750) and buy 5 May $33/30 bear put spreads for $1 ($500) so you net a $1,250 credit for a net $25.50 entry and, if BRCM falls 10%, you also collect your $3 on the spreads and drop your long net to $22.50 (about 33% off) and, if BRCM goes up, you should be able to get 1/2 back and still drop the net to $25 but only AFTER you know BRCM went up on good earnings.   Too long-term for $25KP but I really like the trade if you are into BRCM, which is an excellent stock.  

    'DELL/Albo – At $22.5Bn in cap, no matter how badly someone wants them, it will take ages to put together.  If they buyer has $10Bn and they go for a 10% premium, you still need 3 banks to come up with a Buffett-sized $5Bn commitment each.

    ESTRAGON: I can't go on like this.

    VLADIMIR: That's what you think. 

    Stripper finder/Wombat – I don't know.  One of the Howard Stern guys keeps talking about it and that's the one I found on Google.  This is not an official endorsement of that particular app.  8) 

    GLD/Sgh – Wave count?  That's not me dude.  I'm not into Elliott waves – hasn't that theory been violated 8 or 9 Million times already?  

  110. phil

     

    Futures & Options Tax Considerations: Section 1256 Contracts

    By Lawrence G. McMillan

    Section 1256 trades include all futures trades, as well as futures options.  They also include option trades on cash-based indices ($OEX and $SPX, and especially $VIX), but not SPY or QQQ, for example, for the underlying there is an ETF, not cash.

    A Section 1256 trade is treated as 60% long-term and 40% short-term, no matter if the position was held for one minute or one year.  Also, each Section 1256 contract held at the end of the year should be marked to market at year-end, and the resulting gain or loss reported as a gain or loss for that year.  

    These should be itemized separately and reported on your Schedule D as one line in the short-term section and one line in the long-term section.  Hence, one needs to keep track of this unrealized portion from year to year, as it needs to be reversed out the next year.

    For subscribers of The Option Strategist Newsletter, some of last year’s most profitable trades fell into this category – notably the Heating Oil – Gasoline spread (which used futures) and the S&P futures put ratio spreads (which is another reason to favor the S&P put ratio spread over the SPY put ratio spreads).

    You should consult your tax advisor about this subject when preparing your year-end tax returns.

  111. hemas03

    Phil, probably a typo but I like the header:   Mississippi is succeeding from the Union ;  maybe they will succeed to secede….. 

  112. Pharmboy

    This grind higher reminds me so much of 2007…..and 2000, and….although, there was no 85B/mo buying by the feds…..

  113. Pharmboy

    Pump up the volume….dis dis…

  114. Pharmboy

    From Gann360…ugh!

  115. 1020

    Mississippi – Just think of the Billions upon Billions we could save……

  116. 1020

    Gann – Go with the phlow pharm…..  :)

  117. phil

    Mississippi/Hemas – Damn, there's that Mississippi schooling kicking in!  8) 

    $85Bn/Pharm – Look how excited they were last week about $50Bn in inflows.  $85Bn a month is a really crazy amount and the Fed has already said they'll do more if they have to.   I like the chart – I think – I'll let you know for sure tomorrow when I'm done reading it…  ;) 

    Great Lance video:

  118. Pharmboy

    Bears just don't know what to do…..

  119. Pharmboy

    Or…this is the market…

  120. Pharmboy

    Phil…chart….

  121. yodi

    Phil YELP no one is perfect (8

  122. albo

    No sooner had I complained then this came out.
     
    3:47 PM Dell (DELL +1.8%) spikes to $13.26 after the FT reports Silver Lake is willing to pay $15/share. Would that be enough to satisfy shareholders who view a $13-$14/share offer as inadequate? (

  123. crussell14

    Phil – what are your thoughts on TLT movement? Thanks

  124. phil

    81M on the Dow with 10 minutes to go is about the norm lately.  Yesterday we finished under 120M.  If volume is going lower – it's a toppy sign – we had steady volume while consolidating for last breakout.

    Retailers in 40 different states can now charge consumers an extra 1%-4% for paying with a credit card as long as they disclose the fee. The extra fee is a byproduct of an anti-trust case settlement with MasterCard and Visa in which the credit card giants were alleged of conspiring to hold back the fees stores can charge. Retail analysts expect large companies such as Wal-Mart, Target, and Costco to refrain from tacking on the fees, but it could be open season for smaller chains and independent shops.

    Amen brother!  Some Apple (AAPL +1.7%) commentary: 1) Respected NYU valuation theorist Aswath Damodaran thinks there's a 90% chance Apple is undervalued, and dares investors to buy. "It is easy being a contrarian value investor, in the abstract, but much more difficult to be one in practice." 2) Raymond James notes the gap that has opened up between the iPhone's performance in the U.S. and elsewhere. While AT&T and Verizon's Q4 iPhone sales rose 25% Y/Y (sales of all other smartphones fell 2%), international growth is expected to fall to 15% in Q1 (below the market's growth). 

    DELL/Albo – I hope so – they need to remember they are up from $9 on the rumor already so $13 isn't the new "value" for the stock.  Now, how do we short Silver Lake?  

    TLT/Crussell – Just money moving out of bonds and into stocks.  Perfectly normal.  

    Oops, bell already.  Today flew by.   Pathetic 106M on the Dow is down 10% from yesterday so not a good trend and the Dollar was down 0.3% so that really was all the market gains.  

    AMZN not so impressive after hours but not too severely punished so far. 

    Amazon (AMZN): Q4 EPS of $0.21 misses by $0.07. Revenue of $21.27B (+27% Y/Y) misses by $101M. Shares -6.3% AH. (PR) 

  125. yodi

    AMZN just check on my comments of earlier!! Looks like my 260 putter is holding already.
    IFLAN congrat on you long put as well better cash it fast!

  126. rustle123

    So glad I don't play AMZN, every qtr they miss.  They are going to fall short on Revenues for 1st qtr, they barely earn any money per share and they go up a ton after every miss.  That's why I will never short it exception being when market is due for an incredible correction.

  127. yodi

    Phil AMZN not perfect but holding (8

  128. deano

    FU AMZN!

  129. yodi

    AMZN this is a typical example where stops are useless my discussion the other day

  130. wombat

    Yodi // AMZN
    Thanks again.
    I rolled the $260 PUT down to $250 just in case it was harsh, but I had a feeling they would miss – we'll have to see what happens tomorrow
    but good call my man.

  131. yodi

    Any news on BRCM Bloomberg is not saying anything?

  132. yodi

    womb
    I feel that play of above is a perfect setup to sell puts on such a contrerian stock. All think that stock will go down well you would gain on the far out play  if it would and if the stk goes up you put the monthly short put in your pocket

  133. wombat

    SA says beat both top / bottom
    +0.11 div raise

  134. yodi

    looks like BRCM is slowly creeping up so Phil your play an other winner I hope

  135. wombat

    BRCM
    so the plan tomorrow is to confirm a rise on the earnings, close the bear spread
    and let the $28 put run ?

  136. lvmoda

    As I scratch my head on the AMZN post-earnings movement, I noticed Marketwatch.com has a 'social sentiment' score which indicated 81% bearish sentiment.  I guess that explains some of move up; perhaps many were expecting an AAPL-like collapse and now need to cover their shorts.  

  137. Jordan

    Phil/AAPL – thanks, that's very clear.  It's tough sometimes to distinguish protection from illusion…

  138. wombat

    AMZN
    "Amazon missed their revenue estimates… They missed their earnings per share estimate… And they guided lower for the next quarter. That is pretty much the trifecta. Yet Amazon's share price is UP 4% in the after market – correction, now 10%."
    Apparently earnings and fundamentals mean 
    nothing. We are living in a post-Buffet wonderland.

  139. Peter D

    Just checking in!  Thanks, stjeanluc for the virtual short strangle portfolio updates.  Looks like rolling AAPL putters down is paying off well.  Yes, I saw those long calls (SPX and RUT) that have nice premium, but I'm waiting to see where the upside momentum goes in the next couple of days.  Those calls are our hedges for the short calls.
     
    Thanks, Phil for the congrats!  It's a wild market and relentlessly moving up that frustrating for the premium sellers.  With low VIX, it's hard to play, but AAPL does provide some excitement.

  140. yodi

    wombat
    BRCM we will see tomorrow if the stk goes up we will lose on the bear put possible see a smal gain on the jan15p but do not bet on it

  141. wombat

    Phil / Yodi
    You guys are on TOS, yes ?
    Just as an example of PM, 
    AMZN Feb 16 p $260 – what you MReq ?
    Yodi / AMZN
    Dont know ask me why, even though I was bearish, I sold 2 extra puts @ 200 – perhasp cpver the spread if it doesnt go crzy.
    It's behavior like this that puts stocks on my blacklist. 
    The only thing that I can think of is that the short ratio was so high, that folks were expecting an 'Apple' drop and had to cover their shorts.
    What's your thoughts ?

  142. Pharmboy

  143. jromeha

    Iflan's usually money on his momo stuff and I followed him on the strangle but got cold feet when I realized 2600$ is way too big of a risk for my small account and closed it for a 30$ profit and very glad I did!

  144. stjeanluc

    So far AMZN up about 4%. The short straddle looked like the way to go this time. We'll see tomorrow!

  145. Pharmboy

    Well, that solves the AMZN AAPL debate.  AAPL's days are over as a high end retailer….unless they squeeze out low margin products, then they will zoom up!

  146. scottmi

    Gann/Pharm – Elder has some words re Gann, Elliot, etc..  see end of page 22 and onto 23 here on google books, about Dead Gurus

  147. yodi

    womb
    What are you smoking?
    If you look at my AMZN trade, shown above, I hold besides the far out Jan15 put play the Feb13 260p that means I sold the 260p for 6.30. Due to the long play as explained I do not pay any margin on the Feb putter!!!!!
    At 4PM today the Feb 13 putter ran up against me to 10.00 and will be tomorrow .50 I hope, but in the end of experation will be worthless. Meaning after exp I will sell an other short put of March13 again not paying margin. So this game will be carring on for months to come. If AMZN runs in to the 300 and up the long play will turn negative however you will make up well on the monthly putter sale. Looking at my calculations, should the stock run up to about 310 the play should be closed by the beginning of Jan14. Hope you can still read my handwriting

  148. wombat

    Yodi //
    Unfortunately can't do that anymore ; > 
    Here's where we aren't connecting. I hope my english isn't confusing you.
    We both hold the Jan15 put play +260/-220
    We also had the Feb13 -260p that you sold for $6.30
    The only difference is that at the last minute I got cold feet and rolled the 260 to a 250, to give a little breathing room.
    I also sold a Jan14 $200 for $9

    We essentially have the same trade.
    The reason I ask about the margin is because my broker is holding 17K in Margin Req
    ( $9K for the Feb13 250p / 8K for the Jan14 200p )
    and, as I suspected, TOS is different.
    I hope you're right about your $260p – so you're saying you're still bearish but if it turns bull, you'll just keep selling puts all the way to Jan15. Ha. Thats really incredible.
    I know you and Phil had been working with you for years. It may take me some time for me to get used to your sentence structure. If you'd like me to correct your english I'd be happy to ; > No offense, really, if I read your posts a few times I can understand.
    If you'd like to mail me off-list my email is jjresponder@me.com
     

  149. yodi

    terrapin22
    I tried to get some cost information out of all this AC stuff
    Flight cost for two aprox 1120.00 if there are no extra charges for peanuts
    Taxis AC say 250.00
    Hotel cost need to stay till Tuesday as there would not be any return Monday night aprox 950.00
    Fee 400.00
    and possible some chicken wings to make  fill in for same meals 100.00
    Runs to 2820.00 not forgetting Phil's generous tipping for about 200.00
    So we run up about 3K for a three day visit. This does obviously not include any shows or something, just look my wife in the closet while I am at the meeting!
    Sorry I can buy two first class airtickets to Europe and back for that. all meals and drinks included.
    May be my caculator is smoking as well.

  150. qcmike

     
    Phil
     
    FB Any trades on earnings out Wednesday after the bell?
    Thanks
     

  151. yodi

    womb,
    I think I am OK with my English so thanks for the offer. But sometime something is written wrong or some typo.
    Here again the original play
    Buy Jan15 260p @ 43.98 now 44.60
    sell Jan15 220p @ 27.03 now 27.07
    sell Jan15 145p @ 8.35 now 7.80
    sell Feb13 260p @ 6.30 now 8.72
    I have tried to set up the same play and TOS is charging 1,337.00 for two option plays, meaning two of each.
    Hope you can understand this. If you like I can write this in German or Spanish as well.

  152. rexx

    CHK up 10% after hours on McClendon's retirement.

  153. yodi

    wombat
    Looking at your comments again I think you should in deed start practicing with TOS paper trading as Phil suggested. There again you will see full margin charges no PM. I do not know how many plays you made but it looks high for two. But if you have sold any additional putters they are obviously naked and margin is heavy, as they not covered by the far out Jan15 play.

  154. Savi

    yodi--I have been following your discourse with wombat on the AMZN trade--I hope you do not mind my asking but to reiterate
    buy 2 AMZN 15 260 puts
    sell 2 AMZN 15 220 puts
    sell 2 AMZN 15 145 puts and (sell 2 or 1)
    sell 2 AMZN feb 13 260 puts-(sell 2 or 2)
    am I right in the amount of contracts— specifically on the put sales—and margin is only 1337 on TOS?
    TIA

  155. Savi

    on the 260  sales meant 2 or 1 not 2 2

  156. jromeha

    Savi- pretty sure a naked put sale margin on amazon is much higher than 1337.
    yodi- you could try rooming with someone to cut down on costs. Don't think taxis should cost 250.

  157. stjeanluc

    These charts are starting to look a bit scary. Looking at the Russell, we can see that since mid-November we are up more than 15% with only 2 small 2.5% corrections! That's 15% in 2 months… Not sure it's sustainable.

  158. phil

    So AMZN misses earnings and misses guidance and drops to $250, bounced to $290 and now back to $283, where it was on Friday.  Just another ho-hum earnings report, I guess…

    Amazon (AMZN): Q4 EPS of $0.21 misses by $0.07. Revenue of $21.27B (+27% Y/Y) misses by $101M. Shares -6.3% AH. (PR)

    More on Amazon's (AMZN) Q4: The company swung back from its Q3 loss as North America sales rose 23% Y/Y to $12.175B and International sales gained 21% to reach $9.093B. Growth in the company's Electronics segment outpaced Media segment sales. Free cash flow decreased 81% to $395M for the trailing twelve month period compared to a year ago with real estate outlays factoring in. For Q1, the company sees $15.0B-$16.6B in revenue and expects profit to fall in a range of -$285M to $65M. A conference call is scheduled for 5:00 EST. AMZN changes direction, now  +3.2% AH. (PR)

    Amazon (AMZN) now +9.3% AH in spite of its Q4 miss and light Q1 guidance. The earnings call (live blog) featured pointed questions about slowing paid unit growth (32% Y/Y vs 39% in Q3), but also positive comments about gross margin, which rose 340 bps Y/Y 24.1% (up from Q3's 180 bps increase). The fact 3rd-party sales accounted for 39% of paid units (up from 36% a year ago) helped, as did a 67% Y/Y increase in "Other" North American revenue (dominated by AWS) to $769M. Active customer accounts surpassed 200M (up from Q3's 188M). EBAY +0.7%.

    More on Amazon: The Street is betting fulfillment spending growth (+36% Y/Y in Q4 to $2.26B) will slow in 2013: the CC featured questions about a slowdown, and whether having warehouses closer to consumers is lowering shipping costs. There was also a question about whether Amazon is letting 3rd-party sellers (40%+ unit growth) handle more low-margin sales. Amazon responded in part by noting sales of margin-compressing electronics were soft. Technology/content spending +56% Y/Y to $1.35B, thanks to AWS-related capex.

    At the close: Dow +0.52% to 13954. S&P +0.52% to 1508. Nasdaq +0.15% to 3154.

    Treasurys: 30-year -0.26%. 10-yr -0.07%. 5-yr -0.02%.

    Commodities: Crude +1.05% to $97.45. Gold +0.53% to $1663.85.

    Currencies: Euro +0.26% vs. dollar. Yen -0.13%. Pound -0.41%.

    Market recap: The Dow continued its climb toward 14,000, sparked by Pfizer's earnings beat and offsetting weak consumer confidence data. The Nasdaq lagged, as VMware, BMC and Seagate issued disappointing guidance. The energy sector set the pace following strong earnings from refiner Valero; crude oil topped $97.50on Mideast unrest and supply concerns.

    8:08 PM Japanese stocks move up again today, piggybacking gains for the broader U.S. market earlier today. The Nikkei Average is currently up 0.9% to 10,958, with Telecoms leading gains: Softbank (SFTBF.PK +2.8%), KDDI (KDDIY.PK +2.6%), NTT DoCoMo (DCM+0.8%) and Nippon Telegraph & Telephone (NTT + 0.7%). Energy also trade higher: Japan Petroleum (JPTXF.PK +2.7%), and Inpex (IPXHY.PK +1.1%).

    Barclays announced automatic closure of the leveraged ETNBXDC, which is linked to the inverse performance of the S&P 500. The securities are being redeemed as the result of a stop loss termination event occurring on Jan. 4.

    Bridgewater’s Dalio: ‘Game Changer’ as Money Shifts (Bloomberg)

    And how long have I been saying this?  Immigration reform could boost U.S. economic growth (Reuters)

    We WILL manipulate oil, no matter what you try to do to stop us!  Valero (VLO) CEO Bill Klesse weighs in on the Keystone pipeline (TRP), calling the controversy "ridiculous. There’s pipelines everywhere. There’s a pipeline in front of your home. Out in the streets. Canada’s an ally, and the refineries on the U.S. Gulf Coast need the Canadian oil." But if the Keystone decision doesn't work out, VLO is prepared to use barges and rail to move the oil to the Gulf. 

    China’s coal use grew 9% in 2011, rising to 3.8B tons, meaning the country is burning nearly as much coal as the rest of the world combined. China relies on coal to fuel nearly 80% of its power plants, vs. ~40% (and falling) in the U.S. And by 2017, India likely will become the world’s second-largest coal consumer, surpassing the U.S. The issue of climate change isn't going away any time soon.

    Risks of Hurricane Sandy-like Surge Events Rising (Climate Central)

    Why Greenland’s Melting Could Be the Biggest Climate Disaster of All (Mother Jones)

    Fortunately, there is hope:   Solar: It’s about to be a whole new world. (Noahpinion)

    Carl Icahn offers kind words for Aubrey McClendon as the Chesapeake (CHK) CEO heads for the door: "Aubrey has every right to be proud of the company he has built… and the collection of assets he has assembled… the best portfolio of energy assets in the country." CHK +10.8% AH.

    More on Dolby Labs (DLB): FQ1 beats across the board on essentially flat revenue growth over the prior period. For Q2, the company guides revenue in the range of $240M to $250M and an EPS of around $0.68 to $0.75. The Street is at $251M in revenue and earnings of $0.73 per share. Shares +3.5% AH

    Broadcom (BRCM): Q4 EPS of $0.76 beats by $0.03. Revenue of $2.08B (+14.3% Y/Y) beats by $10M. Expects Q1 revenue of $1.9B (+/- 4%), below consensus of $2B. Expects Q1 product gross margin to be flat-to-down 50 bps Q/Q. Shares -2% AH. CC at 4:45PM ET (webcast). (PR)  Broadcom Corporation (BRCM) declares $0.11/share quarterly dividend, 10% increase from prior dividend of $0.10. Forward yield 1.31%. For shareholders of record Feb. 15. Payable Mar. 04. Ex-div date Feb. 13. Shares -1.2% AH. (PR)

    Digitimes joins Phone Arena in reporting Google (GOOG) is working on a Nexus 7 tablet with a 1080p display. The device will supposedly be made by Asus (Phone Arena reported LG) and sell for $199-$249 (like the current model). That would make it a tougher rival to the iPad Mini, which sports a 1024×768 display (for now) but maintains a big edge in tablet-specific apps. The site adds total Nexus 7 shipments will surpass 6M by month's end - Asus reported of ramping sales for the Nvidia-powered (NVDA) tablet in October.

    Are you a value investor? Take the Apple test (Musings on Markets)

  159. phil

    Stops/Yodi – Yes, on a stock like AMZN, completely pointless.  

    Of course AMZN deserves a big move up – after all, they did earn 21 cents per $285 share this quarter.  It takes AAPL almost 36 hours to make .21 per share (15 cents a day per $460 share).  Thank goodness we have the market to tell us what things are really worth or we'd probably be confused…

    BRCM/Yodi – Steady as she goes is perfect for that trade. 

    BRCM/Wombat – See, you are totally getting it already!  Now that we've steadied out after earnings, you have 3 months until the next one and, if you sold the 2015 $28 puts for $3.50, then you can expect them to decay 1/8th per Q so .43ish and the delta on those puts is .27 so, unless you begin to think BRCM may drop $2 over the next 3 months, the premium decay (Theta) should keep you ahead of the game.  And, of course, if you really, Really, REALLY want to own BRCM at net $24.50 – then there's no worries at all unless BRCM tracks to drop more than $1 per Quarter.  

    You're welcome Jordan.  These are things you learn over time with experience – I'm just trying to save you a step or two.

    Excitement/Peter – Don't forget NFLX, back to $170 on all the AMZN excitement.  

    AMZN/Wombat – I will change in the morning but net $33 on my screen.  I don't think you can explain AMZN based on the fact that "so many" people had it short into earnings and were forced to cover because it didn't drop like a rock.  People aren't as stupid as other people like to think they are and the ones that are quickly lose their money and aren't trading anymore anyway.  

    “The man who begins to speculate in stocks with the intention of making a fortune usually goes broke, whereas the man who trades with a view of getting good interest on his money sometimes gets rich.”~ Charles Dow, 1901

    Consumer Confidence/Pharm – Well if I voted Republican and watched Fox or CNBC or most of the MSM with their fear-mongering on the Fiscal Cliff, the Debt Ceiling, the Tax Hikes, etc – I'd be less confident too.  On the other hand, if you look at how much better Q4 is than was predicted and if you realize that companies are run by people who are mostly Conservative, Republican FOX/CNBC-watchers and hang out with people who are the same (at the same clubs, restaurants, charities, etc.) – then you begin to see how these polls can be grossly misleading and how that same negativity affects the Fed's Beige Book and many other economic indicators (like PMI, which is an opinion poll too) and you realize it's a very bad idea to fall into this false-data trap.  

    AC/Yodi – It's about 3 hours from NYC to AC and you can get cheap limo or nice buses that run constantly so flying to NYC should be cheaper and you can make a week out of it (there are also cool helicopter rides to AC if you want to splurge – not even an hour to get there).  Also cheaper to fly me to Europe for a conference there.  As long as 20+ people are interested, I wouldn't mind going actually.  Maybe next year. 

    FB/QC – Total random number generator.  The moved 5% just today.  I'd say no way to $35 so maybe selling March $34s for $1.05 against a Jan $35/40 bull call spread at $1.30 where hopefully the March calls expire worthless and you keep the net of the long spread but not super-exciting with the low VIX.  I think they may have some poor internals and surprise to the downside so I wouldn't mind a craps roll on the June $20 puts at .25, which will double, at least, if they drop $3 (10%) and probably hold .10 on a $3 rise so, if you don't mind having $1,000 on the table for a craps roll – then may as well pick up 40 of those puts, which can make a quick $1,000 on a FB miss and maybe $650 at risk (but you can offset that with 5 of my bull plays!).  

    Big Chart/StJ – 15% every two months is not sustainable but another 15% is doable before the law of large numbers does us in.  Would be nice to have a little pullback to define a new bottom though, but look at that 2010 run – S&P 1,000 in June and a jerky start into Aug (1,040) but then pretty much straight up to 1,344 – that's a 33% move up.  Also from Thanksgiving 2011 to April 2012, we pretty much went up from 1,150 to 1,422 without a break and that's 23% so I'm not even sure we can consider a 20% run a "black swan" when we seem to have them every year…

    Gotta love the Fed!  

  160. scottmi

    Egypt – more trouble.. will this cause any oil price pressure?

  161. Peter D

    Phil/NFLX – Just looked at the chart and that would kill the premium sellers for sure. Good for premium buyers!

  162. yodi

    Savi
    PM margin on the AMZN trade All trades were made in sets of two. I do not remember the original margin but Yesterday I entered the original trade again and that was the margin given. I changed it to different ACC's and it stays the same. I even set it up on paper trading and the margin was 25750. Quite a difference! I even checked it on the margin explain tap on my live account at a stock value at 239.00 margin req is 3792 and at 264.00 it is down to 121.00. This is TOS and that is the best I can get out of all this.
    When ever I show a play, I like to show the PM margin given by the trade tap of TOS before  placing the order.

  163. yodi

    Phil Thanks for the recommendation on flights. The flight cost is one thing but the charges for a hotel room apear to be for one person only meaning you are paying 558$ per night (Saturday night) for two people. God knows what they charge for the Monday night. I had planed to stay with friends in WPB for a week before going to AC. But I see this more like a 3K bill not including my stay in WPB. My stay in Europe for 5 month runs to about 10K Euros

  164. stjeanluc

    20% a year / Phil – Gotta love socialism…

  165. phil

    Good morning! 

    Hotels/Yodi – No, you don't pay more for a 2nd person in a hotel in the US. Weekends are generally much more expensive than weekdays.  With airfare from Europe taking such a big chunk – the hotel isn't the issue.  Too bad, I remember when Laker was $99 to London (of course they cancelled the flight half the time, but that was the joy of travel back then).   

    I think I was also fortunate to live through a brief period when travel was relatively cheap.  When I was a kid, airfare was very expensive but, by the time I was traveling as a teen, discount airlines came along and the industry went BK trying to outdo themselves with low fares.  Now it's pretty expensive to fly again – real sticker shock when the whole family wants to go somewhere.  When I was in my 20s and 30s – I was either skiing out west or on a sunny beach or in Europe 2 out of 3 weekends.  People can't afford that anymore.  Not to mention, once you get somewhere it's crazy expensive too.  

    Anyway, let's see what's going on.

    Still flatlining, on the whole but oil tested $98 as the Dollar slips to 79.42 so we have a bit of a false support to the market, driven by the weak Dollar – that could be nasty if it slips the other way so be wary of anything bad coming from Europe, like this Monte dei Paschi thing in Italy (they were halted limit down this morning).

    Spain is a total mess with austerity trashing their economy further and the ECB has been SHRINKING their balance sheet - which is why the Euro keeps going up and I'm not sure that's going to be good for them as they already can't sell cars in Europe.  Even so, German Consumer Confidence is up and that trumps a lot of negatives but Germany is famous for not caring about what's going on in other countries – so maybe they shouldn't be so confident…

    Italy is down 2% on the bank troubles but the rest of Europe is ignoring them and trading around flat.  Asia had a lovely morning with the Nikkei zooming through 11,000 with a 2.3% gain, running out of time before they made the full 2.5% and China was up 1% on both indexes along with Singapore but India was flat.  

    The Fed is at 2:15 and that trumps all today, even though I doubt there will be more than 10 words changed in the entire statement.  Oil inventories at 10:30 should be fun and ADP at 8:15 is a preview of NFP on Friday but ADP steers us wrong about half the time.  

    Tons of data coming to close out this week but next week is data-dead and our biggest week in sheer volume for earnings so we're actually positioned nicely for another consolidation period, which would be healthier, at this point, than going straight up but, as I noted last night – we're only about 2/3 of the way through our "typical" annual rally.  

    Wednesday's economic calendar:

    7:00 MBA Mortgage Applications

    8:15 ADP Jobs Report

    8:30 GDP Q4

    10:30 EIA Petroleum Inventories

    1:00 PM Results of $29B, 3-Year Note Auction (I love how we don't even care that we borrow $29Bn in a day) 

    2:15 PM FOMC Announcement

    Notable earnings before Wednesday’s openABFSADTAUDCBABAHBOHCEVACVLTHCBKHESLLLMPCMTORMWVNOC

    NYCBPSXROKSOTCBVLY, WEC

    Notable earnings after Wednesday’s closeALGNAMP,ATWAVBCDNSCLBCMOCOPCTXSDREEAEDMCFBFIOFTNTJDSU

    LVSMURNOWNXPIOIQCOMQTMSTM,SWKSTSCO 

    4:31 AM European shares are somewhat mixed as investors stay cautious ahead of the Fed's latest policy decision today, with the EU Stoxx 50 flat, London +0.1%, Paris +0.1%, Frankfurt flat, Madrid+0.2%, Milan -1.2%.

    6:00 AM Overseas: Japan +2.28%. Hong Kong +0.71%. China+1.00%. India +0.07%. London +0.01%. Paris -0.13%. Frankfurt-0.19%. 

    6:34 AM The euro and European stocks take divergent courses ahead of the FOMC's decision later, while U.S. equities are mostly flat. The euro breaks above $1.35 for the first time in 13 months and is now +0.5% at $1.3556, with the recent spike helped by confidence that the eurozone crisis just may be over and the repayment by banks of cheap ECB loans. EU Stoxx 50 -0.2%, London flat, Paris -0.1%, Frankfurt -0.1%. Dow and S&P flat, Nasdaq +0.1%.

    Fed Risks Losses From Bonds. The Federal Reserve could be charting a course that leaves the highly profitable central bank with no extra income to hand over to the U.S. Treasury for several years. That is the conclusion of five Fed staff economists who examined how the central bank's bond-buying programs will affect its profitability over the long run. Several years from now, when the economy is stronger, the Fed is expected to sell bonds and raise short-term interest rates to tighten credit and restrain inflation. The group found the Fed might have to sell bonds at a loss and incur higher expenses on interest it pays to banks on the reserves they hold at the Fed.That, in turn, could become a political headache for the Fed, and might even weigh on some officials today as they decide whether to continue these programs, which are aimed at driving down borrowing costs and spurring economic growth and hiring. The issue could come up at the Fed's two-day policy meeting that concludes today

    Santelli's Paradox And Why The Fed's Exit Will Be "Very, Very Messy". (video)

    Draghi’s Bank of Italy Knew of Monte Paschi Missteps in 2010The Bank of Italy under former Governor Mario Draghi spotted accounting irregularities that allowed Banca Monte dei Paschi di Siena SpA to mask losses more than two years before the lender was forced to say it will have to restate profit. In 2010, “a problem came to light” on Monte Paschi’s booking of a structured deal called Santorini, Italy’s Rome- based central bank said in a report dated Jan. 28. The Bank of Italy alerted “other authorities” a year later and talks with those regulators, which it didn’t identify, haven’t concluded. It didn’t explain the delay in forcing the bank to disclose the information.

    Japanese shares closed at a 33-month high and Hong Kong hit a 21-month high, while Australia enjoyed its longest winning streak since October 2003. Stocks were boosted by improved economic sentiment, and, in Tokyo's case, optimism about earnings. Japan+2.3% to 11114, Hong Kong +0.7% to 23822, China +1% to 2382, India +0.1% to 20005, Australia +0.2% to 4,896.7 for its 10th consecutive gain.

    Japanese retail sales +0.4% Y/Y in December vs +1.2% in November and +0.3% consensus. On month, sales +0.1% vs -0.1% and +0.4%. "There are few positive signs for private consumption," says economist Yoshimasa Maruyama. "Employment and income conditions aren't improving much as wages aren't rising."

    Frankrupt Damage Control "France Is A Truly Solvent Country, France Is A Truly Credible Country".

    Spanish preliminary Q4 GDP -0.7% Q/Q vs -0.3% in Q3 and consensus of -0.6%; on year GDP -1.8% vs -1.4% and -1.7%. Euro+0.1% at $1.3503. (PR)

    Spain's crisis strategy under fire as economy buckles againSpain’s economy has tipped into an accelerating downturn as sales data and the money supply flash serious warnings, calling into question Madrid’s high-risk strategy of refusing an EU-IMF rescueThe country’s retail sales plunged 10.7pc in December from a year earlier as austerity bites deeper, one of the worst months since the crisis began. The Spanish car lobby (Anfac) said the country’s output of vehicles has fallen below 2m for the first time since 1993, crashing 17pc last year. The industry has shrunk by a third since the boom. Ominously, car exports plunged even faster at 18pc, dimming hopes that foreign trade can lift the economy out of slump as internal demand shrinks. While Spanish exports have been a bright spot over the past three years – keeping pace with German exports – the momentum has faltered due to lack of investment. Citigroup said it now expects Spain's economy to contract by 2.2pc this year and another 2pc in 2014, pushing unemployment to 28pc. The effects of the slump will overpower any gains from fiscal austerity. The bank said public debt will surge from 88pc to 110pc of GDP in just two years.

    Here We Go Again, Underpricing Europe Debt RiskGreece is the most conspicuous example, as fears about its possible exit from the single-currency area faded. But Spain and Italy, the twin bellwethers of sentiment on Europe, show how markets are underpricing sovereign risk — again.

    Samaras Last Best Greek Hope With Compliance Not Defiance. At his first cabinet meeting after two inconclusive elections and six weeks of turmoil had pushed Greece to the brink of exiting the euro, Prime Minister Antonis Samaras said he’d had enough. In a seven-minute speech, he warned his ministers to deliver while reducing their pay by 30 percent. “I’m not interested in good intentions,” Samaras said at the June 21 meeting, televised on state-run NET TV. “I want results.”

    German Government May Accede to Cyprus Aid. Pressure from euro countries, EU Commission and ECB is so high that Germany will probably have to support Cyprus aid package. Finance Minister Schaeuble still has concerns about approving the aid. The aid package may be smaller than expected.

    Zimbabwean Finance Minister Says the Country Has Just $217 In The Bank.

    "Accidents never happen in a perfect World":  Chinese banks rolled over at least 3T yuan ($482B) of 4T yuan in loans plus interest that local municipalities were due to have paid back at the end of 2012, the FT calculates. Councils took on the debt as part of the central government's massive stimulus program during the financial crisis but are struggling to earn the revenues to repay the loans.

    Beijing Told to Stay Inside a Second Day as Smog Covers City. Beijing yesterday warned the city’s 20 million people to prepare for at least another day of smog, as officials closed some factories and ordered government cars off the road after pollution hit hazardous levels.

    China Hits Key Demographic Ceiling As Working-Age Population Now Declining. (graph)

    Finally, they are going with Chris Rock's plan to tax bullets in California!  

    FERC backs record market manipulation fine on Barclays(BCS)Regulators correctly found that traders for Barclays Plc manipulated the California power market from late 2006 to 2008 and should pay the record penalties proposed in October, the Federal Energy Regulatory Commission staff said in a report. 

    Individual Investors Help Drive Stock Surge. Small investors are jumping back into the stock market after abandoning it during the financial crisis. The return by individual investors is a big reason why the Dow Jones Industrial Average is pushing toward an all-time high. Many analysts and strategists say individual investors are providing another source of fuel for the stock market. One piece of evidence: A total of $6.8 billion shifted into U.S. stock mutual funds in the first three weeks of 2013, according to mutual-fund tracker Lipper Inc. That is the biggest move since 2001.

  166. phil


    Daimler to Rio Tinto Show New Surge in Deals Perilous: Real M&A
    . While the strongest resurgence in dealmaking since the financial crisis is cheering investors and emboldening acquirers, history shows that the largest mergers are often more trouble than they’re worth. About two-thirds of company takeovers exceeding $20 billion since 1996 — including the unions of Pfizer Inc. and Pharmacia Corp., Sprint Corp. and Nextel Communications Inc., and Daimler- Benz AG and Chrysler Corp. — generated losses for the acquirer’s shareholders, according to data compiled by Bloomberg. The 78 buyers lagged behind the MSCI World Index by a median of 13 percentage points in the three years after completing the transactions, falling 21 percent, the data show.

    Canadian economist says provinces should consider oil hedgesA prominent economist recommended on Monday that Canada's provinces consider hedging their exposure to volatile energy prices, less than a week after Alberta's premier warned of a C$6 billion ($5.98 billion) budget shortfall because of deeply discounted Canadian oil prices.

    Wider euro ‘Tobin tax’ will net €35bnThe eurozone’s biggest economies would raise €30bn-€35bn from their planned levy on financial transactions, according to an expansive European Commission proposal that ensnares trades executed in London, New York or Hong Kong.

    Probe of Boeing(BA) 787 Battery Intensifies. U.S. air-safety investigators Tuesday said they are stepping up microscopic and chemical examinations of the lithium-ion battery that caught fire aboard a parked Japan Airlines Co. 9201.TO +0.81% Boeing BA -0.47% 787 three weeks ago, still seeking to determine whether internal defects may have played a role in the blaze.

    All Nippon Airways replaced 10 lithium-ion batteries on its fleet of Boeing (BA) 787s between May and December because of defects, although the carrier didn't inform regulators as they weren't considered a safety issue. Japan Airways also replaced several batteries prior to its two incidents earlier this month. The disclosures add to concerns about whether Boeing and other plane-makers will be able to keep using the batteries. 

    As flagged, the EU has blocked UPS's (UPS) €5.2B acquisition of TNT Express, explaining that the "(the deal) would have drastically reduced choice between providers and probably led to price increases." UPS said over two weeks ago that it expected a negative decision. (PR)

    Nintendo (NTDOY.PKchops its sales outlook for the Wii U gaming console to 4M units by the end of March after holiday sales came in disappointing. It's a crushing blow for the company after expectations were running high that it could sell as many as 5.5M units during the period. Analysts think price cuts and accelerated game introductions could be on tap from Nintendo in an effort to stoke demand. The development could have a negative read-through for GameStop (GME).

    Michael Dell is reportedly looking to gain majority control of Dell (DELL) by adding $500M-$1B of his own money to his $3.6B, 15.7% stake in the efforts to take the company private. Such a combination would mean that Dell would contribute over half of the $8-9B equity payment in the deal, with more money coming from Silver Lake and possibly Microsoft (MSFT). DELL has so far received no other bids, while it's also considering paying a special dividend.

    LG Electronics Reports Wider Loss on EU Fines, TV Demand SlumpLG Electronics Inc. (066570), the world’s second-largest TV maker, unexpectedly reported a wider fourth- quarter loss because of European Union price-fixing fines, slumping demand and a stronger won. The net loss was 468 billion-won ($432 million), Seoul-based LG said in a statement today. That compares with a loss of 112 billion won a year earlier. The company was expected to make a profit of 88.8 billion won, based on the average of 21 analyst estimates compiled by Bloomberg.

    The final spin:  Amazon(AMZN) Rises After Reporting Widening North American MarginAmazon.com Inc. (AMZN), the world’s largest Internet retailer, rose in late trading after reporting gains in sales and North American operating margin as it benefited from investments in warehouses and a jump in holiday shopping

    Samsung (SSNLF.PK) has won the latest round in its global IP battle with Apple (AAPL) after Judge Lucy Koh ruled that the Korean company didn't willfully breach some  Apple patents and therefore left last summer's $1.05B jury verdict intact. Koh could have tripled the amount Samsung would have had to pay if she had found Samsung's actions to be willful, as the jury actually did. Koh also denied Apple and Samsung requests for a new trial.

  167. wombat

    Phil // BRCM
    Ya, I liked both outcomes on this trade. Getting it slowly. I liked the trade a lot.

    Yodi / AMZN
    It looks like something did get lost in translation.
    Heres your original trade 
    Here again the original play
    Buy Jan15 260p @ 43.98 now 44.60
    sell Jan15 220p @ 27.03 now 27.07
    sell Jan15 145p @ 8.35 now 7.80
    sell Feb13 260p @ 6.30 now 8.72
    I have tried to set up the same play and TOS is charging 1,337.00 for two option plays, meaning two of each.

    My trade   ( 2 of everything )
    Here again the original play
    Buy Jan15 260p @ 44.23 now 45.00
    sell Jan15 220p @ 27.20 now 28.25
    sell Jan14 200p @ 8.66 now 10.30
    sell Feb13 250p @ 5.12 now 6.40
    The only thing I may have screwed up was the Jan25 $145 puts, I bought the Jan14 $200's instead beacsue the $260's made me nervous.
    This makes it look like a naked put since the date is different. my bad.
    What are your 
    suggestions / strategies. 

    Thanks for helping me on this.
    Please keep me in the loop on your action.

  168. wombat

    Phil // AH Problem // Confession
    OK, here's a doozy for ya. Ya know how everyone makes that one big mistake that they are so embarassed about they just let it get worse and worse ? Well… the preverbal Albatross in my port.
    CVLT
    About three years ago I bought 1,000 shares and was just learning about options. Long story short, I had covered calls on the shares but I had mistakenly sold too many. Thinking worse case was they were called away at 'x' – I took your '1st quarter holiday' an 'unhooked', not looking at any technology for months.
    Well, they did get called away and the remaining ( extra ) calls were put to me short.
    Imagine my surprise when I got back home. I tracked down the mistake and was going to wait until the shares came back down to break even and cover. They never came down. And, as idiot humans do ( I call it the 'IRS mentality' ) I just ignored it, thinking it would go away, havinf a significantly high P/E, I thought I just had to be patient. 137% run later they haven't gone away. Now I am suffering from a delusion that I simply have to wait for a major correction, like 'what goes up must come down' sort of rationalization. The ultimate irony is that I really loved the company.
    The option repair problem is theres no volume on the stock and its really difficult to get anything filled.
    What would you do. 
     

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