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April 27th, 2016 at 8:42 pm
Good FB article (that quotes me too). I told her – instead of writing the usual BS about earnings, talk about the fact that FB has 1.65Bn users out of 3Bn globally connected people and that Windows is only used by 1.5Bn.
/NKD/Rexx – The point of playing /NKD (and Burr nailed it) was that it would be slower to react off the AAPL news than our own indexes so it was better to short /NKD ahead of the earnings as they would be easier to pull if we got surprised. As it turned out, that wasn't necessary.
Oil/Rexx – Yes, near $45 (top of current channel) we are likely to at least have a pullback before heading higher but I'm only playing for the technical rejection (hence we took quick money and ran), it's not that I'm bearish as my target is still $45-55 by summer and we're only a month away from the May holiday weekend that kicks off summer. The inventory stuff is short-term noise, as are the rumors of this and that so oil is great to play against short-term moves – as long as you are sure you understand the nature of the short-term move and can be sure it's temporary (sentiment) and not some fundamental change.
Oil has been drifting around that $45.25 line since the NYMEX close.
Oil/Burr – We had a nice profit so I shut it down, wasn't worth sleeping on (and see above). If we get a nice pop to at least $45.50, I might want to take a poke but, on the whole, I'd rather watch Game of Thrones…
Everyone is flatlining into BOJ or maybe our GDP at the moment.
/NG/Burr – I'm not into /NG at the moment unless it gets cheaper. If not, plenty of long-term UNG and LNG to do the heavy lifting. Same goes for oil with our USO, UCO and many other oil plays – there's no reason to play the Futures when they are redundant to option positions unless there is some spectacular mismatch to take advantage of.
Such a good graphic, StJ!
Analysts/Batman – So they are saying what I said?
ESRX/Batman – Not sure where you are getting 6.39 from. $48Bn at $76 and they make $2.4Bn is 20 p/e so even getting to $3Bn (20% growth) is 16. As you note, there is this wildcard of the massive lawsuit with Anthem that's not going away and either they capitulate and eat margin or they piss off their biggest customer – neither outcome is good and that's why they look cheap – the forward risk is priced in.
You're talking $128,000 and I'll assume it's a rational allocation and $64 is a reasonable entry so kudos on that. I hope 5x means 5 contracts and not 5x 20 or I'd say that's crazy and the same goes for 10x the calls and I guess you are gambling there but $4,000 on the possible settlement and pop over $70 is not crazy for a guy with $128,000 allocation blocks to play with. Obviously, I object to you buying naked calls and I don't think this issue is likely to resolve by Aug as it's an actual lawsuit and no trail has been scheduled and now it's summer so Oct/Nov at the earliest.
My attitude on the stock is I hope they either lose the suit or they lose Anthem and the stock tanks and THEN I buy it because Anthem is only 14% of their revenues and not a very profitable 14% at these prices. Anyway, it's a gamble but I fun one and I'd play long with a 2018 bull call spread and not waste the money trying to guess when they settle but also, I'd probably ditch the short puts unless you REALLY want to own 500 more if it all goes to Hell in the lawsuit.