$100K Hedged Portfolio Update

by Phil - May 6th, 2009 4:48 am

Well, there was no reason to adjust the portfolio this weekend but now I’m a little concerned (as I went short-term bearish yesterday morning) and it’s a good time to review our positions.

Monday gave us a lot if cushion but that doesn’t mean we have to squander it.  Our last review was on the 25th and we had made adjustments on the 21st in member chat, triggering the plays we had decided to wait for the previous weekend.  Notice we haven’t really had a down day since so there has been no reason to adjust what has essentially been a bullish set.   Yesterday, in comments, I called for covering our UNG play but that’s the only move we’ve had to make in 2 weeks.  Sadly, vacation time is over so let’s look over our positions and see where action will be required:

Our original positions were: 

• 500 UYG at $3.48, selling 5 May $3 calls for .72 and 5 May $3 puts for .28, net $2.48/2.74
  • UYG now $3.91, May put and call combo now $1.05 = net $2.86 ($190 profit on $1,240 = 15.3%)
    • We are fine being called away on this position
• Selling 2 FAS $7.50 puts for .45 naked
  • FAS closed at $9.40 so 100% profit of $90
• 500 C at $3.04, selling May $3 puts and calls for $1.11, net $1.93/2.47
  • C now $3.31, We took out the callers for .30 on 4/21 and the May $3 puts are .20 = net $3.11 ($590 profit on $965 = 61.1%)
    • We should close this position, it is above our profit expectations
• Selling 2 IYF May $36 puts for $2 naked
  • IYF closed at $41.80, May $36 puts $.35 ($330 profit on $400 =82%)
    • Because of the stress tests, I would rather close these out
• 4/21 Sold 2 IYF May $34 puts for $2.10 naked
  • IYF closed at $41.80, May $34 puts $.20 ($380 profit on $420 =90%)
    • Because of the stress tests, I would rather close these out
• Selling 2 JPM May $29 puts for $1.95 naked
  • JPM closed at $34.77, May $29 puts $.23 ($344 profit on $390 = 88%)
    • Because of the stress tests, I would rather close these out
• 4/21 Sold 2 JPM $28 puts for $2 naked
  • JPM closed at $34.77, May $28 puts $.16 ($368 profit on $390 = 92%)
    • Because of the stress tests, I would rather close these out
• Selling 7 FAZ May $10 puts for $2.40 naked (adjusted to reflect Monday’s gap down open)
  • Stopped out on 4/21 at $1.60 ($560 profit on $1,680 = 33.3%) 
• 5 FAZ Oct $12.50 calls…
  

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Thursday Portfolio Moves

by Phil - December 29th, 2007 5:33 pm

November 29th, 2007 at 9:41 am | Permalink   edit   copy

SU - I’m going to DD at $2.50 for a $2.95 basis and get 1/2 back out there and then be patient. XXX

November 29th, 2007 at 9:42 am | Permalink   edit   copy

Still plenty of buyers out there, this is nothing I want to short into right now but BIDU is looking like a fantastic short up here if GOOG breaks down.

November 29th, 2007 at 9:46 am | Permalink   edit   copy

SPWR, FSLR going vertical! Also going to be good shorts when oil calms down but for now they are rallying the sector.

SHLD broke below $100, I’ll be buying more when it settles down but this is now a long-term play.

November 29th, 2007 at 9:51 am | Permalink   edit   copy

Weak stocks that worry me: DELL, YRCW, NYX, LEH, AXP (very nasty turn), TGT, BSC, MER, NKE, HD (how can it keep going down?)…

I like shorting MA off AXP’s move MA $190 puts at $6.25, stop at $5.50, going for $9+ XXX

November 29th, 2007 at 10:05 am | Permalink   edit   copy

AAPL - any opportunity to do a double roll of your call and your caller up $5 for $1 out of pocket is worth taking. For example, I have the $175 calls, now $10.22 and I sold the $165 calls, now $17.57 and I’m going to roll my caller to the $175s for $7.35 out of my pocket and I will roll myself to the $185s at $4.78 collecting $5.44. This costs me $2 but moves my max collection all the way up to $175 (of course this also means I don’t expect Apple to hold $180). XXX all portfolios!

New home sales much better than expected but not a real number but it should goose the markets until people look at the internals. Supply is still up and sale prices are down but expect a very nice buider rally off the headline and let’s keep an eye on the financials to see if anyone is buying this.

November 29th, 2007 at 10:18 am | Permalink   edit   copy

Oh sorry, I forgot to mention take the money and run on the GOOG $710s in the $25KP, we still have the $730s but I don’t want to leave them both up.
XXX

November 29th, 2007 at 10:40 am | Permalink   edit   copy

PFE - I wouldn’t bother for .10. We have 3 weeks to expiration and you have 2 years for the stock to go up, If anything I would roll to the $20s for…

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Monday Portfolio Moves

by Phil - December 17th, 2007 11:25 pm

December 17th, 2007 at 9:35 am | Permalink   edit   copy

Gloomy - I don’t think there will be a bounce until after the new year at best so yes, rolling down (if cheap) and selling Jan callers (who will lose 1/2 their premium by Jan 2, is a good plan.

LDK - if you are in that butterfly it’s best to take out the caller now and sell yours on mo at the top, the put side will take care of itself. XXX

December 17th, 2007 at 9:39 am | Permalink   edit   copy

AAPL is just amazing!

Financials geting killed but not C - possible bottom for them. Tech actually doing pretty well on the whole with the usual suspects finding buyers. If Apple and Goog fail then it’s time to short the Nas.

Oil just broke below $90!!

December 17th, 2007 at 9:49 am | Permalink   edit   copy

LDK - that was a quick turn! Too quick for me to move so I’m stuck at the moment and trying to roll myself ($70s) to the Jan $75s, then I will roll the caller up to the $70s to get some premium and then roll him to Jan ??? at the week’s end. XXX

December 17th, 2007 at 10:07 am | Permalink   edit   copy

TSO going nuts! Citi is nuts but we’re fine with out Jan $50s and I wouldn’t roll the caller and I won’t pay him .25!

CAT with a gap down.

DNDN giving it all back, we’ll watch them.

HOT at 52-week low, not a good economy sign.

SU heading the wrong way, banking on those rebels over the actual NYMEX action. TBoon owns SU so you can guess who’s paying MENDs bills…

NEM - you should aways roll down if you can get it cheap (and you still believe in your position) it never hurts you if you can do a 35% roll, which would be about $1 on $2.50 and dollar $1.70 on $5 and $3.50 on $10. I wouldn’t be too quick to sell another caller down here as I think this is a great bottom. In fact, lets take a shot on the Mar $47.50s at $4.10 as a holiday crisis insurance play. XXX

December 17th, 2007 at 10:18 am | Permalink   edit   copy

MA got slapped by the EU on their fees, this is the story we’ve been following all summer and was the basis of our short play on them, this should be a cash out on the news event as now everybody knows - nice play for…

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Friday Portfolio Moves

by Phil - December 14th, 2007 11:28 pm

December 14th, 2007 at 9:39 am | Permalink   edit   copy

GM $26!

RTP off a cliff, AGAIN!

KO getting bought, CSCO doing well, VLO getting action, XOM holding up, FCEL still going..

POT getting smoked, IBM not good, DRYS a mess, SBUX NEW LOWS…

APPL is the sign that we’re going to hell, although the Dow down 113 is a hint too! Watch 13,400 of course and 1,475 and 2,650 (already gone) to see which way we’re going.

YHOO may hold $24, that will be very telling if they do in this weather.

December 14th, 2007 at 9:41 am | Permalink   edit   copy

Someone big is buying down here!

Take out Apple callers, I’m willing to stick my neck out on those! XXX

December 14th, 2007 at 9:54 am | Permalink   edit   copy

BUD - sell only executed in one for some reason. Oh well… I still like them as a superbowl play.

We might get that silly oil rally to short into!

December 14th, 2007 at 10:03 am | Permalink   edit   copy

DNDN moving like they mean it now!

LOL Kahn, good trade!

FWLT is acting like a lost sheep again but I barely got out even last time and I’m back on the wagon with them.

C - patience. We will buy them on the way up and sell to cover at the top of the channel. If they break $31 they are good to go to near $32 but there are dividend cut worries and we have to wait for all the income dependent investors to clear out.

December 14th, 2007 at 10:07 am | Permalink   edit   copy

Dollar at 77.25, that’s a squeeze zone for bears!

DELL coming back from the dead. We held up nicely there and now the buying is spreading. We’re being led by energy so let’s watch them for a reversal but let’s also stop out of our callers in accounts where we can day-trade back into them. XXX

December 14th, 2007 at 10:14 am | Permalink   edit   copy

RTP Apr $420 puts at $47.50, selling the $420 puts for $14.20 ($13 premium) and then rolling to Jan $410 puts ($23.50 premium). If the first part wasn’t so expensive I’d put it in the small portfolios but XXX

December 14th, 2007 at 10:19 am | Permalink   edit   copy

OK, I think I see a pattern. Someone is buying up stocks they think are good for inflation cycles. It took me a while to figure it out because I can’t believe big money guys are so behind the curve that they need a .8% CPI report to tell them this but…

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Thursday Portfolio Moves

by Phil - December 13th, 2007 11:35 pm

December 13th, 2007 at 9:35 am | Permalink   edit   copy

Things look pretty good so far but I’m not quite ready to buy just yet.

December 13th, 2007 at 9:56 am | Permalink   edit   copy

XMSR and other adjustments - yes but let’s give the markets some time to find a footing because we don’t want to do multiple moves. Right at the bell yesterday I laid out a move for XMSR that is still valid, that’s the adjustment I want to make as $15 seems much less likely.

FSLR - This stock is officially a joke. It’s like RIMM was and still is and PLAY was last year - just a rumor driven trading vehicle that is manipulated whichever way the retail investors aren’t playing it.

Exchange leaps are valid, we did the RUT last week and we can look for others. A long FXI put may be a good idea right now but I sure wouldn’t sell against it just yet.

JOSB - nice call, take the money and run!

December 13th, 2007 at 10:07 am | Permalink   edit   copy

Well this confirms that BA seems be done going down here. CAT is doing well too and MCD so it’s a flight to safety stocks but clearly that doesn’t include AXP today as they are down 3%.

Selling is picking up and I do expect 13,300 to hold, which would be good if we test it. Brokers off 2% and energy slowly but surely slipping.

Airlines would be a good buy if oil goes lower.

CELG getting hammered.

MSFT doing well as they do whenever Rein is watching!

Nat gas inventories today but if they don’t get a 130+ BCF draw they will cause a bigger sell-off across the energy sector.

I’m so glad we took out that XMSR caller, if they get back to $15 we have no reason to change the play.

NYSE down 109, Dow down 57, whichever one is catching up to the other is probably the market direction for the day. We are probably going to take a run at even since that was a critical point yesterday but if we fail that things could be sad in the afternoon.

December 13th, 2007 at 10:22 am | Permalink   edit   copy

COST - absolutely a buy. There was nothing wrong with their numbers other than a slight miss on the top line but they added members. All retail reported less spending per consumer and, since COST doesn’t get a lot of casual traffic due to those same memberships, it…

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Wednesday Portfolio Moves

by Phil - December 12th, 2007 7:45 pm

December 12th, 2007 at 9:31 am | Permalink   edit   copy

I’m not doing anything in general - sometimes you have to take a hit, take a breath and then come up with a rational course of action. Let’s see what levels we get to before buying into this. I’m not sure how much this really helps anything other than giving the bulls an excuse to rally. The CB’s have been giving money out like candy anyway, this is just more of the same but we’re not going to fight the tape.

December 12th, 2007 at 9:49 am | Permalink   edit   copy

LTP - I’d wait a bit for a real dip. 13,700 is so close to the top of the year’s trading range that you are much more likely to be overpaying than underpaying.

I’m tempted to short here actually but I’ll just be happy if this lunacy calms down here. I’m really getting fed up but S&P 1,505 is nothing to rally about and all I see is a ton of blocks being sold to retail investors who think $40Bn tossed out by the CBs is going to solve something. If they Dow breaks back below 13,600, we can probably short anything we wished we shorted yesterday, like XOM, which is now up over yesterday’s high and very close to it’s 10/29 high of $93.61 (spike to $94.27). At that point, out of prinicpal, I will have to bet the farm on XOM going down!

If you are long, I would suggest exiting with the big boys and just being happy you got out of yesterday’s mess with little damage. Let’s wait for a real breakout before we start “bargain hunting.” If you are short, I would roll up to Jan puts but you have to assume Dec is dead as we only have 8 sessions left.

December 12th, 2007 at 10:09 am | Permalink   edit   copy

DIA Dec puts - I’m only in Jans but I’m not covering.

NEM - after yesterday you have to ask? Yes, cover! AMGN - yes cover! This Fed thing is just more smoke an mirrors, likely capitulation to Paulson’s pals who got caught with their pants down yesterday and need someone to sell to. Remmbemr in yesterday’s comments I noted that there were NO buyers, that could have been catastrophic if it continued today thus the BS move followed by a hard-core media blitz to tell you how great everything is.

Meanwhile, SLM at 52-week low (their…

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Tuesday Portfolio Moves

by Phil - December 11th, 2007 10:35 pm

December 11th, 2007 at 9:46 am | Permalink   edit   copy

CELG - well that didn’t last long but I’m not sure I’d blame them as there are a lot of things selling off harshly.

OIH is starting to be a tempting short but don’t forget we could get a 300-point run a 2:16.

SNDK - good second chance to pick them up at yesterday’s open. I still like them.

Check out RTP - Ka Ching!

Parchesia - you are right but we are facing a global credit crisis and housing correction that will suck Trillions out of the economy if not handled very gingerly. Not even great companies are spared when it really hits the fan but, if you like to stay in no matter what, then that’s the way to go.

$25KP - Selling the T $40s for .85, selling more for .85 against Jan $40s at $1.44 XXX

December 11th, 2007 at 9:47 am | Permalink   edit   copy

$25KP - oops, rolling T $37.50 caller up to $40s at .85. XXX

December 11th, 2007 at 9:54 am | Permalink   edit   copy

CAT still strong, IBM looking good, MA is amazing, I’ll be thinking about that one now. Actually the sellers look done already.

WFR coming on strong at new ATH, FCEL was a great pick, POT ATH, horsemen all rolling now, RIMM is a good catch with the Jan $105s at $9.50 being worth a risk down to $8.50 as we can always sell the Dec $103s for $6. XXX

December 11th, 2007 at 10:04 am | Permalink   edit   copy

GOOG and GS big concern, you don’t want AAPL to confirm that GOAX turn down. SU making an attractive put at $103.88 so if you don’t mind rolling 2 or 3 times the Mar $110 puts at $11 are a good way to go. XXX

The potential payoff on the QID July $35s at $5.80 is great as they are $2 from being at 1/2 of where they were in ‘06 and $15 below where they were in Aug. That makes them a great headge on positive Nasdaq plays.

THQI still going up!

CAKE looking shakey but we’re covered.

TXN - I hope you guys sold into that!

BA - last chance to buy I think…

December 11th, 2007 at 10:16 am | Permalink   edit   copy

WM holding up well.

CSCO happy about TXN’s news.

MA - I have left 30 $200 calls I sold against 20 $210s and 10 $190s and I own 20 $185 puts and 10 $210 puts that are trashed.

I’m going to spend $6 to roll…

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Monday Portfolio Moves

by Phil - December 10th, 2007 6:52 pm

December 10th, 2007 at 9:06 am | Permalink   edit   copy

AMGN - if it’s cheap but I’m not goign to sell the $50s unless it breaks below it. They had a good study reult over the weekend so I’m not sure what this is about. Obviously set a stop on the caller in case this is just silly.

December 10th, 2007 at 9:37 am | Permalink   edit   copy

UBS - I guess the assumption is that if there’s a 10% buyer then this must be the bottom. Undisclosed or not, that’s 10% of the company getting “snapped up” although it’s being snapped at a 2-year low about 30% off it’s high so, just like C - I’d be willing to risk that myself at these levels.

Mixed trading at the open. GS still weak so let’s watch them, AAPL and GOOG for directional indication. The dollar is fading already and oil is up as they shut the ship channel yet again.

RTP - it’s high risk but you want to buy your long end here and wait for a pullback to sell a short. The $480 puts are an insane $26.25 and the Apr $470 puts are just $47.20 so that’s the way to go at the moment.

December 10th, 2007 at 9:49 am | Permalink   edit   copy

Gathering strength now, things could start looking good if we can stay positive on our watch list! Not sure what it will lead to tomorrow but I’m covering my index puts for now in case this builds into another big run.

Commodities leading the way so I don’t love it but hopefully oil will be rejected at $90 and calm that sector down. Interesting TSO and VLO weak against the group. FWLT of all things, not moving.

December 10th, 2007 at 10:03 am | Permalink   edit   copy

THQI - even better going than TTWO!

Pending home sales rose 0.6% for the month, down 18.4% for the year this is roughly in-line but a relief. Very rosey forecast from NAR, says home prices will drop just 3% next year but it’s the BS people want to hear…

MBIA gets new capital, also helping.

DRYS on the move $95s for $4.70 XXX

December 10th, 2007 at 10:21 am | Permalink   edit   copy

BA $90s at $3.60 worth a gamble. XXX

ISRG - Best to roll him up to the $350 calls and pick up + $7 in premium. If you roll yourelf up to the $330s it’s about even and you add only + $5 in premium but be…

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Friday Portfolio Moves

by Phil - December 7th, 2007 6:11 pm

December 7th, 2007 at 9:47 am | Permalink   edit   copy

DUG - I’m dumbfounded that it’s this low. I’ve been considering it but it’s another thinly traded issue. it’s an ultra-short that leverages the downside of XOM, CVX, COP, SLB, OXY, MRO, VLO, DVN, HAL, RIG and others but the top 10 are 62% with XOM, CVX and COP making up 43% of the holdings. I like them because you don’t have to go short, you can pick up the July $38s for $7.20 and sell the Dec $40s for $2 or better, that’s a pretty good spread with the stock at $38.80 and you can pick up another $1 by rolling down to the $39s if it goes the wrong way on you. With those kind of premiums and 7 months to sell, I really like the idea, epecially if they give up another $1.

GS - you are so screwed if that goes the wrong way! What are you people thinking with these vertical spreads? Roll yourself down to 3 $195s if you want to stay vertical, that way he pays the premium and you can roll him down $10 more if GS keeps going down. I would personally go with 3 Jul $220s and then you can roll yourself and the caller down if it drops as it only costs you $5 to roll down $10, about the same as your caller would pay and, rather than selling him once and praying your price holds, you can make 6 more $10 sales against your $30 position.

December 7th, 2007 at 9:51 am | Permalink   edit   copy

AMGN - Now what? Yet another caller I have to send flowers too! For the $10KP, let’s spend $1.40 to roll to the Apr $52.50s and offer to buy out our caller for .50 and we will sell Dec $52.50s IF IF IF we break below $53 (and not for 30 seconds!).

FWLT at ATH!

December 7th, 2007 at 10:03 am | Permalink   edit   copy

IMAX - damn I forgot about them, I used to play them all the time, they are worth $9 easy. Nothing very attractive now other than the Jun $7.50s at $1.25 and selling the $7.50s at some point, now .25 XXX

December 7th, 2007 at 10:57 am | Permalink   edit   copy

MA - just because they weren’t directly downgraded they are going up? We’re going to take out our putters today and maybe do another roll but taking out the putters is a…

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Thursday Portfolio Moves

by Phil - December 6th, 2007 6:13 pm

December 6th, 2007 at 9:44 am | Permalink   edit   copy

Apple could care less what the rest of the market is doing.

RIMM - another caller I’m going to have to buy a drink for.

I’m just playing with the QIDs this month, they seem to be a great vehicle to sell short calls against but they have serious liquidity issues.

December 6th, 2007 at 9:54 am | Permalink   edit   copy

AMGN - probably flat into expiration but no reason not to improve yourself while it’s cheap. If I’m wrong you’re going to want to roll the caller down anyway so save a step and if it heads up you’ll be happy you improved your delta so that’s one of those win-win-win scenarios.

AAPL - in the $25KP we have $14K in Apple calls and $2.8K in puts (not counting the calendar spread). The question is how comfortable would you be risking $14K in a $25K portfolio naked overnight? The calls have outgained the put losses this morning at better than 5:1 and I’ll roll them up again later if I think I can get another day of gains out of them but I’ll almost certainly shift to more of a strangle over the weekend. Stops on Dec $190s in $25KP should be $5 now - ALWAYS SELL INTO THE INITIAL EXCITEMENT and if your doubt my word, Rule #2 says SELL HALF!

SHLD was a gift by the way as we planned to take out our caller. They are down on retail reports but it has nothing to do with them (they can’t get any worse). You do not change your plan because it’s going better than you thought!

December 6th, 2007 at 10:13 am | Permalink   edit   copy

DNA - I’d wait for the final markdown sale.

Mortgage delinquencies getting worse faster than thought. Prime loans 3.12% delinquent, up 10% THIS QUARTER. Subprime 16.31 up 8% All loans 5.3% delinquent up 10%. Greatest foreclosure levels EVER, highest delinquency rates since 1986 the year BEFORE the housing market collaped. Erin is trying to spin this positive while the guys make fun of her for being clueless.

CompUSA is going out of business as near as I can tell, many store closing in the northeast so if they couldn’t hold on for the holidays, things must be dire. My play on that was CC but that was 50% ago, I don’t think I’d chase them.

You guys might hate me later but I’m taking the Apple calls off…

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