Wednesday Virtual 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…
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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…
Monday Virtual 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…
Friday Virtual 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…
Thursday Virtual 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 virtual 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…
Wednesday Virtual Portfolio Moves
by Phil - December 5th, 2007 9:23 pm
December 5th, 2007 at 9:30 am | Permalink edit copy
Well the first thing I’m doing it rolling my QIDs!
BA should be a good one if they start going. RIMM always good for a nice run and, of course, GOOG has been quiet lately but already I’m not excited by the open so far…
December 5th, 2007 at 9:48 am | Permalink edit copy
Hey check this out on MA
Buy $190s for $13.80, sell $200s for $7.90 / Buy $210 puts for $14.95, sell $200s for $9 nets out to $12 spent on a $20 spread. It’s complicated but you are risking $2 on the outsides but at $200 you get $20 and I bet it will work nicely as the callers lose value. XXX
December 5th, 2007 at 10:01 am | Permalink edit copy
BA call (advance copy): What is wrong with you people? We told you 6 months ago we sold $500Bn worth of planes already and our best year ever to date was $60Bn, what the hell do you think is going to be our outlook. I’m not even talking to you people anymore, just have a donut and go home, you analysts make me sick!
Well, that’s what it would be like if I ran BA anyway…
XOM – DD on $85 puts at .70 XXX
December 5th, 2007 at 10:06 am | Permalink edit copy
XOM – best to tee up the $90 puts, now $2.17 to sell against if they jump up. My escape move is A) sell the $90 puts for no less than $2 and then roll to the Jan $90 puts, now $3.30, hopefully for $3 (putting me in for net $3.90)but very happy with $3.20 as it was $4.20 yesterday. XXX
December 5th, 2007 at 10:13 am | Permalink edit copy
Still no 13,400.
ETFC – I wouldn’t take any position you can’t recover your cost by selling calls against (ie. only leaps where X amount of short calls at the same strike = your cost) as it could be a long, tough road back for these guys.
ISRG – good call OPT! I’m pretty much keeping my normal 20% of the profit stops on my open calls right now (and on my putters) but if we don’t break 13,400 soon I’m going to get a little more proactive. No 1,480, no 2,650 (well we have it at…
Tuesday Virtual Portfolio Moves
by Phil - December 4th, 2007 8:00 pm
December 4th, 2007 at 9:50 am | Permalink edit copy
There goes MA!
Oil flying down as it turns out IRAN has no nuclear program since 2003! Also, OPEC says they will be happy to raise production to meet any demand but don’t forget they closed the ship channel and will probably have a barrel shortage tomorrow which may cause a rally we can really short into.
BIDU going very much the wrong way!
Ah Courtney’s on the program! That’s why I push rules over just following trades, by the time I see a stop out and post it, the stock may have turned (like getting out of MA puts right now!). XXX
December 4th, 2007 at 10:00 am | Permalink edit copy
Now that’s a good test, I just dumped mine for $9 even though the bid was $8.80 right after I made that post. I waited 45 more seconds and they came to me. Had it gone up the other way, I would have rolled or doubled but, since I made a quick buck and it looks bouncy, I’d rather take it off the table than risk a 15% gain in 2 trading hours.
This is what I don’t like about “alerts.” Just because I see a trade or worry about a turn, doesn’t mean the move is set in stone at that moment and trying to do so only makes ME jumpy and forces me in and out of trades with bad timing because I can’t preface every trade by saying “I’m selling the MA puts as I think it’s going to break over $200 and retest $203 at which point I’ll short them again but I’m seeing $8.80 and I really want $1 or better so I’m going to watch it here nad keep my eye on the Dow at the down 50 mark, which it seems to be holding as well as GS which took a sharp bounce off $220 and made me check MA where I confirmed a simultaneous bounce causing me to get nervous but, rather than keep watching I figured I better get an alert out to members even though it may have been slightly premature as I figure it’s 70% better to make the trade here than to take a chance on losing a 15% profit but if it doesn’t break $200 and the market gets rejected at 13,300 then I’ll…
Monday Virtual Portfolio Moves
by Phil - December 3rd, 2007 10:44 pm
December 3rd, 2007 at 9:33 am | Permalink edit copy
ATVI – since it’s a real and solid offer that may be topped, I would see how it handles $26.50, selling the current $27.50s is a very good option though as they should be super inflated and, if you get capped, so what?
AMGN – Decembers are a different story as you don’t have time to mess around but I’d wait as you have a nice buffer so just set a sell stop until they lose around 80%, then you may want to switch.
December 3rd, 2007 at 9:34 am | Permalink edit copy
AMGN – oh sorry, you should, of course set a stop at 20% of your profit and roll yourself down if cheap! I still like them.
December 3rd, 2007 at 10:16 am | Permalink edit copy
AMGN – absolutely you should have stopped him out by now but don’t if you haven’t yet as $55 should be hard to break and the premium is still huge. You didn’t miss much, the low was $1.80, now $2.20 but the proper move in the $25KP is to now sell 10 (assuming you bought out the Jans) Dec $55s at $1.22 as that’s good money and it pays for us to roll to the $55s so a very fair trade all around. XXX
December 3rd, 2007 at 10:22 am | Permalink edit copy
Oil down over a buck already. 13,300 holding up well so far as a floor but we need to get back to 1,480 and 2,675 or nothing the Dow does matters.
Oh, AMGN was for $10KP too!
VCLK $20s have just .30 premium at $4, stop at $3.75 and if they don’t break $24 take the quarter and run. XXX pure mo play.
December 3rd, 2007 at 10:27 am | Permalink edit copy
Gold’s on the move again so we’ve got miners and big brokers running the market today along with Nasdaq bargain hunting, that’s not a bad mix but if the XLF gets off the floor so the XLF $30s at $1.44 make a fun play on a possible run to 13,400 but you have to be willing to DD at $30, probably $1 for the contract at which point you’ll have to really root for a good finish to the week. XXX
December 3rd, 2007 at 10:39 am | Permalink edit copy
AMGN –…
Friday Virtual Portfolio Moves
by Phil - November 30th, 2007 6:39 pm
November 30th, 2007 at 9:52 am | Permalink edit copy
The easiest way to short oil is DUG calls (Jul $39s for $9.50) or DIG puts (Mar $118 puts at $22)but it’s oil AND gas, not pute. Shorting SU is great too and you can buy the Mar $110 puts for $16.20 ($4 premium) and sell the Dec $90 puts when they get to $2+ or sell the $95 puts for $2 if it goes the wrong way on you. XXX
Integrated oil holding up better than they should, SU leading the way down so far but it’s the weekend, who knows which way oil will end today.
FXI – not for the $10KP or $25KP, too pricey and dangerous.
Rev Shark – thanks Joe. If you are a member, best tell his guy I’d love to chat, see if they’re interested and give I’ll send them a note. Maybe some synergies there – I here some people like trading these stock thingies…
XLF – I’m not jumping all over calls here as I don’t trust a big up move on the last day of the month when hedge funds are desperate to show profits. While I wish I had been more bullishly positioned, I’m not going to let that force me into making a mistake by trying to “catch up” and overpaying.
OK, now Esignal has just gotten strange, it’s not showing me many of my symbols…
GOOG/APPL rolls – there is no great time when they pull this sort of move but it’s a step back and take a deep breath kind of thing. Obviously the last thing we want to do is buy out hyperinflated callers.
Everyone is turning back down uniformly and I think we’ll at least test 13,400 but probably 13,300 if we break through there so I hope you’ve all rolled your puts up!
November 30th, 2007 at 10:02 am | Permalink edit copy
Construction spending is down, big recession sign.
DRYS popping as CEO just siad good things on CNBC. Mar $105s are worth a gamble at $15 but we absolutely want to sell against them on loss of mo. XXX
November 30th, 2007 at 10:04 am | Permalink edit copy
X taking a dip. $90 puts very cheap at $1.50 XXX (notice I am playing it both ways for next week).
November 30th, 2007 at 10:10 am |…
Wednesday Virtual Portfolio Moves
by Phil - November 28th, 2007 6:47 pm
November 28th, 2007 at 9:30 am | Permalink edit copy
GS – gosh I wouldn’t be putting them… I guess you could take the opportunity to roll them higher but I think you are better off selling someone else the $200 puts and using that $6 (guess) to put yourself in the Jan $210 or $220 puts. If GS comes down soon, you can always adjust and, if they don’t, you’ll be damn glad you hedged.
It’s always good to sell calls into the initial excitemnent. Just remember, you can always sell 1/3 or 1/2 of 3/4, you don’t have to make all or none decisions all the time and I think 13,150 will be very tough to break without a firm test of 13,000 again.
AMZN – I’m having trouble getting good data on the Kindle. It was really a stealth product for them and could be quite the game changer. We know they are capable of mid $90s and the premiums are pretty good so I like the Jan ‘10 $70s for $35, selling $90s for $2+ but no hurry. This is a grind-out slow play but I think AMZN is safe up here and will make a nice income producer. Rolls down are $5 so every 2 sales buys you a bracket if you need it. XXX
BIDU – too dangerous to play with lately.
November 28th, 2007 at 9:41 am | Permalink edit copy
C is flying!
FXI looking like it’s taking off (so much for shorting BIDU!)
OIH – I wonder if that’s a defect we can buy into? Energy in general very weak but I wonder how many sell programs OIH just tripped? Yes, I have the Debit spread of the $170s and the $180s but there’s no price advantage to me taking him out right now but I will set a stop on my $180 caller at $9 in case it breaks back up.
Lots of profit taking so far into this rally, almost tempted to short GOOG back to $666 but I’m more in watch and wait mode right now.
November 28th, 2007 at 9:45 am | Permalink edit
I’m catching that MRVL knife today! I saw nothing bad in their report. May $12.50s are $3.50 ($1.20 premium) and the Dec $15s are .65 but I’ll wait to sell and maybe get .50 for the $17.50s if I’m right about this being…
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
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