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Posts Tagged ‘BG’

Hi-Ho Long-Term Silver Bulls!

Today’s tickers: SLV, EWT, CL, BG, ILMN, COH, TMO, SPG, BG, ADSK & SLM

SLV - iShares Silver Trust ETF – A bull call spread in the January 2011 contract on the silver ETF today suggests shares of the SLV may rally significantly over the next year and two months time. Shares of the SLV are currently up 0.5% to $18.23. The silver-bull purchased a ratio call spread by buying 3,000 calls at the January 23 strike for an average premium of 1.93 apiece, and selling 6,000 calls at the higher January 30 strike for about 90 cents each. The net cost of the transaction is reduced to just 13 cents per contract. Shares of the fund must rally at least 27% before the investor breaks even at a price of $23.13. The trader stands ready to accumulate maximum potential profits of 6.87 per contract if the stock surges up to $30.00 by January 2011.

EWT - iShares MSCI Taiwan Index ETF – A massive bearish play on the Taiwan Index exchange-traded fund caught our attention this afternoon with shares of the EWT down 0.5% to $12.64 in late-day trading. It appears one investor established a bearish risk reversal in the December contract to position for potential share price declines through expiration. The trader sold 31,000 calls at the December 13 strike for 20 cents premium apiece, spread against the purchase of 31,000 puts at the lower December 12 strike for 20 cents each. The sale of the calls exactly offset the cost of buying the puts. Essentially the reversal is a “free” bet that shares of the EWT will trend lower ahead of the 2010. The investor responsible for the transaction is likely long shares of the underlying fund and seeking protection to the downside. If shares fall beneath $12.00, the value of the underlying position is protected. However, if shares of the fund rally by expiration, the trader risks having shares of the stock called from him at $13.00 apiece.

CL - Colgate-Palmolive Co. – Speculation that Reckitt Benckiser Group may acquire Colgate-Palmolive spurred an all-out call option feeding frenzy on CL today and lifted shares of the U.S. company to a new 52-week high of $86.33. Investors flooded the November and December contracts, scooping up call options to position for further upward movement in the price of the underlying. The sudden surge in demand for Colgate-Palmolive options in the midst of takeover chatter boosted…
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More on this topic (What's this?)
TRADERS BET ON A 60%+ RISE IN SILVER
Deflated!
Read more on IShares Silver Trust at Wikinvest

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Short Weekly Wrap-Up

DJIA fallingWheee, what a great way to end the week!

As I mentioned in yesterday’s post, we had gone into the day flipping our short firepower to BG $60 puts at $1.30 and TOT $55 puts at $1.20 as well as our remaining DIA $84 puts at .84.  We went back to cash for the weekend but consider that the DIA $84 puts finished at $2.04 (up 142%), BG $60 puts finished at $2.10 (up 61%) and TOT $55 puts finished at $2.83 (135%) and you can see how even small allocations out of cash yield very nice one-day returns on put options.  You do not have to take big risks to make big rewards, playing put options allows us to stay flexible and mainly in cash without "missing" too many market market moves.

We blew right through the upper targets I set in the morning and the Dow flew right down near enough our 8,250 (June lows) target that it looked bounceable, as the other indexes were holding up better than the Dow we felt we could play it for a small recovery over the weekend.  We picked up some DIA $85 calls for .76 but elected not to DD at our scale-in target of .64 into the close as we already had bullish plays on ZION as well as Dow components AA, BA, GE and PFE, all longer-term plays that we are looking forward to adding to cheaper if they keep heading down.  VLO and SNY were added in the afternoon as well as a UNG spread since they decided to just give it away at $13 again. 

Cramer Flip flopsWhile we are just dipping our toes into some long posItions, it is the first time in a month we’ve been happy enough with the pricing to even take a chance.  Of course we maintain our long put covers (just in case) but what’s the point of having protection if you have nothing to protect?  On the whole, the volume simply wasn’t that impressive and we attribute much of this drop to people who were "shocked" that the economy isn’t as good as they thought it was (cough, Cramer fans, cough, cough) but it’s EXACTLY as weak as we thought it was and that means there are certain price points we are willing to hit long-term.  Kudos to all who patiently waited with us for pretty much the whole month of June - now comes…
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Phil's Favorites

Bears Emboldened By Low CBOE Equity Put to Call Ratio

Bears Emboldened By Low CBOE Equity Put to Call Ratio

Courtesy of Bill Luby at Vix and More 

Truthfully, I have not surveyed our ursine friends this morning, so I really have no idea if they are emboldened by the low CBOE equity put to call ratio (CPCE), but they should be.

My preferred way of looking at the equity put to call ratio involves using an exponential 10 day moving average (EMA) as a smoothing factor. The 10 day EMA generates the dotted blue line ...



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Zero Hedge

Sprott's Jamie Horvat On "Gold"ilocks And The Three Bears

Courtesy of Tyler Durden

From Jamie Horvat and Charles Oliver, Sprott Opportunities Hedge Fund.

 

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Chart School

Bears Emboldened By Low CBOE Equity Put to Call Ratio

Bears Emboldened By Low CBOE Equity Put to Call Ratio

Courtesy of Bill Luby at Vix and More 

Truthfully, I have not surveyed our ursine friends this morning, so I really have no idea if they are emboldened by the low CBOE equity put to call ratio (CPCE), but they should be.

My preferred way of looking at the equity put to call ratio involves using an exponential 10 day moving average (EMA) as a smoothing factor. The 10 day EMA generates the dotted blue li...

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Trading Goddess

Options and My Patience Expire Today

Well now we're officially cashed out!


As I always do before options expiration I reviewed our Buy List, which, this quarter, is a list of 37 stocks we've been playing since late December and, sadly, after reviewing 37 of our favorite investments very carefully this week - I could only conclude that cashing them out was the only decision I could be comfortable with this week. Of 66 trades we had on our 37 stocks, 64 are winners with an average return since 2/8 of 28% - since most of the trades were designed to make 40% for the year - it just seems silly not to take the money and run now, on March 19th.


You are not supposed to have 64 out of 66 winners in 6 weeks, you are not supposed to make 3/4 of what you anticipate for the year in 6 weeks - that is NOT how the markets are supposed to work! When the ma...



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Oxen Group Trades

The Oxen Report: Five Keys to Fundamental Day Trading

Identifying the Fundamentals

Stocks move under the influence various factors that we can use to identify stocks that are likely to move 3-5% in a single day. Even t...



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The Options Report

By Andrew Wilkinson


Best Buy Option Investors Condone Broker Upgrade in Bullish Action

Today’s tickers: BBY, DNDN, GLD, BAC, AET, BA & NBR

BBY - Best Buy Co., Inc. – Shares of the world’s largest electronics retailer rallied 2% to $41.25 during the trading session after receiving an upgrade to ‘buy’ from ‘neutral’ at Goldman Sachs Group where analysts increased BBY’s target share price to $47.00 from $44.00. Options traders employed a few different bullish tactics to position for continued upward movement in the price of the underlying stock through expiration in April. Plain-vanilla call buyers targeted the April $44 strike to purchase 5,100 calls for an average premium of $0.55 apiece. These investors stand ready to accrue profits if Best Buy’s share price increases 8% from the current value to exceed the effective breakeven point on the calls at $44.55 by expirati...



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Insider Zone


Insiders: March to Exit

By Ilene

Let's take a look at Insider Buying and Selling over the last week or so. These are screen shots from Finviz - the significant buys against a green background first and significant sells against the pink background second.  All the buys fit into my screen shot but the sells did not.  Click here to see all the sells.  

Note that the largest buy in the group, for KITD was at a price of 9.73 (KITD is currently at 11.54). The buy was part of an Equity Offering rather than an open market purchase. Tuzman Kaleil Isaza's (KITD's Chairman and Chief Exec. Officer) history of buys is http://www.insidercow.com/ more from Insider

OpTrader


Swing trading portfolio - week of March 15th 2010

This post is for live trades and daily comments. 

To learn more about the swing trading portfolio (strategy, membership etc.), please click here

- Optrader

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About Phil:

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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Ilene is editor and affiliate program coordinator for PSW. She manages the Favorites backup site (blogroll, archives, more). Contact Ilene to learn about our affiliate and content sharing programs.

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