Top Trades for Tue, 16 Jan 2018 14:39 – HRB

Wow, and down we go.  

No particular reason – just the whole move up was BS…

Good reason to go long (HRB), who I like anyway:

  • H&R Block (HRB +1.2%) breaks higher after the company announces that it will be the "exclusive DIY" desktop tax software provider at Walmart stores.
  • "In addition to better prices, the value H&R Block can offer Walmart shoppers with our support features, such as free in-person audit representation and unlimited free tax advice, is among the many reasons we are so pleased to expand our partnership with Walmart this year," says H&R digital manager Heather Watts.

They are very reasonably priced at $26.65 and they do pay a 3.6% dividend so I really don't mind owning them long-term. 

In the OOP:

  • Sell 5 2020 $25 puts for $4 ($2,000) 
  • Buy 10 2019 $22 calls for $6.20 ($6,200)
  • Sell 10 2019 $27 calls for $3.40 ($3,400) 

That's net $800 on the $5,000 spread that's almost entirely in the money already.  If HRB squeaks up from here, we make $4,200 (525%) but we will still have the open short puts for another year but, again, I'm very happy to own HRB at $25.

For the LTP: 

  • Sell 10 2020 $25 puts for $4 ($4,000) 
  • Buy 20 2019 $22 calls for $6.20 ($12,400)
  • Sell 20 2019 $27 calls for $3.40 ($6,800) 

So just doubling the OOP with an $8,400 (525%) upside on $1,600.   Nice boring way to make 5x I think! 

Top Trades for Tue, 16 Jan 2018 12:57 – CBT

Cabot (CBT) is a nice, boring specialty chemicals company that's doing something exciting – they just bought a Graphene company called, sadly, Tech Bland for $64M, which is no big deal but a nice indication that they are moving into what I consider a huge growth area and, since CBT currently sells $2.7Bn of other stuff to customers along the world – they have a better chance of landing orders for Graphene than some company whose salespeople aren't already out to lunch with the purchasing managers.  

They are running about $3.80 per $67 share so p/e 17ish and, unfortunately, high in the channel at the moment.

Still, that's no reason not to collect $4 for selling 5 of the July $65 puts ($2,000) in the LTP to remind us to keep an eye on them.  

Top Trades for Tue, 02 Jan 2018 10:16 – CMG

Good morning and Happy New Year!  

See this morning's Report for notes on building our new portfolios for 2018.  This is our first official trade:

CMG/Streth – It's tricky as sales are up 10% from 2016 but profits ($187M) not even half of what they were in 2015 ($475M) and they are getting, at $292, $8.2Bn for the company so at POTENTIAL profit, it's a very reasonable 17 p/e but, at actual profit, it's a ridiculous 44 that you could never justify for a full-grown chain.  How long will it take them to get back to $475M in profit but, even if they do, that really only justifies $300 so I would not be aggressive with them at all, but that's not to say I wouldn't play.  You can:

  • Sell 5 CMG 2020 $270 puts for $35 ($17,500) 
  • Buy 10 CMG 2020 $280 calls for $65 ($65,000) 
  • Sell 10 CMG 2020 $310 calls for $51 ($51,000) 

That's a net credit of $3,500 on the $30,000 spread so 10x return on cash and TOS says $12,400 in margin – so nice and efficient.  Also, since I don't expect them to make any rapid recovery, we can sell 4 March $310 calls for $12 ($4,800) and, if we can collect $4,800 a quarter selling calls, that's another $38,400 while we wait to see if we clear $33,500 on the main spread.  

Let's make that the first official trade for the new LTP!  

What's great about this trade is that, even if CMG goes lower, we can recover our money just through the quarterly short call sales.  Makes it hard to lose!

Top Trades for Thu, 21 Dec 2017 11:05 – BBBY and GNC

We had two nice opportunities in our Morning Post:

You can see the replay of the Webinar HERE and we had lots of fun discussions with plenty of actionable trades.  Sitting in CASH!!! is very exciting as we have nothing but opportunites in front of us and we're able to pick and choose our spots.   

One spot we chose not to pick was Bed Bath and Beyond (BBBY), who I said I liked but I hoped they would miss earnings and disappoint so we could initiate a trade at a cheaper price.  Well they did miss and now they are down 12.5% at $21.50, which brings their market cap down to $3Bn DESPITE earning 0.44 per share (vs 0.36 expected) or $63M on $3Bn in revenues.  Q4 is half the year for BBBY so 3 x $60M is $180M + another $180M is a super-conservative $360M with a p/e of less than 10 so the sell-off is ridiculous and we would love to add a trade here (though we're not rushing in in case they get cheaper).  At the moment I like:

  • Sell 10 BBBY 2020 $20 puts for $3.60 ($3,600) 
  • Buy 15 BBBY 2020 $15 calls for $9.50 ($14,250) 
  • Sell 15 BBBY 2020 $22.50 calls for $4.50 ($6,750) 

That works out to net $3,900 on the $11,250 spread so the upside potential at $22.50 is…
continue reading

Top Trades for Fri, 15 Dec 2017 10:23 – TEVA, ORCL & KMI

2 from the Morning Report and one from Member Chat:

We'll be shopping for companies that are likely to benefit from the GOP Tax Plan.  CFRA put up a list of potential big winners of the GOP tax plan and Oracle (ORCL) just reported yesterday and is selling off a bit, but we think they are playable here ($47.50) for a nice, long entry:

  • Sell 5 ORCL 2020 $47 puts for $6 ($3,000) 
  • Buy 10 ORCL 2020 $45 calls for $8 ($8,000) 
  • Sell 10 ORCL 2020 $52.50 calls for $4.75 ($4,750) 

That spread is net $250 cash on the $7,500 spread so your potential net profit at $52.50 is $7,250 (2,900%) and your worst case is owning 500 shares of ORCL for net $47.50, which is the current price.  While we limit our upside we have great leverage and we're starting off $2,500 in the money so even a flatline from here will be a nice winner.  Ordinary margin on the play is $2,708 so the return on margin is fantastic as well.

While ORCL may be disappointing the bulls this morning, the growth in their cloud platform to $1.5Bn (up 55% from last year), their large pile of overseas cash and their huge benefit from changes in the tax code should get them back over $50 very quickly – even if they have to buy back their own stock to get there.  

continue reading

Top Trades for Thu, 07 Dec 2017 10:18 – UNG

Just because we cashed out, doesn't mean we don't have any more trade ideas.  This one is fun:

UNG/Den – GMTA!  If you want to play UNG here ($5.55) instead of /NGV8 at $2.80, I'd go this way:

  • Buy 50 UNG 2020 $4 calls for $2.05 ($10,250)
  • Sell 50 UNG 2019 $5 calls for $1.25 ($6,250)
  • Sell 25 UNG 2020 $5 puts for 0.70 ($1,750) 

That's net $2,250 on the $5,000 spread but you have a year to roll the short calls so hopefully a $10,000 spread if all goes well (the 2020 $6 cals are $1) and worst case is owning 2,500 UNG at $5 + $500 ($13,000).   If we had a portfolio, I'd put this in it!  

Nasdaq still failing 6,300.

Top Trades for Wed, 06 Dec 2017 11:40 – Cashing In!

Happy Holidays Top Traders!  

In case you missed the memo, PSW is taking all of it's portfolios back to CASH!!! because we feel the broad markets are grossly overbought and we are concerned there will be few buyers for our positions if the market does start to turn down (low liquidity).  

So, better safe than sorry and that includes all of our positions, even the Top Trades.  

We will continue to pick individual trades, like the one below, and there's nothing wrong with keeping good positions if you feel you are well-hedged and don't mind riding out a 20% correction.  

My attitude about that is that, if you have $130 now after starting 2017 with $100 and the market falls 20%, then you'll have $104 and, when the market comes back, you'll have $120 again.

We, on the other hand, if we are right, will still have $130 when the market pulls back and $150+ when it comes back as our new positions make all the gains your old ones will.  On the downside, if the market rallies 10% more, you'll have $143 and we'll have $130.

On the whole, it's a risk/reward game and I'd rather miss gaining $13 than losing $26 as I can always make another $13 with $130 but making $26 with $104 is tricky!  

From our chat room:

Portfolio/Pat – LOL, would you like to send me more information.  I guess I can get into the business of doing individual reviews for people who don't even bother subscribing.  Actually I can't – I'm not a financial adviser and that's simply not a good thing to do!   In GENERAL, you have to use your head and look at each position and think about how you feel about it – especially how you WILL feel if the broad market goes down 20% and your positions are down 10%-40%.  Which ones do you want then?  

If you have "good" gains that can be offset with "good" losses, why not start there and begin to lighten up so at least you are more flexible…
continue reading

Top Trades for Thu, 30 Nov 2017 14:55 – SQQQ, TZA, SVXY

Hedging Adjustments:

In the STP we have:

  • 60 short SQQQ June $30s at $2, now $1.50 
  • 100 SQQQ March $21 calls at $3.20, now $2.55  

Not too much damage on these since our 11/14 adjustment and now we can spend 0.95 to roll our 100 March $21 calls to 100 June $21 calls at $3.50 and that will cost us $9,500 and we can pay for that by selling 40 of the June $28 calls for $2.10 ($8,400).  We're capping the return on the spread to $82,000 but, since the market never goes down, I want to spend as little as possible on the hedges.  

We also have:

  • 200 TZA April $11 calls at $2.65, now $1.90 
  • 100 short TZA April $16 calls at $1.10, now 0.66 
  • 40 short TZA Jan $20 puts at $4.05, now $8

TZA is way down at $12 now and we can cash our April $11s and roll them to 200 July $10 ($2.80)/18 ($1) bull call spreads at $1.80 so a small credit and we'll put a stop on 50% of the short April $16s at 0.80 and the rest at $1.  The net of the spread was $25,800 and we're putting $1,000 back in pocket on the roll (it's not an emergency, get a good price!) And we can set stops on 50 of the short April $16s at 0.80 ($4,000) and $1 ($5,000) so the most we'd put in extra is $9,000 but we're getting 3 more months of time and $1 better in strike ($20,000 into the money) and we've widened the spread from $5 to $8 ($60,000 more but it would have to be a hell of a crash!).  And, of course, we'd only be putting the extra $9,000 in if things started going our way for a change.  

In the OOP, we have:

60 SQQQ June $20 ($4)/$28 ($2.10) bull call spreads at $1.90 ($11,400), now $3.80/1.90 so even and SQQQ is at $22, so this one is fine for now.  

  • 20 SVXY March $105 ($20)/$80 (10) bear put spreads at $10 ($20,000), now $12.25/5.25 ($7 = $14,000)

continue reading

Top Trades for Tue, 28 Nov 2017 12:26 – HBI, M & GE

See this morning's post for my thought process in getting to our Trade of the Year selection (along with more bonus Trade Ideas):

OK, having given it some thought, I would like to play our 2018 Trade of the Year OFFICIALLY as such:

In the OOP let's:

  • Sell 15 HBI 2020 $20 puts for $3.50 ($5,250) 
  • Buy 25 HBI 2020 $18 calls for $4 ($10,000) 
  • Sell 25 HBI 2020 $23 calls for $2 ($5,000) 

That's a net credit of $250 and, if all goes well and we're over $23 in 2020, we'll collect $12,500 more so $12,750 profit potential is 5,100% (it's tricky with credits).  

In the LTP, we're going to simply do double that much so:

  • Sell 30 HBI 2020 $20 puts for $3.50 ($10,500) 
  • Buy 50 HBI 2020 $18 calls for $4 ($20,000) 
  • Sell 50 HBI 2020 $23 calls for $2 ($10,000) 

That one gives us a bigger net credit ($500) and a payoff of another $25,000 if all goes well and, with HBI already at $19.75, we're only looking for 8% a year to make our 5,100% – now that's leverage!  

Also from the morning post – we already have M but, as a new trade, I like:

  • Sell 15 M 2020 $20 puts for $4.65 ($6,975)
  • Buy 30 M 2020 $18 calls for $5.75 ($17,250) 
  • Sell 30 M 2020 $25 calls for $3.12 ($9,360) 

That's net $915 on the $21,000 spread so upside potential is $20,085 (2,195%) if M can gain about 15% over 2 years.  Worst case is you own $30,000 worth of it at $20.46, which is still a buck below where it is now so figure the risk is stopping out with a $5,000 loss (400%) vs the reward of $20,000 and you are $7,500 in the money to start.  

GE is the other one I strongly believe in and that's another one we own but no longer worth owning the stock with the cut dividend so a new play would be:

continue reading

Top Trades for Fri, 17 Nov 2017 15:51 – GT

GT/Calch – I think they rode the wave of pent-up demand (from the recession) that has boosted the whole auto sector.  I don't think it will be as easy moving forward but tires do wear out and people buy new cars so it's a great company to buy on the dip.   We used to own them at $10, then they got expensive – it's hard to love them at $30 but it is a good price.  

Since you can sell the 2020 $28 puts for $4, that's free money (as $28 is a great price anyway) and then you can use that to buy the 2020 $25 ($7.85)/$35 ($3.30) bull call spread at $4.55 and then you are in the $10 spread that's half in the money for net 0.55.  That's so good we should do 10 of them in the LTP!   That makes the upside $9,450 (1,718%) at $35 in 2 years and worst-case is you own the stock at $28.55.  



Phil's Favorites

Amazon Unveils 20 City Finalists For HQ2, Expects To Create 50,000 Jobs In Winning City


Amazon Unveils 20 City Finalists For HQ2, Expects To Create 50,000 Jobs In Winning City

Courtesy of Zero Hedge 

On Thursday morning, Amazon announced that it had reviewed 238 proposals from across the U.S., Canada, and Mexico to host HQ2, the company’s second headquarters in North America, and has has chosen the following 20 metropolitan areas to move to the next phase of the process (in alphabetical order):

  • Atlanta, GA
  • Austin, TX
  • Boston, MA
  • Chica...

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Zero Hedge

China GDP Beats, Retail Sales Slump (Amid Renewed Fake Data Fears)


China GDP Beats, Retail Sales Slump (Amid Renewed Fake Data Fears)

Courtesy of Zero Hedge

China bond yields rose ahead of the macro data avalanche tonight (following a leaked upside surprise print for GDP). GDP, Industrial Production, and Fixed Asset Investment all beat expectations but Retail Sales missed dramatically - growing at its slowest since Feb 2004.

As a reminder, these numbers are landing amid some renewed concern over the integrity of Chinese data, with a nationwide audit of city and county governments last year finding a slew inflated fiscal revenues.


The last couple of months have seen upside surprises for Chinese...

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How Motivation Works

By joniferdingcong. Originally published at ValueWalk.

In this complimentary webinar, learn about the power of motivation in the workplace from Columbia University Professor of Psychology and Business Tory Higgins, an expert on motivation and decision-making.

]]> Get The Full Henry Singleton Series in PDF

Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

You’ll learn:

- Why “carrots” and “sticks” incentives are not enough to motivate people to do better work
- How promotion-focused and prevention-focused people pursue goals differentl...

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Digital Currencies

How a Criminal Defense Attorney Thinks About Crypto Currency


How a Criminal Defense Attorney Thinks About Crypto Currency

Courtesy of 

You are all in for a very special treat today. On the heels of last week’s guest post, in which the Unassuming Banker looked at crypto from a traditional IB’s view, I’ve got a new guest post from a friend of mine who is about to give you a perspective on the nascent asset class you’ve not read before. 


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Insider Scoop

5 Biggest Price Target Changes For Wednesday

Courtesy of Benzinga.

  • Goldman Sachs raised Groupon Inc (NASDAQ: GRPN) price target from $4.70 to $5.40. Groupon shares closed at $5.03 on Tuesday.
  • Barclays boosted the price target for Pure Storage Inc (NYSE: PSTG) from $19 to $22. Pure Storage shares closed at $16.16 on Tuesday.
  • Stifel increased the price target for Deere & Company (NYSE: DE) from $161 to $184. Deere shares closed at $167.54 on Tuesday.
  • Mizuho raised the price target on QUALCOMM, Inc. (NASDAQ: ... more from Insider

Chart School

Weekly Market Recap Jan 14, 2017

Courtesy of Blain.

After 3 days of mild “rest” – and the first down day of the year (!!) for the S&P 500, bulls came back with bells on Thursday and Friday, driving indexes to record highs yet again.  This is starting to get “parabolic”… some shades of the type of things we saw in 1999.  (See the S&P 500 and NASDAQ charts below)  The S&P 500 gained 1.6% and the NASDAQ 1.7% for the week.

“This reminds me of January 2000,” said Kent Engelke, chief economic strategist, at Capitol Securities Management, which manages $4 billion in assets, referring to the nearly unceasing climb to records for stocks and the unease it can inspire.  “It’s scary, the unrelenting advance,” he added.

“The move isn’t about fundamentals...

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How Alzheimer's disease spreads throughout the brain - new study

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.


How Alzheimer's disease spreads throughout the brain – new study

Courtesy of Thomas E CopeUniversity of Cambridge

Harmful tau protein spreads through networks. Author provided

Alzheimer’s disease is a devastating brain illness that affects an estimated 47m people worldwide. It is the most common cause of dementia in the Western world. Despite this, there are currently no treatments that are effective in curing Alzheimer’s disease or preventing its relentless progressio...

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Mapping The Market

Trump Admin Bans CDC From Using Words Like 'Science-Based,' 'Diversity'

By Jean-Luc

These are the policies of a theocracy, not a modern democracy:

Trump Admin Bans CDC From Using Words Like ‘Science-Based,’ ‘Diversity’

The Trump administration has prohibited the Centers for Disease Control and Prevention (CDC) from using words like “science-based,” “diversity,” and “transgender” in their official documents for next year’s budget, according to the Washington Post.

Senior CDC budget leader Alison Kelly met with the agency’s policy analysts on Thursday to announce ...

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Members' Corner

An Interview with David Brin

Our guest David Brin is an astrophysicist, technology consultant, and best-selling author who speaks, writes, and advises on a range of topics including national defense, creativity, and space exploration. He is also a well-known and influential futurist (one of four “World's Best Futurists,” according to The Urban Developer), and it is his ideas on the future, specifically the future of civilization, that I hope to learn about here.   

Ilene: David, you base many of your predictions of the future on a theory of historica...

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Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.


This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

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

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NewsWare: Watch Today's Webinar!


We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...

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Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.


EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...

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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.

To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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FeedTheBull - Top Stock market and Finance Sites

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...

Learn more About Phil >>

As Seen On:

About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>