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Monday Morning Markets

I was at the beach this weekend.

This is important as I noticed something interesting.  Many people stake out spots near the water but, as the day goes on the tide gets higher and the people move to higher ground.  Some people go much higher and some people move just a little but there's a certain point where the water crests up onto the beach and sends everyone scurrying for higher ground in a mad dash.

Then it goes the other way!

Just when it seems that the water is going to go higher than it ever went before (and, thanks to global warming it does!) and just when you start to think the next wave will wash over the top and soak everyone, it suddenly stops and an hour later you can't believe you ever thought the water would get that high as it seems so impossible as you watch it pull away from the beach, exposing sand that hadn't been seen since the morning.

The markets are like that.  Frothy highs and "impossible" lows and lots of investors scurrying back an forth trying to guess where the next wave will stop (day traders) while others stake out medium-term positions (deck chair people) and still others make substantial long-term plays (beach house owners) and are willing to ride out even the harshest storms.  While I have fun playing in the waves I guess I have to think of myself as a shell collector, looking for the opportunities that are uncovered once all the excitement dies down.  Let the other people get soaked trying to guess the waves – we can do very well renting deck chairs in any market!

The moon was full and the tide was high in Asia this morning as the Hang Seng rose 565 points (a new record at 21,582 joined by the Nikkei, which gained 178 points, both finishing at the day's high.  Both sides of the Shanghai Composite did well with A shares breaking the dreaded 4,444 barrier and finishing the day at 4,461 (up 3%).  The boost was primarily the result of the Chinese government going to the US playbook and doing nothing about inflation, a very big surprise that allowed SHI to go limit up (10%) along with a very strong energy sector.

Europe is not so excited this morning despite a bit of M&A activity over there as $71 Brent crude is taking a toll on market sentiment.  Flat is great over there though as the markets are skating along at all-time highs.  Europe makes the mistake of including food and energy costs in their economic outlooks but, as every American debtor knows, you have to accentuate the positive and Eliminate the negativeBHP's $40Bn offer for AA may be back on so that will lead the Dow higher if nothing else.

We have a very light data week with Housing Starts and Building Permits tomorrow, Oil on Wednesday followed by Jobless Claims, Leading Economic Indicators and the Philly Fed on Thursday.  All this is ahead of the Final Q1 GDP reading next week and a lot of inflation data – like I said, there's a lot of frothy excitement just before the tide turns!


Happy Trading is bullish on the S&P and the Nasdaq and It's literally going to be 1,540 OR BUST this week but I've got my pom-poms on for the week as we get ready to catch a few waves and ride them right up to the boardwalk if they'll let us.

ZMan is off for the week but we both think gasoline is pushing it at this level so we'll be watching the refiners closely, especially FTO, who we will be stepping into a short position on as they seem most vulnerable in this market.  We disagree on the meaning of short positions on natural gas being at an all-time high – Z sees it as a contrarian indicator whereas I am of the opinion that, sometimes when everyone bets on the same team, it just means that team is going to win!

[Chart]ML seized $400M from the BSC hedge fund we said was in trouble last week (I guess they are readers), too bad I got out of those puts!  The very wrongly named "High-Grade Structured Credit Strategies Enhanced Leveraged Fund" scrambled to sell-off $4 billion in bonds backed by risky subprime mortgages to raise cash and assets for creditors and avoid liquidation, the Journal reported.

MCO slashed the ratings on 131 bonds backed by sub-prime loans "because of unusually high rates of defaults and delinquencies among the underlying mortgages."  So while we will play at the beach this week, please don't forget to move your towel (protective puts) once in a while or your virtual portfolio may get soaked!

On a happier note: AAPL say IPhone batteries are performing BETTER than expected, with 8 hours of talk time, 6 hours of internet use, 7 hours of video playback or 24 hours of audio playback – that's a phone, a laptop and my old IPod I can toss in the trash and I will buy one for my kids just so I can have a back-up as I'm pretty sure this thing will become an essential part of my life!  For those of you not already in GLW (we have the Jan $22.50s at $3.80, now $5.20) it should be noted that Apple just announced that "the entire top surface of iPhone, including its stunning 3.5-inch display, has been upgraded from plastic to optical-quality glass to achieve a superior level of scratch resistance and optical clarity."  Ka-Ching! 


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  1. Morning all,

    GILD – Gilead Sciences Inc. said Friday the Food and Drug Administration has approved its ambrisentan tablets. Foster City-based Gilead (NASDAQ:GILD) said the drug, called Letairis, is designed for once-daily treatment of pulmonary arterial hypertension.

    Announcement came after hours Friday, and stock was up $1.3; pre-market today up $0.93. Might be worth a play.

  2. from

    YHOO Yahoo!: We are hearing chatter that CEO Semel may have resigned; we are hearing a blog reporting but we have not been able to confirm (27.69 +0.44)

    We are contacting the co to try and verify these reports but right now we believe they are purely speculation.

  3. VIP- screaming on Upgrade! Sold some Oct 100′s
    NMX-down big keeps going down buying back July 140′s

  4. Does anyone know why X down so much?

  5. GILD – too big of a company to play on a small drug approval. If they weren’t near an ATH already…

  6. Lots of big stuff going down, not liking the action at all.

  7. MA-flying
    NOV-bought some August calls
    MRO- keeps heading higher yippee

  8. RIMM is flying again !!! Too scary

  9. X – downgraded to Reduce at UBS

  10. phil,
    have the aapl jan ’09 $110′s @ $28.47, what would be a good near call short play against them?

  11. $10KP FWLT – took out $95 putter for .95 XXX

  12. NMX, ICE, NYX, and CME all down this morning!

  13. $10KP – sorry, if you have $100 putter taking the profit is a good idea there as well as long as you can resell on a bounce

  14. Hi, Phil--

    Sorry, but what does that mean re:FWLT?

  15. Wow….you’re prescient. Thanks.

  16. GOOG getting into gear!

  17. BHI- took profits from last week’s buy.
    CRZO- phil you remember when we played this at $30

  18. FWLT – I have it in several places but in the $10KP we should have had this morning Jan $100 puts at $8 and a Jul $100 put sold at $2 so the play was to take them out on momentum at $1.75 but even at $2 it’s still a good idea if you are able to sell them right back if it turns on us.

    Meanwhile, just to complicate things further I moved the Jan $100s at 8 to the November $105s at $9, well worth trading $1 and a month for $5 in position. XXX

    Also in the $10KP – rolled YHOO Oct $30 calls to Oct $27.50 calls for net $1.10, same logic.

  19. CRZO – yes, wow!

    BIDU flying!!!

  20. CCJ- buying back July 55. .6 gain
    Looking for ideas. LOL

  21. BSC -I have 10 of the Jan08 150 Puts for 10.80, now up $1 and sold 6 of the July 150 puts against it for (a crappy) 3.20 now down $2 on them… I’m not sweating it as I’m only down a few hundred bucks at the moment – but wondering what strategies I should be thinking of: if BSC keeps falling should I roll my sells down to the 145′s or should I sell some more 150s on any sign of a turn up in the stock price?
    Any help much appreciated,


  22. sold GOOG July 470 puts

  23. WNR-up 3% today
    MA- taking off the rest of Oct 145′s from last week. $8 per contract

  24. GOOG back over 513.

    Cant count ur chickens before the close though

  25. BIDU as to fly if FXI is going off, I have the July $150 for $3.60.

  26. phil,
    just to confirm the trade on FWLT for 10K…. buy 3 Nov 105s for 9 and sell July 100s for 2?

  27. AGU got an upgrade today, MON got one Fri, and POT got one Thursday. So I bought the POT July $83.37.
    I love RIMM but the options are pricey and the delta is really low on the OTM calls.
    Phil, GOOG is flying, i miss the opex prices! lol

  28. My watch list is extra long.

  29. phil,
    have goog shrs @ $480, what is a good near play against them? also have shld jan ’08 $200′s @$7.80 and nyse jan ’09 $95′s @ $15.95 as well as JWN oct $60′s @ $1.61 which i need plays against. what analysis should i use in developing a statigy for these positions?

  30. Hi all and thanks for your input;

    was asssigned ICE jun 155c this morning without sufficient margin to cover….luckily I was able to sell at
    open for 33% net and just sold MA jul160 for48% :o )

    have go to work asp,so have a great day guys!

  31. CTRP- added more Sept 75′s

  32. CCJ – if you’re bullish enough to buy it back then you should be holding it open. Frankly I would not have bought it back if I were stuck with it, you’re going to gain that .60 at the month’s end, then roll. Buying now leaves you uninsured and the market looks weak.

    BSC – it is not always a good idea to sell closer puts or calls. Assuming that strategy works for any stock is very dangerous. BSC is not really a problem as you have many levels to roll to. Since you bought 10 for $10,000 I assume you have some cash so best is to take the long view and roll the $150 putter to the $145 putter at around $145, you’ll take a $1.50 hit but your leaps are more than making up for it, you can work that both ways if you want to stay close to your caller but, if you keep him near the money, he will lose pretty fast on a bounce back. I think the BSC news was terrible but it’s a little late to go naked if you haven’t stopped out yet.

    GOOG – earnings are looming!

    Oil and gas killing this rally now. Rates fell .25 over the weekend!

  33. What’s going on with GOOG is earnings positioning. July options is earnings options. July 19th is GOOG earnings.

  34. ELN starting to run again.

  35. Phil,

    I’m surprised your not playing ELN. Especially with all of the positive news on Tysabri and buyout rumors from BIIB again. Did you get burned on this one last time?

    Disclosure: I have the Oct 22.5′s


  36. BEAS and HOKU exploding

  37. Phil,

    Need some advice…

    I got CCJ Sept 60. Should I sell CCJ July 55 or CCJ July 60? What strategy is better?

  38. CCJ-Phil you are probably right! I sold the July’s 55 on Friday as I was taking a $400 lost on the June 55 ‘s as I thought on Wednesday of last week that .30 was an easy $600 as the stock was at 52 and change. WRONG! I also think that I will be able to play the July 55 quite a few more times this month.
    I hold both the 09 50 leaps and the Sept 55′s. So my play is a little different than the groups. So right now I hold only long. Thanks for the thoughts, I can ALWAYS LEARN

  39. FWLT – no sell yet. See above, I now have ONLY the NOV $105 puts at $8.23 after subtracting $1 from my $2 buyback of my profitable sale of the July $95s at $2.

    GOOG – my naked Sept $510s aren’t missing it!

    GOOG ownership – since you are rich enough to own, a fun way to protect is this way:

    BUY GOPSI-July $480 put $4.3
    SELL GOPSO-Jul $500 put $9.4
    SELL GOPGO-Jul $500 call $25.7
    BUY GOPGV-Jul $520 call $14.9

    You get $16 credit and can only owe your $500 putter $20 at worst below $500 and you owe your $500 caller at most $20 over $520 but you won’t care because you win on the underlying and you don’t get called away. I would start by buying the put and selling the call naked with a $1 trailing cover. XXX for the complex spread portfolio but recognize the $6 risk on either side of this trade (with the trails) so not a cheap way to lose!!!

    I’ll get back to the others later…

    Good deal Mike! That’s the whole trick of assignments, not to panic…

  40. BEAS is already over its avg daily trading volume!

  41. ELN – the opposite, I did so well on them last year that I can’t bring myself to buy again at this level.

    CCJ – if I were coming in fresh I would sell the $55 puts IF they go below $2 to protect myself, otherwise I would just hold on.

    BillBig – you seem fine the way you are, still big premiums to collect but leave a little open in case someone decides to consolidate the space (although one would hope that THIS would wake up the anti-trust regulators from their 2-term sleep).

  42. Good morning!

    looks awesome! These online travel companies are getting lots of buys!

    out with +107%!

  43. shld jan ‘08 $200’s @$7.80 – Ouch! I’d roll to the $185s for $10.80 and sell the $175s for $3.90, when you’re behind the goal is to improve your position and get as much premium back as you can.

    nyx jan ‘09 $95’s @ $15.95 – damn, you really got excited at the top! You can roll to $85s for $3.40 and sell $80s, now $2.67 but I’d wait and hope to sell the $85s for about that much and, if it fails, sell the Aug $80s for no less than $3.

    With NYX and other stocks that finished just in the money… Remember that a lot of people get the stock put to them in the morning and freak out and sell in perhaps not the best manner, this can cause dips all the way through Wednesday after expirations, especially after triple witching ones which is why 15 out of 17 Junes are down the week after expiration.

    JWN oct $60’s @ $1.61 – Ouch. Really must scale into these things and also do not buy these things in a high range without a cover. You can roll to the $55s for $1.55 and sell the Aug $55s for $1.45 so .10 to improve your position by $5 and the caller can’t hurt you as you are level.

    PTR – excellent trade happy!

  44. What a volatilty implosion in X ! Stock is down $ 2 and the Jul 105 put is down 10 % !! Is there trade here phil ?

  45. HAPPY
    Sweet trade on PTR
    VIP- always sell into the excitement!!!!! Looking at buying the 105′s

  46. Oil getting up by $69. SU at an ATH – I don’t see how they can keep pretending all this is good for the broader markets but the indexes seem determined to get positive.

  47. PTR

    flying! see new article on Wang’s World/Seeking Alpha

  48. X – that’s not unusual and more reflective of big demand last week, X play is to the upside if the market comes back. BIDU and GOOG trying to lead us higher but GOOG having trouble at $515

  49. FSLR
    still going! Dang!!

  50. MRO-splits tonight!
    WNR- forget up 3% now up 5%
    FXI- Hit my target of $125. I guess I am holding. LOL

  51. phil,
    SU- are you still holding the sept 75 puts as i am? what’s the best strategy from here?

    MRO and XOM puts that i held were closed out on friday, both at large losses. did not yet roll into closer puts as you suggested. would you do that now, or just move on from here?

    thanks very much.

  52. Phil:

    Scaling into AKAM. I have 6 Jan08 55 @ 4.08 long, and 3 July 55s short @ .52 — thinking of selling 3 jul 50s. I calculate a 35% prob. that they will finish ITM, but you know how probabilities go…

    Suggestions ?

  53. Hi all!

    Gotta love my China Girls this a.m. CHL out of jul 50′s and 45′s at +60% (and true to form both are higher than my exit prices…lol), Trying to dump the LFC Jan 45′s but no volume on this one right now…..

    DD on the Jul WFR 60′s to an avg basis of 1.95 on a full position. DD on the AAPL Jul 125′s for an avg basis of 5.05 on full position and added some more AAPL JUL 120′s 50% position at avg of 5.10.

    Would really like to pounce on FWLT and MA but not liquid until tomorrow and am going with my AAPL theory first before others are able to be acted upon.

    WTG HT, BBD, OD, MP, LWJ and Phil (of course), this market may not hold, but was a nice first 2 hrs or so!

    btw Phil, on that JWN Oct 60 basis…..that was the other leg from selling the Jun 55′s that expired worthless on Fri. Am pretty sure that basis if adjusted is closer to .90…..

  54. POT
    already new high and going higher. That’s 240 pre-split! wow!

  55. Any stock with a ticker of POT should always do good. LOL

  56. POT is good but TNH has gone from 95 last week to 110 + today. Maybe POT is a better play now…

  57. SU – rolling Sept $75 puts to 1/2 July $90 puts, now $1.73 (basis will be $3.10 so I may DD if it hits $1.60).

    RIMM – rolled out of $165 puts, moving to Aug $165 puts at $5.50 selling July $170 puts for $4.95 (hopefully a littlle better but just trying to catch up).

    BOT is flying again, ICE may be back to upping an offer so be careful with them.

  58. POT-UP $80 since I brought this stock to PHIL’s Blog. A pat on the back for me. HEE HEE
    ALJ-keeps on going higher.

  59. Think AAPL going to drift down here for a bit…..might be an opp for those Jul 120′s I am coveting(if reasonable)

  60. BillBigD,
    You’ve got all the high flyers!! =)

  61. Phil,

    YHOO – rolled over to Oct 2750 for a net .85, what do you think?.

  62. MRO – holding off but considering neutral roll to Aug $130 puts for $4.80, selling July $130 puts for $3.

    XOM – volatile enough that I’m wiling to just hold July $85 puts for now.

    AKAM – if you are bullish then better to spend $2 to roll the Jans to $50 and save $5 in margin and then sell the $50s (assuming it even holds $47.50).

    Builders heading south again.

    JWN – well that’s much better then isn’t it?

    CAT at new high. POT is amazing.

    Europe closing with a BIG dip, bouncing off ATH’s. I think they need to see us break out.

  63. That’s right BBD – Kudos to our official POThead!

    TM just has a nice blow-off spike down, may be making a move over $125 soon.

    YHOO – from the $30s? Sure, gain $2.50 in margin for .85, what’s not to like?

    Dell moving up!

  64. HAPPY
    Not all high flyer’s sold APPL at $122 last week. SH*T LOL

  65. Phil
    Any TM plays?

  66. Phil,

    I have the CCJ Leaps. Is now a good time to sell the $55 Call? You said PUT earlier, but I wasn’t sure why’d I want to sell a PUT if I thought that CCJ may pull back.

  67. Phil: BBY – I sold July 50′s for $1 against equal number of Jan. 50′s. The July’s hit a low this a.m. & rising. Should I consider buying them back for .5-.6 or just hold?

  68. phi, I have the BBY jan 50s (basis 3.00) now 3.3. Shld I sell the july 47.5s now or wait uncovered for the earnings tomorrow

  69. GM ready for puts now?

  70. Im long 6 TM Jan 130s, and short 3 Jul 130s — hoping for that move up.

    Probly will scale in again on a drop to 124.
    A break above 125.50 will make me feel all warm and fuzzy.

  71. BBY – earnings tomorrow; according to Zack’s, there might be downward surprise; looking to cover my Jan50s.

  72. Phil: I could get out of the DIS (HFWGU) position at even after 3d .13 basis. Time to unload 2/3 or all?

  73. TM – only if it breaks out.

    CCJ – I’m not looking to sell unless it really goes below $55 otherwise just consolidating for a run. I means selling $55 calls.

    BBY/Any play – when you make a quick 50%, not taking 40% off the table is a little silly. You can always resell later knowing you have 40% in your pocket. Even if it goes all the way back to 60%, what did you miss? Your average is still 50%.

    GM – puts are crazy expensive but I like the Jan $32.50 puts for $2.80 and selling the $25 puts for $1.60 XXX My roll out would be to the Jan ’09 $35 puts, now 5.60 but I’ll just hope to get lucky for now.

  74. DIS – lucky you! I’d take the 1/3 to Aug if you want to stick with it but getting out even at this point is pretty good too, the stock has been stuck in the mud but I still have faith.

  75. Jan09 Strike 35s on YHOO Volume 10,000+ today.

    I am starting a position in the Jan10s at Strike 30 $5.60

  76. WHR is getting squeezed.

  77. DECK- CNBC finally mentions this stock as it makes ATH. HEE HEE
    MA-sold early.

  78. DEck July 100 calls look decent.

  79. Bulls starting to run…

  80. Is this what’s moving DIS today? And is it greed that keeps me from getting out even?

    LOS ANGELES, June 18 (Reuters) – Global retail sales of Walt Disney Co. (DIS) consumer products are expected to rise 13 percent to a record $26 billion in fiscal 2007 and the company plans to nearly double that figure within seven years, Disney Consumer Product Chairman Andy Mooney told Reuters.
    … Merchandise spun off from the Disney Channel’s live action shows for tweens, including “Hannah Montana” and “High School Musical,” will reach $400 million by the end of the fiscal year, he said.

  81. Am naked in the GM Jul 32.5 P’s at .62 and 50%….am waiting for awhile though as drop in price not as much as expected

  82. EDU- waiting for VOL to kick in!
    Have you used Optionhouse yet to trade? I’m waiting to see what you think and if good will send them some $$.
    MTW- was looking at buying this morning. Missed it.

  83. YHOO – With all the Semel resignation talk and SeekingAlpha/Cramer demanding his head for a while, isn’t it asking for trouble selling July (or even) Oct $27.50 calls?

  84. Phil, I’m in the SHLD Sep 195s with a basis of 4.2. Should I sell the Jul 180s or the 185s to save this play?

  85. Bill- No not yet but should be within a couple weeks. Will let you know.
    MTW – Love this stock and company. I like the July 85 calls @ 2.70. Liked them better at $2.00.

  86. This RIMM play is so fat full of IV that the delta sucks!

  87. FIG +7%

    What up with FIG today are the Chinese about to give’em some money?
    Maybe simple double bottom on the charts…

  88. FWLT breaking out. 30 cent spread is bit ridiculous.

  89. Phil,
    i am still holding IGW Jul. 70.- which got an enormous value increase but a very large spread. Is it the right time to roll them? If you what do you propose Thanks Henk

  90. Phil,
    I have AAPL jan 2010 $130 at a cost of 31.90. Shall I sell july call against it ? If yes, what strike price? Thanks.

  91. DIS – if you DD’d and you don’t get half out, that is bad greed!

    GM – be patient. O% financing and still no one is buying a hummer.

    Damn, FWLT got away from me, going to wait a bit before selling puts, may sell Aug $105s for $5 or $6 now so my risk is cut to $3 but hopefully they get a rejection at $110 and I can go back to plan A.

    YHOO – not selling over rumors is what killed me last month. If they start to run, I’ll take 1/5 off and if they keep going I’ll take 1/4 off and if they keep going I’ll take 1/3 off… Meanwhile they have a $1.40 premium and I’m sure not going to pay it!

    SHLD – if it breaks $175 I’d sell the $180s and I’d look to get whatever the $180s are fetching now for the $185s as my goal.

  92. BillBigD,

    EDU – I’ve been watching this on and off. It does look like it might breakout again. What’s your play? I’m thinking maybe Jul50s. Earnings right around July expiration, based on last quarter’s report date.

  93. happy,

    PTR – congrats to you. Mine stopped out Friday for a much smaller gain.
    FSLR – stopped out this morning, but still with a decent gain, despite sold caller (took out last week).
    BIDU – I’m completely out, perhaps a bit early, but no complaints ($18+ per contract gain on effective basis)

  94. IGW: it was obviously a technical glitch and has corrected it self

  95. KC
    Super play on BIDU! I got out WAY to early.
    EDU- I am slowly getting in bought just 2 Oct 50′s.
    BRCD- Option Scandal will be talked about right now. I am very interested in what they have to say!

  96. NOVC up 10% in the last hour don’t see any news has a drug on Phase 3

  97. Erin looks nice. Any play on that?

  98. Bought a few UA July $45 Calls, based simply on it touching and testing it’s long term uptrend support line.

    Phil, do I recall that you like TINY? Do you buy shares or options on TINY. I put an order in for 200 shares entry position at $11.41, not fiilled yet. Do you think this is a good time to buy?


  99. Phil,

    VICL, a bio-stock I’ve been holding with a loss, has just reached a breakeven point for me today based on great news. (I know I should have sold a long time ago, but I entered this as a speculative play and held when I probably should have sold a long time ago.)

    Should I sell half or see where this thing goes? I’m glad it’s finally doing something really great for now.

  100. Phil: SNDK- I sold July $45s @ 1.50 (now 3.20) and considering rolling up to
    July 47.50s(1.65) or Aug $47.50s(2.90)? Also to roll Jan 45s to Jan 47.50(net$1400)
    I also have Jan $40 puts @basis 2.30-now 1.90. I love this condo/rent theory, but my
    timing is off. Thanks for all your patience.

  101. BillBigD,

    BIDU – Thanks. Love that stock, but think it maybe time for a correction. Now if all my other trades were like this … LOL
    EDU – I was looking at a short term play. Sounds to me you like them for a longer play. Frankly I’m better at longer term plays than mo. trades, but I don’t feel I know enough about them to establish a long term position. I should really do my due diligence on them.

  102. IGW – rather than exit the trade, I’d try to guess a good top and sell the $65s, which carry a $1 premium but that’s a tricky play. If you are just looking to get out, ask a lot and see what happens but when WFR falls, the SOX get me worried.

    Transports are getting killed by $69 oil.

    AAPL $130 2010: Well if I were going to make that kind of commitment to Apple being at $160 by 2010 then I’d be happy to get $3.25 for the current $130s.

    BIDU still going up! GOOG not following.

    ICE tanking, not asking why as I suspect so grabbing the $150 puts for $5.35 just in case as a mo play with a .50 tstop. XXX

  103. KC
    Interesting! You think differently. Since I don’t know them I go further out. If I know the stock will go July or August.

  104. VICL – They have Robert Merton (derivatives guy) on their board. He shared the economics nobel prize with Black and Scholes :-)

  105. BIDU
    is amazing today; just keeps going!! I hope lots of people are reading my SeekingAlpha article today and come to Wang’s World!

  106. Oops – Fischer Black passed away before the Nobel was awarded.

  107. GOOG
    even better when GOOG starts to run again!!

    PCLN and CTRP have been jumping; EXPE has some catching-up to do!

  109. OIH
    getting things going again!

  110. GS
    is turning!

  111. GRMN- nice comeback!

  112. BillBigD,

    Your approach of going out in time with a play is certainly valid. I’m just trying to increase my probability of a good trade by doing the due diligence. Plus I’m trying to pare down the number of positions to a more manageable number so I’m being extra selective now.
    EDU – looks like volume picking up

  113. My remaining Apples:

    20 OCT 115.00 AAPL PUT (QAAVC) $16,410 now $11,600
    10 JAN 120.00 AAPL CALL (VAAAD) $12,610 now $28,700
    10 OCT 115.00 AAPL CALL (QAAJC) $7,690 now $16,900
    Sold 10 JUL 120.00 AAPL CALL (QAAGD) $8,000 now $940
    30 OCT 125.00 AAPL CALL (APVJE) $7,210 now $34,500


    TINY – I like to buy it around $11 and sell it around $13-14. Whenever some nano company does something they shoot up but then they calm down but the basket they hold is very solid and I have no fear owning them through the dips. Right now I have the Dec $15s on accumulate at .20 with the goal of getting 1/2 out with a double and just seeing if I get lucky on the rest. They are very thinly traded so there’s really little point in selling calls unless it’s near $12.50 and you just want to grab the premium.

    GOOG having mucho trouble at $515 still.

    VICL – interim results are years away from profits (ask DNDN) and you should either “Always sell into the initial excitement” or (since no one seems to follow this rule anyway “when in doubt sell half. In this case selling 1/2 would be selling July $5s for .95 against 1/2 your positions to protect half of the $1 gain you got today in case it’s all gone tomorrow. If it shoots up on you, you still get 50% of the maximum profits and you can probably roll your caller vs it going down and you being back in the red because you didn’t follow rule #1 or rule #2.

    SNDK – still .80 premium in the $45s, no emergency to roll it as they should gain about even to the $47.50s and look at all the protection you give up. If you are rolling yourself up at the same time, that’s different as you don’t need the protect and then you just want to max out premium. There is no way I would sell an Aug $45 for $4.20 when I can get $3.05 for the July $45s but the Aug $47.50s are fair at $2.83 but you do sacrifice some flexibility.

  114. EDU- just jumped 60 cents. JUST for GRINS.
    NOV- Also came back from down 2 and change.

  115. ICE – I hope they make a ridiculous offer!

    I’m trying to pare my positions down too but they are mainly working so I have trouble letting go!

  116. Positions – While we all aspire to be like you, we can’t all be like you, at least not yet. ;-)

  117. GS – happy, I hope you’re right and they continue on, so I can get out even (my calculations were off last week). Maybe MS will give GS a lift if they do well later this week.

  118. GS
    KC, if they get above 228, it’ll get interesting!

  119. YHOO – on the move

  120. XAL ($49) has 8,551 $55 puts and less than 300 calls in all categories….

  121. PBR-workers might strike

  122. Phil,

    YHOO takeover rumour from CNBC .. how about aug 30 @ 1.2 and selling Julys @ .9 ?

  123. BBD-
    I hope it doesn’t disrupt the distrubtion of the Pabst Blue Ribbon.

  124. BIDU screaming “Buy! Do!”

  125. VICL – Thanks Phil, I’m going with selling 1/2….

  126. YHOO is heavy on the rumor mill today, be careful reading into it.

    BBY – sold $50s for .80 – seems silly not to… (against leaps).

  127. BIDU
    Happy 150!!!

  128. DRAZ-very clever
    Gotta love China today!
    BIDU, EDU, CTRP, FXI, and the china dolls LFC, CHL

  129. HAPPY,
    Just got the Wang World email. You are now GURU STATUS on ALPHA. ADDING my suggestion MA, and everyone will want to sign up. CONGRATS my friend

  130. YHOO – that’s a good play if you can get those prices but I don’t see them.

  131. EOG finally falling down (my disagreement with Z as to what record gas shorts means).

  132. BBD, Thanks! Most of your picks are great!! I’m glad that I got out that “High Flyers!!” article this weekend!

  133. LOL – Eric Bolling says not only are high oil prices not a problem but they do, in fact, add a supportive “tailwind” to the market. Holy cow, that’s newspeak right out of the Big Brother playbook!

    Very dull day on the whole, not telling us anything. I hope the whole week isn’t like this…

  134. AAPL
    approaching 125

    going above 515

    approaching 165

    starting to go up

    The big boys want to close SPX green!!

  135. PHIL,
    YOU call this dull?
    AAPL up 4
    RIMM up 3
    MA up 6
    Bidu up 7
    Goog up 9
    OIL up $1
    I want more dull days please!!! LOL

  136. CCJ – now I’m concerned!

  137. MO collapsing into close.

  138. Dull = no market direction. I am learning nothing watching these moves. Hot stocks are getting bids (you forgot GRMN) but there’s a broaders sell-off that indicates commodities are straining the rest. This market performance on the heels of a 500-point China gain indicates that money boys no longer see Asia as relevant to our situation. That’s not nec. good news but not bad either – just a blah day to me (and my portfolio is still gererally neutral.)

  139. YHOO – I had the original 10K play on this one having purchased 5 Oct 30′s @ 2.30 and sold 4 Jul 27.50′s @ 2.35. Friday I took out my callers @ 1.35 to sit naked as I was hounded by not having taken out my UNP caller recently when I was up on him 60% and then I got crushed to be down like -150%. This morning I bracketed my Oct 30′s down to 27.50 for 1.00. I just sold 5 Jul 30′s against @ 0.80, willing to get a bit more premium paid off and not trusting this recent jump…

  140. MO – figures! That one I got rid of…

  141. Good timing corey! I take it you’re a little ahead?

  142. PHIL,
    Just playing with ya!

  143. Well that was exciting!

    Anyway, off to a meeting – later all!

  144. Phil--

    Thinking that the JSDA guy is gonna pump up his pop (or pop up his pop) on Fast Money, I bought some Aug JSDA 17.50s. Should I try to sell the July 17.50s now or wait till tomorrow…or maybe even sell the 15s now?

  145. Markets
    Metals, overall, were weak today (explains CCJ?). Biotechs were weak also. But, they nicely allowed the major indices to vent and create more room (on the intraday charts) to go up without giving up any altitudes. I think we will likely see new highs this week. We need to see the metals and biotechs participate, though!

  146. happy,

    Congrats on Guru status (haven’t seen it, but I’ll take BillBigD’s word on this).

  147. KC
    EDU- you jump in?
    Off to get a haircut, all have a goodnight.

  148. Guru Status
    Is there really such a thing? I think BBD made it up!

  149. Jerry Yang in as CEO; Semel out of YHOO

  150. Semel resigns from YHOO but will remain as “non-executive” chairmen. Shares up at 29.75 now AH, close to 9% total on the day.

  151. Phase I of the AAPL accumulation program went well today, used low liquidity to accumulate early and sold some dogs at 20% loss along with the china girls at nice gains to increase liquidity for Phase II.

    Phase II of the AAPL accumulation program begins tomorrow (accumulations only allowed on dips, “I WILL NOT CHASE!” (trust me that has been a very difficult concept for me to practice especially in the past, still a little now and then too). Branching into the Aug 125′s and 130′s in order to add a little extra mileage to the liquidity.

    WFR did not follow the plan. Was banking on 25% sell at breakeven to increase liquidity. Didn’t sell due to loss aversion. May end up being a major strategy error if WFR continues to decline in the short term and the opportunity cost then exponentiates resulting in less AAPL holdings.

  152. YHOO – Well, looks like I sold those calls a bit too soon. LOL.

  153. karmcon: what month AAPL are you buying? are you planning to sell after the IPhone is goes on sale?

  154. MS – heard they will spin off Discover card business on june 30. I bought July calls on MS today (june 18th). I wonder what will happen to them on june 30th. Given the Mastercard jump is it a good play for discover card portion alone ??

    “The distribution of all of the outstanding shares of Discover common stock will be made on June 30, 2007 to Morgan Stanley stockholders of record as of the close of business on June 18, 2007. Morgan Stanley will distribute one share of Discover common stock for every two shares of Morgan Stanley common stock outstanding on the record date.”

    Any comments and explanations appreciated. Thanks

  155. CSCO — I noticed this weekend that CSCO options IV and HV are inverted, with IV near year-long lows.

    Is it time for a vega position here, like a straddle or strangle ? I dont like that csco doesnt move much, but if the market pulled back looks like you could make at least 5-6 points of IV.

    Pie in the sky ?

    I guess since csco doesnt move much you are exposing yourself to theta — if you could sell against each side of the spread … but taht would also mitigate vega… hmmm… Just say no ?

    Any thoughts ?

  156. CSCO – Just looking at the chart I’d say no. I haven’t been watching the numbers, but I generally avoid getting into a straddle or strangle unless I’ve seen the share price stay put for awhile and the bollinger bands start to close in, kind of a visual sign (to me at least) that it might be worth looking at. CROX in December of last year is an example of what I look for (and this was the last time I did a straddle or strangle). I took a strangle there and it paid off well in Jan.

  157. Greg,

    Up until today when the new AUG contracts originated, I was weighted heavily in the JUL 120′s and 125′s (about 35-65% respectively). Have a token JUL 95 and sold some OCT 80 P’s against some JAN 08 140 P’s prior to being placed on double secret probation by OpEx. I did convince them to allow me to keep the Oct P’s under the then existing margin I had under the conditions I would have at least dbl the amount of contracts in the money in months later than Oct., which I do. I would buy back the Oct P’s now, but believe it or not they have barely moved in price due to little to No volume. I may be overly optimistic, but I gotta think those will expire worthless unless a major incident in the Co. (such as Jobs having a heart attack and dying), or failure of the Iphone to be functional, occurs.

    Am planning on acquiring Aug 125′s and 130′s starting tomorrow. Plan as of now is to liquidate 25-75% of the Jul and Aug holdings 1-2 days before 6-29.

    6-29-07 just happens to be the last day of AAPL’s 3rd qtr. Smart planning by the beancounters so that a full qtr is available to receive cash and recognize income for the new product. Although net revenue from Ifone sales will be deferred for 24 months (due to the forecasted free upgrades, software patches and enhancements projected over the life of the product), the cellular service contract customers will need to purchase exclusively from AT&T provides for AAPL to receive $5-$10 PER MONTH from AT&T for each customer who signed a 2 year Ifone cellular service agreement. (Notice 24 months or 2 years is constantly the terms used? Coincidence? I think not, but am a cynic at times.) Quick math time…..Jobs expects 10 million Ifones sold during qtr 4 of 2007 and fiscal year 2008 combined. Most other estimates are at a minimum 20 – 30 million. Assume Jobs is right, but the 10 Million customers occur immediately and don’t change over the 15 month period (I know its not real world but it makes the math easier so go with it for this example). The AT&T agreement would result in additional revenue of 50-100M per month X 15 months for a total of $750M – $1.5 Billion in basically $0 cost of sales revenue. No wonder they didn’t fight deferring the direct Ifone sales revenue! The AT&T agreement is also why AAPL can’t find a European cellular provider right now. Literally all the cell providers have said, “Thanks, but no Thanks” unless the similar monthly payment to AAPL that AT&T has agreed to is greatly reduced or deleted from any contract negotiations. That could be a major issue down the road but the current estimates of Ifone sales of 10-30 million includes NO European sales!

    Holy digression! Buying predominately JUL 120 – 125′s and Aug 125 – 130′s in the nude. Selling 25-75% of the total holdings on Jun 27 or 28 and will be researching customer and techno-guru’s opinions/reviews that weekend to help make my decision to sell or possibly buy additional contracts on the following Monday. Reviews will be quick as testing organizations like Consumer Reports will be testing the touch screen 24 hours a day as an example of a normal user’s 1 year “touching” of the screen. Is it foolish to be so uncovered with my AAPL strategy? Possibly, and time will provide the answer, but to me it appears both the investment and non-investment communities are stampeding towards the retail outlets for this product. Although I won’t be joining the stampede per se, I won’t mind cleaning up the stampedes financial excrement it will leave in it’s dust. :wink:

  158. BillBigD,

    EDU – no, I made an offer for the Jul50s and decided not to chase. Plus I’ve been trying to fix a CROX Jul position which hasn’t been behaving as expected (LOL) post split, and moping over selling BIDU too soon (LOL). If I can get my homework done on them, maybe there’ll still be a chance in the next couple days.

  159. KC,

    Those are the problems I have noted with the Chinese ADR’s (CHL, FMCN, NCTY, MR, LFC, SNP, STP, CTRP, ACH and EDU are the ones I have either purchased in the past or have attempted to purchase and are first in line on my watchlist), is that they all have low volume and a large spread resulting in the baiting of the impatient to chase. I know from experience, and have gotten both fortunate and steamrolled in the past as a result. IMO, all of the above are excellent Co’s in the long term so YOU must be patient because the seller’s sure are. Sooner or later the Chinese market will dip allowing you to BUY and with almost certainty the prices meet and exceed the price before the downturn rather quickly. Have had particular success with CHL, LFC, SNP and NCTY. Also with ACH stock because no options are available. btw, watch NCTY for dip to low 40′s as it is (imo) going to explode in late ’07 – early ’08 due to new game release and partnering with Elec Arts. GL

  160. Batesum,

    I presume you did not sell those EEP Jul 55′s? Hope you ended up buying though. It appeared most of the CA Energy trusts and MLP Energy holdings went up today (prob due to the increase in the price of a barrel of oil).

  161. RYURX:
    Phil last time i watched this fund was when the markets had a slight collapse due to china and it was around 7.35 that time. I saw it as a reasonable alternative to overheated markets. Now it has exploded to 35+ Can you give some information around this fund. I know what it stands for but the rise is just out of this world!

  162. Corey: Thanks !

  163. karm,
    no it moved too fast but had my eye on the trade…nice upgrade came out early saying it was undervalued…on a different note i was lucky enuff to sell my YHOO covers, so I will call it a draw…the play I really missed was APKT 12.50 calls, my Junes expired worthless and I never got a chance to refill

  164. karmcon,

    Chinese ADRs – Thanks for sharing your insights. Other than BIDU, and a very brief CHL holding, I don’t have experience with them. I have learned, sometimes painfully, that chasing a train that’s left generally results in a less than stellar outcome later. I’m getting better at exercising restraint but I still have some weak moments. NCTY and MR are a couple others that are on my list to do my homework on. CMED is another one, but apparently their earnings disappointed.

    AAPL – If I’m reading your post correctly, you’re trying to capitalize on the hype/IV build-up prior to the iPhone launch? If so, aren’t you planning on selling options against your long positions? Perhaps your “double secret probation” prohibits you from doing this (I also trade with OXPS; other than the commission fees, I have no complaints about them). As I’ve mentioned before to BillBigD, I tend to select longer term plays (i.e. buy leaps and sell against) which have worked well for me (thanks to Phil). I have just re-positioned myself in case there is a big pullback after the iPhone release by doubling the puts I now hold. I am waiting for the excitement to build (i.e. I think price might get to 126-127 range) before selling Jul calls for max. downside protection on my leaps. I’ve already sold puts against my mine which I plan to buy back around the time I sell calls. Maybe it’s a bit simplistic but that’s my game plan right now.

  165. Wang’s World
    new post up!!

  166. KC

    AAPL closed at 125 today… estimating the stampede could cause the stock price to exceed $131 with 8 trading days remaining before Jun 29. Received one survey that had 77% of the population voting they were NOT going to buy an Ifone and the author concluded this was indicative of how POPULAR the Ifone already is before its release!! I am not saying it makes sense but I will ride the wave of hyped hysteria on this one.

  167. ICE

    “ICE acquires license for Russell Index Futures”..
    ICE CEO stating ” we don’t see reason to bid against ourselves

    ICE should get a big boost tomorrow

  168. MRVL, Shareholders should sue the Board, and the Board should fire the CFO and current auditors… the Board could rationalize and/or condone the continued noncompliance of pertinent SEC filings due to an unreasonably lengthy and incomplete option issues is beyond me. It reeks of breach of fiduciary duty, negligence and potential fraud…..knew I should have dumped those Aug 17.5′s when I had the chance and the hint of this coming to a head last week! Here is the lame PR:

    Santa Clara, California (June 18, 2007) — Marvell Technology Group Ltd. (Nasdaq: MRVL) today announced that it has received a notice from the NASDAQ Stock Market dated June 11,2007 stating that the Company is not in compliance with NASDAQ’s Marketplace Rule 4310(c)(14) because the Company has not timely filed its Quarterly Report on Form 10-Q for the fiscal quarter ended April 28, 2007 and, therefore, its common stock continues to be subject to delisting from The Nasdaq Global Select Market. Marvell received similar notices on March 30, 2007, December 8, 2006, and September 8, 2006 (HELLO? DO YOU THINK THE IDEA IS TO SEE HOW MANY OF THESES NOTICES YOU CAN COLLECT??? SOMEONE MUST THINK THEY ARE LIKE POKEMON CARDS!) due to the delay in filing its Form 10-K for the fiscal year ended January 27, 2007 and its Forms 10-Q for the fiscal quarters ended October 28, 2006 and July 29, 2006. As previously disclosed, a special committee of the Company’s Board of Directors has conducted an internal review relating to the Company’s historical stock option practices and related accounting matters. The Company is working diligently (MUST HAVE A DIFFERENT DEFINITION OF DILIGENTLY THAN WEBSTERS!!!) to complete the restatement of its historical financial statements and file its delayed Forms 10-Q and Form 10-K as soon as practicable.

    Any Company’s upper management, accounting department and BOD that has allowed this to occur is indicative of a misguided, unfocused and non strategic entity that makes me question their entire manufacturing and vision of its products. Want to wager they haven’t filed income tax returns also? I’m out before they fold and/or get put out. :evil:

    On May 25, 2007, the NASDAQ Listing and Hearing Review Council issued a decision staying any delisting action and granting an extension to June 26, 2007 for Marvell to file its Form 10-K for the fiscal year ended January 27, 2007 and its Forms 10-Q for the fiscal quarters ended October 28, 2006 and July 29, 2006. Marvell intends to make an additional submission to the Listing Council regarding its plans to file the Form 10-Q for the fiscal quarter ended April 28, 2007. There can be no assurance that the outcome of the Listing Council’s review will be favorable to Marvell or that Marvell will remain listed on The Nasdaq Global Select Market.

  169. Karm,
    ATML and FDRY were in the same boat and nothing happened to them. i wouldn’t get too worried about this if i were you. in fact, MRVL started really moving when this announcement came out for ATML.