Big Internet sector upgrade, let’s see if its a scam to help people out – the theme of the week has been push the horsemen while the big boys sell. Just a coincidence I’m sure!
BX – the time to buy them is when they have a bad Q and drop off once they establish themselves. I can’t wait for the PSW IPO, I hope I’m not as old as Schwarzman when it happens! It is sooooo overprices, you would be mad to buy it other than a pure gamble.
Best move at the moment is to have fingers on the trigger of DIA $135s at $1 in case BX rallies the Dow, I’m taking a bunch but will sell at .90 very quickly. XXX
Rebalancing – non event usually but with 2000 stocks there’s always something exciting that happens.
GOOG exploding, taking out callers and my put, will restablish later. XXX
Which months of OIH? Right now I’m very happy with the selling the naked $180 call for $5.20 but its a very high-margin play where I would flip them to 2x $185s and another 2x $190s if it keeps breaking levels on me but it’s a nice payoff if we ever get a pullback. You can play the Aug $185s for $5.70 and sell the July $175s for $8.40, also risky but more manageable margin-wise or the spread of the Aug/July $175 put is just $2 so you’d only be hoping it doesn’t drop too fast.
Covering GOOG if it breaks below $521, very happy to gain ground on my callers. Will now sell $520 calls at no less than $16 ($1 trailing stop) getting $8K back rather than $9,500 I got from the $510s but I feel like the $10 of headroom is worth it. Restablishing my puts at $500 for $3,200, much less than my original $490s cost. XXX as part of yesterday’s condor.
FWLT – see if they hold $103 here (I don’t think so) but I’m a lot less nervous about covering FWLT than I was yesterday, when the Dow was inexplicably climbing.
IPO – Oh, if I could have gotten $31 BX I would have been all over it but you had to promise your first-born, cut off one finger and promise to buy the next dreck your broker has to dump – not my cup of tea. Also, these guys do deals for a living, I sincerely doubt they would have given up more than 15% of what there felt the true value was in the IPO pricing so $37 is already pushing it for this one. Really, would you invest in an investment group that didn’t know how to price their own IPO?
OIH – How bout July 175 callers for 8 and buying aug 180’s for 7.80
OIH – well you’ll be paying $4.30 for the $180s, which are $5.45 in July and, if it goes down $5 he’ll close at 0 and you should get about the $3.05 that the $185s are fetching so XXX on that play DDay!
Wow the LTP hit the jackpot on this one! VIX is up and poor callers getting killed. Don’t forget that your leaps will suffer when things calm down so just worry about managing the short end of your play BUT, sometimes you get a really good deal on a roll as the closer to the money call below you loses value faster than you so look for opportunities there as well.
I’m eyeing DIA July $135s as protective calls at this point, currently $1.67 so we’ll have to watch those but that means I fully expect to lose .40 on them over the weekend if the Dow drops another 100 so that is my insurance expense.
Don’t forget to ladder your DIA puts, you shouldn’t have more than 2 levels open into the weekend!
No sense shorting oil into the weekend after this gift, looking to get out – miles of room to drop if it really starts to fall apart so half out for sure and we’ll see about the rest. XXX
In on the DIA calls, out on all but DIA $135 puts (200) looking to see if DIA can break back over 134.50 XXX
DIA – if we don’t get back to 13,450 by the close of the NYMEX we are sunk.
Bye Cappy!
GOOG – boosting Sept $510s slightly to cover potential catastrophe if they jump $20 over the weekend on me is my solution but not going to get sucked into the in and out thing.
(note, I ended up DD on the Sept $550s instead as I didn’t realize how much money I had made on the $510s and there was no way I was paying $38 for more!).
SIRI needs to close above $3 to create July options (maybe Aug too) so there’s bound to be some people very determined to make that happen before the market tanks.
90% of the S&P is down right now. If you see a green stock, it’s very possibly strong or already at a bottom.
Good gosh they are still talking about Blackstone!
RUT Aug $840s are $24.25 and you can sell the July $830s for $19.90 and the July $840s are $14.50 so you seem to have a pretty good margin for error. XXX
RUT – to be clear I am playing that for the bounce so not wanting to sell Julys right away (but by $17.50 for sure). My theory is that Russell rebalancing means money is coming out during the day and may pour back in EOD (plus, mathwise it’s a good spread).
Oil selling off, if it turns red at close then OIH and VLO make good downside mo plays again.
So I see that some of you guys are like those people who go to a tag sale (where they take an additional 10% of each hour on whatever’s left) and just have to buy the first things you see that are marked down just 10%, even though waiting can’t possibly cost you more than 10% but may save you 40%…
Spoke too soon on oil, pumpers jumped all over it into the close. Insane levels of greed there, they are going to truly collapse the market and cause a recession which will wreck the price of all, just so they could squeeze that last quarter a gallon out of everyone over the summer. Actions like this indicate that THEY are convinced it’s over so they are going to rape us hard and fast while they can because they know it’s not going to last.
M – takeover speculation. I doubt it but, just in case you might want to bite the bullet and roll up to Aug $42.50 to pick up $2.30 of pure premium.
T – I was pondering that one and, since I need upside plays I will buy more if I can get them for .50 but they seem to be .60 and not worth the additional risk over the weekend.
XOM puts – no, I made plenty on the leaps and have lighened up better than even so I’m going to let this ride and be happy to build up my position agains (in the ‘09 $80 puts) if they want to make it cheaper for me.
CNBC pushing really hard to build up excitement about the Russell.
DIA puts – when you are looking for protection, try to pick whatever near-the-money contract has the best risk/reward profile so you have July DIA puts as follows:
131 – $1.08
132 – $1.33
133 – $1.60
134 – $1.95
135 – $2.40
So, out of that group, the more expensive $134s can be expected to gain .45 on the way up and lose .35 on the way down vs. the $132s that lose .25 on the way down and gain .27 on the way up. So it is much better to buy the $134s than the $132s.
Mattress – QQQQ is most stretched at the moment. Retest of 2,525 is possible if we keep going down so that’s about a $1.50 move in the Qs. $1.50 down would be a double on the July $47 puts at .69 so XXX there (and you can sell June 30ths if things get hairy).
