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Freaky Friday

Which way will we go???

I was just laying out my DIA puts and calls and my QQQQ calls in member chat and I realize that those positions clearly indicate that l have absolutely no idea what's going on.

As I expected last night. the GDP data gave us a nice Goldilocks set of numbers but the PCE including food and energy, which the Government likes to ignore, was up 4.3% for the quarter, up from 3.5% in Q1.  The "core" PCE is up just 1.4% for all you non-eating, non-energy using citizens so let's all party like we are Amish people on a hunger strike!

I can kid about the Amish because they'll never read an electronic document but, for the rest of us, I still urge caution, caution and more caution as the DIA calls and QQQQ calls we took were UPSIDE PROTECTION, meaning they are there to protect our terrific gains on the put side.  We could make money on both ends of this trade today as we wait for some Federally funded BS to hit the markets from Paulson, Bush (oh no but, yes, he's speaking!), Bernanke et al who'd better say something positive before we start making Asian-style declines.

The Hang Seng missed my down 1,000 target by 222 points and recovered 127 into the close so kudos to them for making it back over 22,500.  The Nikkei dropped 418 points, also with a 100 point gain at the last minute so I'm taking all of Asia with a grain of salt this morningNTT's profits dropped 25% as they experienced the kind of cost inflation that our government doesn't believe in.

Europe is off about a point ahead of our open and has been gathering strength in their afternoon, so we will watch that finish with great interest but it will take a lot for us to jump back in and BUYBUYBUY.  We certainly have the cash on the side ready to do it but we're going to need clear tech leadership, not energy leadership, to even consider jumping back into this very chilly pool:

 

We actually played OIH to the plus side yesterday.  Happy Trading says they still have room to run and we do not argue with Wang's World, as he's only been wrong about once this whole month!

Another guy that's been dead on the money is ZMan and he's got positive calls on HAL and VLO this morning and no new puts, pretty much in line with our much lighter position on the downside of oil as we had our fun yesterday and there is NO need to be greedy (remember how hard it was to get here?).

The dollar already pulled back off Paulson's pump while gold is expected to retest the dreaded $666 mark this morning.  Dollar down and gold up = bad economy as will rising rates in a down market so there's lot's to look out for today was we head into the weekend very much in cash!

Have a good one,

- Phil

 


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  1. What did I miss on IMB?? UP 1.42 ? Trust me, not complaining in the least


  2. G’morning all


  3. Last night at happy hour I started talking to a guy who, it turns out, works in the sub-prime division of one of the investment banks. We started talking about how rough the market was with the homebuilders (BZH, etc.) getting destroyed along with GS, BSC and friends. He started telling me about how the required credit scores for 95% financing have ratcheted up from mid-500′s some years ago to 680 in the last week or two. He also mentioned he isn’t seeing a lot of product to repackage and sell. It sounded effectively like there is no “sub-prime” mortgage since 680 is essentially a perfect credit score. Granted, he only works for one place but it makes me wonder about the rest of the places.


  4. Anyone else use Scottrades streaming quotes. Some sick bastard didn’t reset it, so right now it is showing -310 on the dow, -51 on the NAS, -36 on the SPX.


  5. Whats up with CX today. Am I seeing this right – up over 100%?

    Greg


  6. GDP – U.S. second-quarter GDP rises 3.4%
    Fastest pace since first quarter of 2006; consumer spending slows

    WASHINGTON (MarketWatch) — After hitting a pothole in the first quarter, the U.S. economy rebounded in the second quarter, growing at an annual rate of 3.4%, the fastest pace since the first quarter of 2006, the Commerce Department said Friday.
    The increase in real gross domestic product was slightly below market expectations for a gain of 3.6%, according to a survey of economists conducted by MarketWatch. See Economic Calendar.
    GDP rose just 0.6% in the first quarter.
    Economists said the weakness in the first quarter and the subsequent strength in the second quarter are both overstated, and the best way to understand the economy was to average the growth rate over the past six months. This produces a 2.0% average growth rate in the first half of the year.
    Some economists have concerns that the second half of the year will be slow as consumers are tired and under pressure from the weak housing sector. But other economists believe these fears are overblown.
    The improvement in the second quarter was concentrated in a stronger trade performance, faster government spending and a rebuilding of inventories after significant reductions in the past two quarters. Business investment was strong and spending on structures was at the fastest pace in 13 years. These offset a sharp slowdown in consumer spending. Read full government report.
    Consumer spending increased 1.3% in the second quarter after a 3.7% gain in the first.
    The inflation picture was mixed. The core consumer price index (excluding food and energy) retreated to a 1.4% annual rate in the second quarter from 2.4% in the first, pushing the year-over-year gain down to 2.0%, the top of the Fed’s perceived “comfort zone” on inflation.
    But headline inflation accelerated to a 4.3% annual rate, the fastest pace since the fourth quarter of 1990.
    Real disposable income fell 0.8% annualized in the second quarter, after rising 5.9% in the first quarter. The savings rate was 0.6% in the second quarter, down from 1.1% in the first.
    Details
    Imports, which are a subtraction from the calculation of GDP, fell 2.6% in the second quarter, while exports rose 6.4%. The trade deficit added 1.2 percentage points to growth.
    Government spending increased 4.2% after falling 0.5% in the first quarter. Federal spending rose 6.7%. Defense spending rose 9.5% in the second quarter and nondefense spending rose 1.3%. State and local government spending rose 2.9%. Government spending contributed 0.8 percentage points to growth.
    Businesses added $3.6 billion to their inventories after adding only $100 million in the first quarter. The change in inventories added 0.15 percentage points to growth.
    Final sales to domestic purchasers, GDP less the change in private inventories, increased 3.2% in the second quarter, compared with a 1.3% increase in the first quarter.
    Residential investment fell 9.3% in the second quarter, the smallest decline since the first quarter of 2006. Investment in residences subtracted 0.49 percentage points from second quarter growth, compared with 0.93 percentage points from first quarter growth.
    Business investment increased 2.2% in the second quarter after falling 4.4% in the first. It was the first increase in the past five quarters. Business investment contributed 0.83 percentage points to growth.
    Investments in equipment and software increased 2.3% after a 0.3% gain in the first quarter. It was the fastest growth in equipment and software investment since the third quarter of last year. Investments in structures jumped 22.1%, the fastest pace since the second quarter of 1994.
    Greg Robb is a senior reporter for MarketWatch in Washington.

    http://www.marketwatch.com/news/story/us-second-quarter-gdp-rises-34/story.aspx?guid=%7B12F1D9EB%2DD4C6%2D427B%2D8300%2DCEA0AD066C38%7D


  7. Oppps that was yesterday. Nevermind.

    Greg


  8. CROX – I don’t think yuou guys get the fact that we only spent .05 on this play so we have a ton of options. If we had the margin for it the proper move would be to take a couple of Septs off the table into the initial excitement (the naked play is gone already) then wait for the same thing that happened ot AMZN and BIDU to happen to our boy but, in the case of the $10KP the best move is to roll the Sept $52.50s to 2X $57.50s and roll the caller from the Aug $50s at $8 to the 2X the $55s at $4.35 XXX


  9. My Etrade chart is screwy, showx CX traded at $89 yesterday up from the $30s range, where it is back today. Anyone else’s daily chart of CX have that too?

    Greg


  10. morning all, ^VIX 20.69


  11. CX down .23 at 32.70


  12. IMB – missed your chance to get out even already! Maybe a flush on the way down… 8-(

    In general – remember what I said yesterday about trading curbs leaving a lot of sell orders backed up at the brokerages. If we don’t get off to a good start then those orders will be reupped today so we let the DIA and Q calls die and don’t take the puts off the table until we break positive. Until we get back to 13,600 nothing we see will be more than a minor bounce.

    CVX is going down on those earnings so what does that tell you?

    This time I’m not going to miss shorting Google against 1/2 my longs, probably the $510s, possibly the $500s as a mo play down. XXX


  13. GDP – look forward to your insights, Phil


  14. GDP – sorry, I overlooked the first part of your morning post.


  15. NOV- took half off from yesterday’s buy at $121 $1.1 gain
    VSEA-took it off from yesterday, $1.15 gain
    CVX- didn’t have!
    CROX- not working like I hoped LOL


  16. Phil

    You are going short into the WH Pump extravaganza, don’t you have faith in the ministry of truth


  17. Emergency White House “Economic Summit” will attempt to spin the GDP and the economy this morning so watch those puts in case we have to dump them.


  18. Phil,
    General question on rolling the option. You say,
    in the case of the $10KP the best move is to roll the Sept $52.50s to 2X $57.50s and roll the caller from the Aug $50s at $8 to the 2X the $55s at $4.35 XXX

    What is the logic behind on rolling to Aug 55 (in the money) instead of to Aug 60 (out of money)?
    If at expiration date, CROX is over 55, what should we do?


  19. ICE- not melting!


  20. Zman: Are you adding to your HAL play from yesterday?


  21. ICE

    Up big since 3:00 PM yesterday. Any news?


  22. CROX- .6 gain on dip


  23. ICE, NMX finally seeing some light.

    Phil, you are right I think there are a lot of orders left from yesterday.

    XOM cool another buck down. Lots and lots of room to fall on these oil stocks.


  24. That’s Minitru to you Lithium, you’d better learn the Newspeak if you want to fit in!

    They have Bush pre-taped so he doesn’t mess up…

    He’s saying that our crappy currency leads to more exports, which is good because now we are like India to the rest of the world and can export cheap labor


  25. DECK- up 9 $$$$ wish I had bought yesterday instead of Thursday


  26. Doubleplus OK Chief


  27. Rolling logic – only the assumed margin restriction of a $10KP. If CROX takes off, that will be our next roll, rolling the caller up to 2x the $60 calls, which right now are $2.55 of pure premium and already outgaining the $55s.

    VLO – great call Z! They are already turning off the downgrade. I grabbed the Aug $70s at $3.90 as it’s always good to have upside protection anyway. XXX


  28. BBD –

    oil 75.46 +.51 -


  29. BBD -

    Wasn’t yesterday Thursday in Cali?

    (Actually, I guess it was Jueves.)


  30. NTGR- will take a look over the weekend, have made money 5 or 6 times on this guy


  31. Re-bought TASR jan 09 15′s


  32. DRAZ- you are right Thursday was yesterday and Salsa night here so you understand my slow brain today. I meant to say I wish I had bought DECK yesterday.


  33. The pending summit is holding up the markets but I’m very, very glad to have worked into what is effectively a Dow strangle. If we start to take off I will DD on my QQQQ $49s, now .86

    Totally ignore the BS price of oil, watch SU to see if crude is going up. They couldn’t possibly be in a better postion with record high oil and very low nat gas (they use it to power their process). If they can’t do well now the whole sector is doomed. CVX too, how can they not be positive?

    SLB doing well. HAL also doing well so I will grab the $35s there at $2.15 as it’s a low premium mo play xxx


  34. XOM – those Sept $95s are just .95 XXX

    I know – oil calls – can you believe it?!?


  35. Hey, anyone going to check out the CNBC interview with Paulson, and the other three administration economy guys? I think I heard 1030.

    Jazz


  36. 1/2 out of puts, will DD on whichever layer we stop at that’s nearest the money. XXX


  37. Oops, Ratigan’s interview with Paulson et al was 0945. Anyone hear it?

    Jazz


  38. XOM current $90s are fairly priced at $1 too! XXX (this assumes you have puts).


  39. DO- In Aug and Sept


  40. Here we go folks! Paulson says BUYBUYBUY!!!


  41. XOM

    I have the 95′s from yesterday at a buck plus a plethera of OIH calls.


  42. QQQQ Calls and DIA Puts at the same time? – Phil, what’s the expectation here? The way I see it, your losses on one side will just offset your gains on the other? What’s the point of doing both? Or is it just starting in both until you see the clear trend and then dumping the losing trend side?


  43. YHOO is going up so you know they are just throwing money into pretty much anything!


  44. Some positives in my portfolio, on longs, FSLR & DRYS up! Selling calls on AAPL against stock.


  45. BSC up 3%, begging to be shorted.


  46. CME up 30 since yesterdays low


  47. CROX – Just got in, still good for the 2x roll up to Aug 55s / Sept 57.5s?


  48. Cramer says if YHOO goes to low the Fed will buy them :)


  49. DECK- now see ya up $12


  50. NFX – got stopped out on the headfake for a nice 70% gain on the 50 calls , looking to re enter, but will wait on the broader market to bring it to me again.

    Nice to have VLO up with FTO down. Wish could say same for WNR, that one get shortable again soon.

    HAL – buyback alive and well.


  51. EDU- now getting in the buy zone.


  52. QQQQ calls and 1/2 out of DIA puts! I had a progression of DIA puts I laid out earlier and now I’ve taken half of that off the table (the other half will now come off at another .25) and I will DD (or rebuy in full as the case may be) when upside momentum slows in the strike that is closest to the money at $2 in August and $3 in September to cover what I hope are gains to the plus side. At that time I put tight stops or half out of the calls.

    This stuff is not easy and it doesn’t always work but at this point in the month (4 weeks to expiration) I don’t mind having a strangle on the indices. I heard nothing exciting from these guys so if that’s what the markets were looking for, we didn’t get it but my conspiracty theory de jour is that the PPT already gave the brokers $50Bn to toss into the markets today regardless of what they said to end the weekend with somthing like a recovery.

    I’m still very skeptical and will be rebuying DIA $135s, even though they are $2.35 rather than the $134s if we turn red here. As I said earlier – I just don’t know and cash is by far the best way to go today as no fundamentals have changed (there goes SHLD again!) so this is all a matter of perception.

    I’m watching XOM breaking below $87 as a significant issue if that happens but I really have to go with my gut here as I put myself in the seat of a shameless market manipulator and this would be my game plan. Why bother having that very unique summit if you’re not going to follow it up with a rallly. It would be a disaster to close the market down after the whole economic cabinet and the President try to reassure us…


  53. Lululemon ipo trading at 28.20 on the TSE exchange


  54. AAPL calls – don’t sell too many. I was just thinking how glad I was that I’m mostly naked…

    GS $200s are currently $5.40, which is a crazy amount but they might make a nice mo play if GS crosses $96.

    Pisani says calm is good and he’s right but I would be very concerned if we go red at all for any length of time.

    CROX – strategically yes but unfortunately the Sept spread turned ugly as you no longer get 2 for 1 so you have to dip into your pocket a bit.


  55. RIMM crashing!!!


  56. Phil – I know you’ve said that you mostly stay away from the homebuilders because of their irrational nature, but what do you think of buying some Jan XHB and KBH calls – I’m trying to follow your rules of going far out in time and nibbling – more based on technical exhaustion of the current trend than fundamentals, which are admittedly still horrendous – thanks!


  57. Phil,
    I don’t want to make the trade today as I am driving to Boston…but for current Sold Puts (FSLR, DRYS), I could sell calls against them if I thought their rise today was too much. relative to the weak (down) market. Thnks.


  58. AAPL – getting ready to lighten up on open calls (don’t want to cover as they may pop but if we are failing here this can turn ugly).

    I’m kind of drifting into just trying to stay even on puts and calls now, buying more calls on the way down and more puts on the way up so a 200 point move in either direction within a week will be a jackpot but this is very tough to call so I’m aiming for 80% cash going into the weekend. XXX


  59. Out of VIP Aug 105s up 30%. I love that stock when it gets under 100.


  60. CROX – I noticed :( . I think I’ll stick with the spread for now, amended it slightly by rolling one of the 50′s into a 55 while trying to get the 2x effect. Hopefully it’ll come up again, and if not I’ll still have the premium to eat at the end of the month to make up for the delta between the calls.


  61. looking at the volatility in BIDU options, some might get confused and think it as a small biotech waiting for some FDA approval :-)


  62. QQQQ’s might want to put in a intraday double bottom around $48.50 before (that is if) we head back higher. . if it goes below 48.50, all bets are off. .


  63. VXN is now a whole point lower than VIX. Hope the VXN stays below VIX for the rest of eternity :-)

    SHLD still looking weak, possibly below 130.

    Market might retest yesterday’s lows.


  64. HB calls – sure because they are as likely to go up as down for no good reason (probably a BS merger between 2 regional biggies that will give them a whole year to fudge the books).

    Brain – was there a question there? Man I wish I had the ability to check in while driving like that 10 years ago – what a huge data advantage we have these days! Selling puts seems like a good move to me on those two but we have to watch the broader markets to decide if calls need to be sold.

    Ouch – real vote of no confidence for our economic team – all those pent up orders coming in fast.
    Stopped out of oil calls, heading to more cash. If the market rallies now I will miss it as I’m going way more bearish including DIA $134 puts, now $2.38 XXX Stopping out of all to cash!!!


  65. YOu know those trading stops really screw with your stops. I got stopped out of DIA puts yesterday afternoon (midway through the drops), when it bumped up on a trading stop and got stopped out.


  66. I love the way CNBC calls sellers lemming on a 100 point drop but on a 2,000 point run up they are called “smart investors.”


  67. Article about stops: http://seekingalpha.com/article/16511

    BA Big and Bouncy!


  68. Phil,
    Yes, I wasn’t entirely clear…the question is can one sell calls against sold put positions; i.e. will the brokerage firm match those together the same as bought call Leaps or owning actual stock. I currently have sold puts on those two stocks and I have thinking of also selling calls against my positions, if the market turns bad.
    Computer on the road…yes, on our drive to Boston, my wife will likely have her computer open and checking and sending her emails, and also giving me stock quotes on the market. Modern age!!


  69. Had a 0.25 trailing stop on the DIA put. It got stopped out when the trading stop went in and it bounced up momentarily..


  70. PTR did not get the drop I would have hoped for so I’ll be watching the FXI for signs to get out of there.

    SUN getting beaten down.

    C at a 52-week low!

    Don’t forget how much BA and IBM are boosting the Dow since thier $100 price gives them significant leverage. MMM is another $90 Dow component having a big day which makes me very surprised they are letting XOM go as it’s usually an easy one to stir up.


  71. ALBO- I’m glad you have joined the VIP party


  72. FWLT puts?


  73. I think I am going to call the profunds guys

    oil up more than a dollar and DUG (ultra short oil and gas) up 1.4 and DIG (ultra pro oil and gas) down 2.5. Is this highway robbery? or may be the nat gas plunge has more affect than crude higher?


  74. Brain – most likely (and I’m not even sure portfolio margining is a big help here) they will all be treated as naked sells and cost a ton of margin. Selling a call against a sold put only limits your exposure by the value of the opposite play but your risk on either side is still whatever BUT I could see the logic that taking the opposite side should not increase the risk you’ve already been assessed for the naked whatevers. The short answer is – call your broker and I’ll be curious to hear what they say.

    LOL GM pretended people actually wanted their stock for a few minutes – they are so funny!


  75. FWLT – not down here, they are too crazy. Back at $120 – yes.

    RIMM coming back off $217 for all you believers!


  76. BSC now red, why don’t I listen to myself?


  77. CROX getting ready to fall off of a cliff on my chart


  78. FXI- Phil you have a buypoint on this badboy? Or we going by feel?


  79. MJ23 – I have some DUG as well and I believe it is as dependent on the movement of the oil majors themselves (XOM et al, which are down) as the price of oil.


  80. NFX – biggest up mover in E&P land despite utter lack of price target moves or ratings changes.

    of course it’s more than double the move COG is getting with an upgrade so maybe we just don’t get a ratts butt what the sellside says!!!


  81. Long
    select biotechs; I like CELG and GENZ

    Short
    Refiners; MRO, TSO, FTO

    premiums are reasonable on these calls and puts!!


  82. TSO still breaking down. Expect bigger bounce from $45, $3 below current level.


  83. Lithium --

    Wow, BSC whipsawed right back to green….


  84. CLF
    came back to almost 72 now. impressive!


  85. BP, TOT, RDS.a all looking bad so Europeans are getting out of oil. Since they have all the money it’s going to be pretty darn hard for US investors to keep these things up by themselves. HES finally heading deep south. The market still can’t fight an energy sector sell-off and the brokers still have too much money in commodities so let’s keep an eye on HES, SU, SUN, and PTR (Buffett just cut back!).

    I’m pre-rolling PTR to the $145puts at $3 in case the Buffett news catches on but it’s a small reduction and he’s way ahead so this is more about me taking a double off the table on the $150 puts. XXX


  86. I would say this is like watching paint dry but that would be way too exciting for what’s going on today


  87. CLF – Yeah, but not impressive enough to make me smile… :|


  88. BillBigD:

    Thanks; just trying to take a page out of your most successful book !


  89. Zman, what’s holding WNR up?


  90. FWLT EXM out from buys yesterday

    MICC time to buy yet??


  91. CROX – I disagree, would probably be up more in a good market. See if it holds $55 but I’m thinking it will hold $56. Earnings and outlook were specacular so I would be thrilled to see them back at $50 for a ‘mon back but I very much doubt it.

    FXI – not playing them, just watching to see what the sentiment is for Asia’s monday after that horrible open. People trading FXI seriously are on the phone to very sleepy people in China getting all the latest news before they pack it in for the weekend and they should have a pretty good handle on China’s open by the day’s end so I watch that as closely as I watch the European indexes.


  92. Phil:

    I’m still looking at TRMP. Is it low enough to be of interest,
    or is it too dicey? Thanks.


  93. Phil, agree with you on CROX. . just thinking it is ready to take out 56.30 and go a little lower. .I have a buy order in at $55 bucks.


  94. GSK – Taking a dive, makes me wish I hadn’t played it safe and sold 50′s only against he nov 52.5′s.


  95. Phil,
    re: Sold calls against sold Puts—I will call Fidelity next week (out the door, now), and report back in. As for the margin, I think it is against the sold puts, which I already can “finance”…I am thinking no more additional margin on sold calls.


  96. Hello, everyone!

    I was away on a long-term assignment. I’m finally back, just in time for all the fun (Dow down 300+ points yesterday).

    I followed Phil into XOM 90 calls at $0.90


  97. DNDN – once again a flight to safety


  98. RIMM
    things could get ugly today for RIMM!


  99. Interesting to note:

    ————

    SAN FRANCISCO (MarketWatch) — Outflows in U.S. mutual funds on Tuesday hit an estimated $5.5 billion, according to TrimTabs Investment Research. That would amount to the second-biggest outflow of the year, according to the data tracking firm. Only a $6.5 billion outflow on Feb. 27 was greater.


  100. CROX- just closed out the spread! $2 gain not bad for .10cents price per contract paid. And I played it poorly.
    Phil I am learning as the CAT spread last week work out for about $5 per contract. Thanks!
    NOW we need thing to go UP UP!


  101. Nice call Matrix, just picked up 20% on Crox Aug 55 puts in 15 min. Thanks


  102. Phil.. any general guidelines for when not to sell the premium against a long term position?

    GM Jan 35 puts for example.. I only sold half (for no reason better than gut).. won’t I be able to roll the caller down anyway?


  103. Brainfill:

    Make sure you understand what Phil said about risk. The fact that you have sold
    puts does not protect you on the other side if you sell naked calls. If the stock
    goes up sharply against your naked calls , your short puts don’t provide any
    protection other than the premium they provide. They will more than likely just expire
    and you won’t won’t the stock.


  104. Won’t own the stock.


  105. Phil, thoughts on McDonalds for long term portfolio? Last earnings were down because a one time charge of selling stores in latin america. they don’t seem to be terribly affected by increased commodity prices? thanks in advance.


  106. TRMP – he couldn’t find a buyer. That makes me think something is very wrong with the books so, no.

    CROX – good call Matrix, I didn’t think they’d find so many sellers but I gess they are up far enough and the market is scary enough that people are willing to sell. Of course I’m an idiot because I just sold AAPL myself even though I love them based on the same sell-side logic! (kick, kick)

    GSK – lot’s of options for the $10KP including rolling the caller to the Sept $52.50s for an additional $1.50 in premium which would put us .50 in the money with no downside risk (we are currently down $1 against our caller). I’d rather wait to see if we get a bounce around $50 but that’s my exit strategy. At .40 I will buy out 4 shares as I have no need to be greedy and it will be a great move if the stock recovers. XXX

    GRMN getting killed, people are taking money out of high flyers…

    Soccer – welcome back!

    DNDN – LOL!

    *The RIMM bear takes a bow*

    BZH digs deeper and deeper…


  107. Just a side note.

    The CEO of HOV was complaining about his stock selling at 1/2 book value. Who determines the book value of unsold homes and inferior land. Same thing with banks and brokerages. What is the book value of many loans on their book. For BSC it turned out to be nearly zip. Just giving novice fundamentalist some ammunition.


  108. Another 200 pt day?


  109. amt08 – re what’s holding WNR up…apparently nothing.


  110. MATRIX- yes thanks I didn’t see CROX in the $55 range. Was planning the 3′oclock fiesta as someone smartly said like watching PAINT


  111. GSK – “At .40 I will buy out 4 shares as I have no need to be greedy and it will be a great move if the stock recovers”
    I assume you’re speaking of the 52.50′s that we shorted against the Nov 52.50′s, and the roll to Sept 52.50′s is for the 50′s that we shorted against the same.

    Right?


  112. LithiumBR --

    Thanks for the head’s up on BSC. After your mention and the brief spike up, I schnitzled the 120 puts @ 3.50.


  113. puts on FFIV ?? still up 1.5


  114. Don’t think the bottom is at 55 yet CROX, but could be lucky with catching a bid at the low of the day. . I doubt it. I’m never that lucky.


  115. Phil,

    where do you see the next stop for the major indices?


  116. BBD – I did Dragons CROX spread and it worked out ok – not $2 worth – what was your spread? I need to learn this stuff on the “after earnings” trades. Thanks

    oil – 75.96 +1.01

    Phil – are you buying any DIA calls at this level?


  117. BBD – cool! I would rather see the market drop to 13,000 or 12,500 where I will be super comfortable buying again, we’ve been needing a good correction since April.

    When not to sell premium – when your feeling that the stock will go your way overides a sensible strategy to protect yourself (ALWAYS remember why you went into a position) by at least 57%.

    Bye bye oil again!

    CAT grinding down – how can you not think it’s over?

    XTO, NOV, VLO, CVX, FCX, EOG, HOC, HOV racing BZH to hell, PKX is no alternative to oil pain, OI, RDC, C!!!, FNM, JOYG dying with the miners, XOM (calls all gone), X, NE, DO!, SLB!, GS! – looks like I’m going to get my 13,000

    DIA $133 puts are chasing at $2.38 but good if you haven’t got a downside hedge and good if you are rolling mattress plays. XXX


  118. Bought out my CROX 50 caller at 6.1.


  119. Shorting refiners this morn, thanks Phil, happy , zman
    buying puts on MRO and HOC -16x earnings vs VLO- 8x earnings.
    Great long on CELG I was analyzing that and moved it up the watch list, scalped it this morning with you when i saw it.


  120. MCD – big buy when the music stops.

    GSK – sorry yes. Our Nov calls are fine as they are for now, not too far out of the money.

    DIA – no I’m out of the call business, like I said earlier – if that “Summit” of the PPT couldn’t get the markets going then we have a real crisis of confidence and while they keep saying 65% of the S&P is beating expectations, the expectations were for a terrible quarter so BIG FRIGGIN’ DEAL!

    VIX taking off again and I will remind you to either take uncovered leaps off the table (LTP too) or cover them because once that V goes away you will suddenly find your contracts are worth about 10% less than you thought. When in doubt sell half absolutely applies here but I don’t have too many doubts about wanting to be well protected in this mess. Let my leaps by surprised by a sudden rebound forcing me to roll up my calllers and take a small hit for one of my remaining 18 months – that should be the problem I have on Monday! XXX


  121. CROX Spread- I had the A50/S52.5 like everyone else. I tried to sell the Sept $52.5 at 9 at the open and got shut out. So I sold them at $8.50. On Matrix heads up I bought back Aug at $6.5. Thus the $2. I just with I had the 1000 contracts. LOL
    NOV- bought it again like a fool. I am not buying anything more today. LOL


  122. Mattress plays and too many trades!

    At some point I would like Phil and Sage to write about how to manage mattress plays without exceeding trading limits. This is important for smaller accounts. Today I’ve run into an “intraday buying power” limit with optionsxpress, so I’m done buying for today, even though I should be padding the mattress.


  123. Ouch. XOM dropping like a rock


  124. NYX holding up well!


  125. Mattress plays --

    I guess I already know the answer to this, but is there any way to modify this strategy for those of us who can’t make more than 3 daytrades in a 5-day period (and who already will be frozen if we make even 1 daytrade today??)

    Thanks in advance.


  126. Market levels to watch (from my post last night)
    SPX 1440-1460
    Nasdaq 2550-2575
    Dow 13200-13400


  127. Out of XOM 90 calls at $0.85


  128. Phil,

    Should I cover my CCJ Sept and Jan 09 calls with the September 40 0r 45?


  129. Phil- regarding your ‘cover yr LEAPS’ comment. I have BWLD Mar08s naked, and have been waiting to sell Aug 40s until their earnings next week. But the premium is $2, should I just take it?


  130. Mattress plays – hmm, that’s a portioning issue, don’t forget I’m 70%-80% cash when I’m doing these so it’s all about the percentage of your portfolio, amount of cash etc. If Sage can tackle all that it would be brilliant but my brain hurts just contemplating all the variables that need to be discussed.

    PTR selling off a bit. If BA turns down we could be good for another 100 points down pretty fast. IBM holding out too, very stubborn stocks we love in the LTP!

    MRVL refuses to go down so I’m going to initiate Jan ’09 $25s, now $1.35 as a buy and forget for a while play. XXX


  131. Mattress plays & many trades – I’m afraid there’s nothing to be done about it. I’m in the same boat and have learned to avoid daytrading as much as possible so I can keep my powder dry for when I need it. That does keep me away from following quick trades, but that’s why I hedge a lot against my longs (thanks Phil for the education!).


  132. PCU big drop coming.


  133. IT over! I’m hitting the bottle this time an hour earlier than yesterday. LOL


  134. Phil, how about a s/t trade on C?


  135. CROX – Nice reversal candle on the 10 min. Turning up?


  136. Phil

    LFG sept 100 puts bought $5 now bid $23.2. thanks, same with FAF and FNF. The gifts that keep on giving.


  137. BBD – thanks for the details – hit the bottle..LOL


  138. Limited mattress plays – let’s talk about that on Sunday. Remind me.

    Happy – you’ve got to write those things on a chart so I can print them up – it’s good stuff!

    CCJ – why give them 2 months to recover? I’d go 2/3 Aug $40s for $2.25 as a cover, that gives you good flexibility to roll them up to a full cover on the $45s if they start taking off and above $45 you really won’t care.

    BWLD – cover does not mean 100% cover (see above) but at least being sensible. I agree they could go rocketing up but expectations are high and the stock is near double last year with a p/e of 37 and a forward p/e of 27 (vs CAKE 23/18). PNRA was very hot too! Not looking to scare you but if the market turns unforgiving it doesn’t matter what they say (remember Q2 ’06?). You have leaps, if you intended to gamble you could have just bought the Aug $40s and gotten it over with right? Not taking $2.12 for the $40s on at least half on a $38 stock because you think they will go up more than 10% on earnings (which would be right about their median all-time high) is probably not the best strategy and not at least selling the $45s for .77 because you are so certian they will rertake the ATH of $46 would be just baffling because, as I said, why don’t you just buy the Aug $40s for $2.12 and get it over with instead of drawing it out over time?


  139. OPTIONDRAGON- then buy your PUTS my friend!


  140. BillBigD – what are you drinking cuz I’m about to go long it. Should have a great Q!


  141. PCU already announced yesterday night btw


  142. BBD/Dragon – do you see a good entry point and how many months would you go out? Thanks


  143. Optiondragon- read your post! Also numbers came out


  144. FTO finally dropping


  145. phil,
    thanks for the MRVL recommendation. i’m much more interested in long term plays than the day trade approach.


  146. Ridiculous timing on PCU!


  147. BBD – I’d stick to the light stuff until 2 because it is still possible that the PPT will time a late strike, which is what happened in Asia, shaving 25% of the losses in the last hour. Europe got a pump all the way to positive right after lunch but ran into late selling at the close. I’m waiting to see if XOM can turn it around (it IS XOM’s job to save the markets!).

    C – short-term no way, long term I’d wait for the V to drop and grab the ’09 $50s for maybe $4. Those are ones I’d be happy to roll down if I had to. Again, they are big in China – say no more…

    CROX – would be way better if it flatlines at $55 and establishes a base than if it bounces too much.

    Cool Lith! Congrats!


  148. oh, and if General Morons goes below 30 today i’ll buy everyone a new car!
    (not really, but be excited as if i did)


  149. Phil I’m up 28.2% over 2 days and you can FP that number if you want, I blew away the other guy you quoted last night by 2X, much thanks to PSW!

    Anyone have thoughts on an upcoming earnings play that might be a real shocker (or just a bloated stock ready for a plunge in general)? I’m in the mood to blow a few bucks on a far-OTM penny option gamble. I think the market overall will recover soon but if it doesn’t, it’s ripe for one of those once-every-two-years events and it would be nice to have one big play on the table.


  150. I bought the AUG 100 for 1.2 and then cost avg up on 1.5. Right now I would buy the AUG 95 for quick momo or safer with SEPT 95 for 2.85 those look good!
    Have you seen PCU chart!!!!
    REEEEdiculous!


  151. Awesome call on PCU, Dragon…..I didn’t get filled on the puts and then watched it zoom….but that was pretty spectacular.


  152. OptionDragon – nice call of pcu…..i mean put ;-)


  153. PCU
    dragon, funny how we talked about it yesterday that this thing didn’t drop!! =)


  154. PHIL- just sipping amaretto right now.
    amt0803- you are so right! LOL


  155. Long-term plays. The only reason we haven’t made many lately is because there weren’t any good deals. Now that we are getting a pullback and possibly falling back into a trading range, focus will shift back to the LTP. For those of you who haven’t been with us for a full year, we go where the money is and USUALLY we are weighted 75% LTP and 25% STP from a portfolio standpoint and the STP is just for fun opportunites that come along.

    In a “normal” month in a “normal” market, we are thrilled to make 20% and my goal of the LTP is to make 50% for the year. It may not be as sexy but it sure beats losing money like over 50% of the mutual funds do in a flat market so do not be surprised if our strategies shift considerably away from short trades in the fall.


  156. Phil- I knew you would come around on MRVL!


  157. Dragon – thanks for the PCU call.


  158. Phil
    Is it a goog idea to buy end of the year SPY calls in anticipation of a higher market by then. If yes, any suggestion ? Thanks.


  159. Phil did you catch the PPT volume spike on the DIA’s


  160. Don Hays to be on Street Signs with Erin at 2PM. He sounds like a rube,
    but he’s very smart. Pointed out today that the OEX measure of volatility-
    VXO, has reached a level which has always produced a meaningful rally
    each time it hit these levels in these last four years. Worth watching.


  161. Phil,

    Are you setting anything up with TIE ahead of monday’s earnings

    Thanks


  162. Phil, I have TM Aug 130 with a basis now of $2. Any way to save this? Thinking of selling 125 or 120s as cover. Thanks


  163. Phil,

    Do you like NMX ahead of earnings? ICE held up well yesterday and is rocking today.


  164. PKX
    another one that hasn’t been hit.

    RTP
    just keeps on going down!


  165. VIX is at 22.7


  166. PII also the gift that keeps on giving…whos gonna buy that crap in this economy..trailing stops up


  167. Holy crap! Someone is building a 2,651 foot tall skyscraper in Dubai??

    Is that going to be the headquarters for Rah-Rah-Go-America HAL? Talk about opulence.

    That energy task force Cheney put together sure got the job done. Considered yourself fleeced, Joe Six-pack.


  168. Why on earth is CFC up today? What a train wreck. Another director dumped shares-- could this be their buyback holding it up, giving them time to unload?


  169. Phil,

    I’m ready for the LTP strategy change. I’ve been trying to follow only a few of the STP plays and it’s like drinking from a fire hose sometimes. As much as I dislike my conclusion after several months of STP trading and trying to work full time at the same time, I better focus on the LTP or I’ll lose my job and have too much time to focus on the STP side of things. 7 years to retirement, then I can do the STP!!


  170. buyers coming in? 13350 seems t hold


  171. Interesting, the low so far on DIA is 13301, which is 5% from the 14000 top


  172. FTO finally dropping?!?! It’s been dropping for 2 weeks!!! Too much emphasis on minute charts.


  173. Sector rotation selling if that makes sense. Happy, BIOman(my bro) was looking at PKX yesterday.
    Phil, Happy here is my list I compiled- GRMN, PCU, AL, MLM, ATI, MDC, FCX, ^HGX -housing index,
    NUE, FTI?, X , MA-eanings, GRMN earnings, Ua -earnings, WFR, CMG
    FXE- unwinding yen carry trade short? Strong FXE-indexes correlation

    It seems the steel sector have the most to lose on a M&A deal unwinding and overbought technicals.
    Moving from one sector selling off to another.
    Rotation goes something like this
    Financials, oil, tech, miner/metals/ steel


  174. BIOman says HOT selling off hard on removal of takeover premium in the shares, market feels the deals might not get done or higher probability of not getting done. Everything pricing in risk and then moving on.


  175. DNDN – Have Aug 7.50 calls with cost around $0.95. Suggestions on what to roll that while can possibly get $0.55 for it today?


  176. Earnings highlights for next week:

    Mon: ADM (good for a strangle), CCJ (wow will this be fun!), HUM ($60 puts are just .75), MNST (should be good), RSH (should have thought of shorting them when they were at $35!), TSN, WWY, / (night) FRK, SUNW, TIE (I’m adding on this dip) and VMC.

    Tues: AL (funny if they blow it), ADP (good jobs indicator), AVP (Int’l sales), BEAV, CBS (will affect DIS), COH (how are the rich doing?), GM (ROFL – why do they call it “earnings”?), LCAV (I like the Sept $50s for $1.25), LIZ, MRO (potential disaster, $52.50 puts are $1.55), NMX (should be huge, $135s are $2.80), OSTK (should be funny CC), SIRI (I’m naked), JOE (can it be worse than expected?), UA, VLO!, VNO (possible buy if they get down to $100) / (night) BWLD, CEPH, CMG (Sept $75 puts are $3.45), DWA (has been spectacularaly disappointing in the past, Sept $30 puts are $1.15), FSLR (they’d better do well), LFG (how bad is it really?), LEAP, MET, RUTH (probably the first to go if upper level dining is suffering), SWN, TUP, OVEN ($12.50 calls at .65), WFMI (LOL).

    Weds: AT ($65 puts for .98), MT (Sept $60 puts for $3.55), CI, XEC, CTSH (Sept $85 calls $4.40/Sept $75 puts $2.35), DWSN, DVN ($75 puts at $2.62), FCL, GRMN (I’m going to take the Sept $85s, now $4.95 and work into a spead with the Aug $80s, hopefully for less than $3), JNY, KFT, MA ($145 puts are $5.35 for a craps roll, also OCT $160s at $11.90 selling the Aug $160s for $7.25), MCO ($55s for $2.62), NBL ($60 puts at $1.43), OSK, OC, PEG, Q, THQI, TWX ($20s for .43 – they have got to be kidding!! ‘Mon back), TEVA, RIG, UMC, VZ ($42.50 put and calls at $2.20), ABX ($32.50s for .97 – beep beeeep), EDS, GXP, GW, LF (are people still buying expensive toys?), OII, PRU, SBUX (Sept $27.50s for $1.15), SUN, UPL, DIS (if CBS is good then I’m back in with $35s)

    I’ll get to Thurs later as you guys probably wonder where I went!

    Did I say 1:30? I meant 1:00… 8-)

    ,


  177. XOM finding a floor.
    This could be the bottom for the week. medium prob. for the market.
    Happy might be right, we are not going to get a clear direction until after Fed meeting.
    So market churns here and it becomes a stock pickers market with cross currents.


  178. went long MS for a rebound play. GS/MS puts had been good to me though.


  179. phil – Cashed out of AAPL 125′s pre earning not chancing the nice profit. Would you think this current day’s dip a good point for re entry?


  180. I just read that Michael Moore has been subpoenaed by the Bush administration regarding his trip to Cuba, I thought it was a joke.


  181. REITs taken to the woodshed again. Biggest loser.


  182. market starting to deteroriate again . .here we go. . .


  183. Phil,

    “CCJ (wow will this be fun!)” I just covered my CCJ calls….should I have waited?


  184. Phil
    KFT--Looking to open position for LTP by buying ’08 $35s @ 1.90 and waiting until
    after E on 8-1 to sell calls against, any suggestion? thanx


  185. AAPL is down 0.9, yet my AAPL positions are up as if AAPL was up 1.8.. VIX is a strange, and sometimes beautiful creature..


  186. MRVL – I always come around eventually! I may even buy WFMI one day if you keep asking all the way down to $20!

    SPY/ANY LEAPS – I was going to say not when the VIX is at 20+ but SPY is down $10 in two weeks and the March $148s are down $6 to $9.80, that’s not a bad ratio to play. You can sell the $150s for $1.90 and roll them every dollar so it’s an XXX as a low-risk way to play as you can roll yourself down at .50 per dollar too! Actually that disparity makes it a REALLY good play.

    TM – 8/3 earnings and you now want to make a huge bet against them? No thanks! I’d roll down to the $125s for $1.30 (+ $1 = $3 basis) then DD (basis $1.65) and Sell 1/2 the position in $120s, now $3.40 but I think I’d first sell 1/4 and hope to do better on the next 1/4. That will put you in the trade for 0 so no downside risk and a lot of outs if the stock does well including rolling back to the Sept $130s, now $1.45 on a spike and rolling your caller up to 2X whatever works. XXX as a new play!

    NMX – see earnings outlook.

    STP and jobs do not mix!!! I’m not even running the STP for my fund, way too stressful and rich people seem to be happy enough making 50%…

    5% rule rules!

    DNDN just spend the dime and move to September. This play is all about the possibility of a huge pop. You spend .15 per month and, hopefully, one day you will be there when it shoots up to $15 and you won’t be such a greedy bastard that you don’t take it off the table.


  187. TICK at 500, TRIN at 1.30. Meaning, the upticks are on lighter volume.. . Don’t like that one bit. .


  188. Dragon – are you establishing a “put position” on any or all of your list? Which steel/metals M&A deal do you think may unravel – they have been underwritten with commitments from the lenders – right?


  189. took 5 XOM 90 calls for 1.30.

    is CCJ a call play? thanx for the NMX alert.

    michael moore is sucha loser. why the hell did he go to cuba anyways?

    bdc


  190. No more put buying, until more data is available. I would be long here if anything.
    I’m sure those deals will go through but future deals are more difficult.


  191. AAPL – for a reentry (and I’m there too) I’d rather sell whatevers on a run up and then take the longer Oct of Jan calls to capture the Aug premium. That way I don’t have to guess a good spot, that will be my caller’s problem. I really want to see a clean break over $150 where I can sell the $155s for $4+ and buy the (perhaps)

    My bank (WFC) has called me 2 times this morning to get me to refi (and I have a 5.75% fixed). Earnings were not hot and they are probably getting desperate…

    CCJ – I wouldn’t fully cover. Better to just buy a few more cheap leaps.

    KFT – it is not your job to save KFT. Just like I just said about APPL, if you intend to do a long/short spread then you have no reason to guess a bottom. When the stock turns, the caller pays you more but you guys are all nuts if the market bouncing back 50 points from a 500 point drop is putting you into a buying frenzy!

    VIX – that’s what I’m talking about. If you still have a lot of open contracts you are not as rich as you think you are, when the VIX pops so will your premiums! CASH CASH CASH, especially if the dollar is bouncing…


  192. DNDN – I wouldn’t bank on 0.55 for those Aug 7.50. I’ve had an open STO on those for a week at that price. It always gets close on the price spikes but never triggers. Still, I have faith that sometime in the next week it will get pumped heavily enough on some non-news item/rumor that the order will trigger. Just look at the chart from last month to see some crazy end of day moves.


  193. DECK was a great play after earnings today.


  194. CCJ – I will be buying calls all the way down to $20 if I have to but I will also roll to 2020 eventually so this is a pretty long-term hold for me.

    Michael Moore is a loser? How about the idiots in the administration making this an issue? Are they worried that people only think they are just a bunch of tools and not a bunch of complete and utter tools? Well, this will certainly cement their image as the biggest bunch of jackasses to ever abuse power in this country!


  195. I everyone. 1st post today. Been busy managing positions.

    Don’t know what to make of it, but money flow indicator for SPY pointing straight up since yesterday 3 pm. and especially since noon today. Can be a leading indicator …

    Traded a bunch of stuff for scalps off the lows.

    In TIE Sep 35 calls w/ Aug 35 cover.

    Bunch of naked puts put on days before working out well. ICE, CROX, among them. Closing out for nickels when I can.


  196. But, you just never know when another sell program will hit ya.


  197. Is there a site for Earnings Dates which also can display fundamental data about the company on the same page..


  198. Dragon:

    Are you still in the GRMN strangle? I’ve been watching it and today it’s getting close to both ends being up (or at least even). When both sides starts to top out, do you pull some off both ends to reduce the basis into the earnings? I assume you do, since you’ve described playing the volatility increase/crush but still thought I’d ask. Thanks.


  199. Phil, DNDN – given the Jan8 10′s are .35, would that make a better roll than buying the sept’s? .15 per month vs .25 to be exposed for the next 5?

    or were you talking about the 7.50′s?


  200. any positions in OIH?


  201. XOM once again proving the sometimes value of doubling down relentlessly!

    AXP Oct $60s for $3.30 (was $5 Tuesday) and Oct $62.50s for $2.20 (were $3.25) are good plays. This is a defensive play for me as my wife prepares to go to Italy! 8-)


  202. ZMan
    Any advice on holding WFR puts over the weekend?
    Thanks


  203. crude rallying, is it close to 100 now?


  204. I know this has been asked before, looking for an options calculator for complex spreads. ANyone have any links?


  205. Michael Moore-Can’t say I am a fan but pretty weak by the administration.
    DECK- Better play Wed! That is the way OPtions should move
    NE- stock split


  206. AXP- That was classic Phil, and THANK GOD it has NO SPENDING LIMIT


  207. DNDN – I was talking about the $7.50s but the Jan’s make a nice “what the hell” pre-roll (I have those). This is pure speculation and you have to imagine you will put 24x.15 + 3x.35 into the position to take you out to ’08 and you may end up with nothing but you may end up with $10, which is a 300% return so it’s not so bad for a fun play and it has better odds, especially if you are prudent about halfing out on rumor spikes, than most gambles.

    OIH – we took the Oct $195s for $5.75 yesterday (I just filled mine a little while ago).

    Don’t forget Europe sold back to their lows at the close!!!!


  208. Phil,
    You say,
    VIX – that’s what I’m talking about. If you still have a lot of open contracts you are not as rich as you think you are, when the VIX pops so will your premiums! CASH CASH CASH, especially if the dollar is bouncing…

    I guess covered calls should be O.K. Right?


  209. I’m very surprised to see JNJ at $60 but it’s not my job to save them.

    BOOM booming! ATI may be coming off the mats here.

    XOM can’t break $88 – how the mighty have fallen.

    BBD – it’s worst than you think — it’s a black card!


  210. The question is whether people are more afraid going into the weekend long or short. I would think long.


  211. Michael Moore – Best strategy for the admin would have been to ignore him, but alas, its not so. :-)


  212. VIX – yes covered calls are great because they are even more screwed than you are!

    GOOG sneaking up on us! $520s for $8.30 as a mo play, stop at $7 ($1.50 trail). XXX


  213. NE
    2-for-1 stock split! Thanks BBD! No reaction, yet!? If the market turns up, this should fly!! Watching Nasdaq 2685!


  214. GOOG
    waking up!!


  215. Phil,

    Which CCJ leaps are you buying? The Jan 09 at 40′s or 50′s?


  216. CELG
    gaining momentum!!


  217. Happy, VSEA?


  218. How come CFC is rising for a market like this? maybe it is down too much….


  219. Phil
    Thanks for the SPY trade idea.


  220. VSEA
    news not bad. Wait ’til the last hour. See what the market does!


  221. GOOG spread would be awesome.


  222. Refiners
    going down again!


  223. Nasdaq couldn’t quite break 2685!
    SPX couldn’t quite break 1475!


  224. Good find on GOOG Phil!


  225. AMEX CARD- I use to carry the Black Card also, damn thing was hand delivered. Then I got turned down for a big steak dinner in the Dot .com days. Drunk, told them to F-off and then they promptly said gladly. LOL
    Now just a piker with the Platinum. How I have learned not to let the little things upset me.
    But the fun part Phil is when you get your bill and everything is 40% higher. Those $200 dinners, probably more with a family, come out $280. Talk about painful. LOL


  226. Thurs: BKC (MCD got slammed and $25 puts have just .20 premium at $1.73 – can cover with 2x $25 calls at .22), CHTR, CDE, ED, CVS, ED, EK (fun to play $25 puts at .70 and $27.50s at .60), EXPE, FAF, GMCR (are they really better than SBUX? No options though), IP (I would think wood is getting cheap), KTO, KBR, MGM (no one is buying them so Sept $65 puts at $2.33 are a good gamble), NYX (got leaps), PTEN, PDE, RDC, HOT (missed them!), TRMP, VIA, GSF (during the day!), BID (during the day) / (night) AH (short BAESY.PK if they miss), BOL, BUCY, LNG (Sept $35 puts at $1.80), GES, LVS (also fun), NEM, NT, TRLG

    Friday: BW, EOG, PG, WY, THI

    Another big week ahead.

    Crude up $2.10 – happy Friday everyone!


  227. MOT – 20$ Jan 09 have traded 2664 contracts, it seems like a lot to me. Anyone else think so or would this be noise.

    btw – I own 10 naked @ 2.276


  228. GOOG seemed like it wanted to explode.

    CFC, rolled my Jan 35 puts to 30 puts. CFC going higher should be a wonderful opportunity to buy some far out calls when the damn VIX cools of a bit.


  229. CCJ – still in the Jan $42.50s and Sept $50s against which I sold the Aug $45s. $42.50s are where I’m adding naked.

    BBD – I am just resigning myself to exchange rate hell but, after this week, even the kids are in first class – what the hell, you only live once!


  230. I meant far out puts on CFC. Calls too dangerous, that too far out ones :-)


  231. Thanks for the clarification on the CFC, I was trying to figure out your logic.


  232. MOT – that is a big bet! It was one huge buy and coincided with a 3.5M volume spike in the stock so it looks like someone put their foot down and made a bottom call. Perhaps it was just some PPT money finding a home but I’d follow that trade as I’m a big MOT fan with no MOT stock.


  233. huge volume on GOOG last 15 min.


  234. Speaking of exploding – I totally forgot about my last week’s plan of buying CME after Tuesday’s drop (kick, kick).

    Here comes the Cramer mega pump! He just yesterday said this is no time to be in the markets and now he’s out with a BUYBUYBUY! Says we will close up and amazingly money starts flowing in as he speaks.

    Oil looks finished at $77 – sick!


  235. GOOG dropped from 516--> 508 in 60 seconds – trading stopped??


  236. TickerDoc

    I don’t see what you’re seeing on GOOG.


  237. WYNN $100?

    Cramer says buy XOM

    GOOG .75 stop on half so $10 right now. XXX I have to leave soon so I can’t baby sit it and, even if I could, it’s still good policy.


  238. Phil- your a good dad! First Class for everyone. Shoot I didn’t ride in a plane until I think I was 18 or so. LOL


  239. NOV- looks like it will let me trade 3 times today!


  240. Goodbye Ruby Tuesday…trail stopped out of RTTE 130% gain…


  241. Live feed on Scottrade showed drop to 508 and this is the only commodity showing stopped trading.


  242. Sorry, this looks like a Scottrade malfunction.


  243. need to get above 1480 at minimum on S&P


  244. LTP

    Phil, really looking forward to more emphasis on the LTP! For the most part, my spread positions have been pretty good but I keep getting dinged on swing trading and now have to stop it. I’m one of those who needs a good working port like the LTP that doesn’t require constant attention all day long. I stupidly left 3 long leaps uncovered for just a bit trying to leg into a spread and got caught in this downdraft. Overall my port is down about 10% since I’ve started trading spreads/options 4 months ago. not sure if this is good/bad for this kind of market, but I do know not having PSW, I would have been in much worse shape.

    still feeling bummed but this market is a real BEATCH!!!! Feel like if I can not loose everything in these conditions, I stand to profit if this market ever turns around.

    Brian


  245. I was going to save this post for after close, but putting it up now so I don’t miss Phil.

    I’ve been participating in this list for less than a month, but yesterday’s big drop finally turned on the lightbulb for me. I get what Phil’s talking about with hedging, I get what Sage explains with changing trade structures to rescue bad situations, and I get how the LTP is the right way to go for me. I’m starting to figure out how to trade my portfolio (as the man said, making a living, not trying to make a killing).

    Yesterday brought a huge load of cognitive dissonance for me, but it yielded a huge gain in understanding. I can’t tell you all how much I appreciate this community, and look forward to the future.


  246. Happy

    With you on NE!


  247. FSLR
    our old friend is jumping today!!


  248. would be pretty bullish if we could even close at this levels right now, wouldn’t it? QQQQ’s made a higher low today


  249. YGE and TSL!


  250. SPY money flow indicator looks like it peaked at 2 pm.


  251. CAP- they left for the weekend!


  252. Market
    I’d like to see the market close green!


  253. LDK running!


  254. SPWR, STP


  255. cap--you need to include OBV in your using of money flow,


  256. Thanks K1, Jedd – that makes my weekend! I have to go guys, all out of those GOOGs at $10 what little stuff I have left in SPT is hedged and the hedges are hedged and then those hedges are hedged so I don’t think I will gain or lose more than a point if we open 500 points either way on Monday!

    Have a great weekend!

    - Phil


  257. damn! is the VIX popping???? my positions are ‘bleeding’ me down from my intraday high. maybe time to go all cash and see wait.


  258. LFC AUG 60 calls look tempting.
    Have a good weekend PHil and Happy! Have a good weekend All!


  259. optiondragon -
    haven’t thanked you yet for the CROX spread from yesterday…
    it was a winner !
    :) marlen


  260. SPY money flow turned back up … maybe rally into close. We’ll see after 3:30


  261. Dragon --

    Thanks for all the great info and tips this week. Have fun with your “emerging markets” at home.


  262. have a great weekend phil and company!


  263. GS
    making a nice move!


  264. look at the one day chart of DJ for whiplash


  265. Going down again!


  266. QQQQ’s couldn’t hold 48.5 .


  267. Looking back on the CROX play. It looks like a great play would have been taking a 65 Aug/Sept call spread and a 50 Aug/Sept.

    Anyone have any suggestions on similar plays for next weeks earnings?


  268. sorry, I meant…. 50 Aug/Sept put spread


  269. I’m calling 1450 on the S&P a possible capitulation point. If we break that. . who knows.


  270. Phil –

    I mentionned some positions I had that got outa hand (although my puts did great!) — My aim was to build a long term portfolio based on indexes. Of course I put it together right at the top of the market and have been sellign calls behind the market drop and trying to allow for a little rebound.

    +SPY Dec 155 call @ 7.60 (CB 5.50), now 3.70
    -SPY Aug 152 call @ 1.58, now 1.05

    My real junk is the EFA, due to a couple of trading errors that plagued this one – silly things like selling a put when I meant to sell a call. I paid dearly in my short call premiums to fix it, so im sittin on a big loss, but with time on my side:

    +EFA Jan 09 84 call @ 8.45 now 5.30(ask) (CB=8)
    -EFA Aug 79 call @ 1.13 now 1.35(bid)
    I debated even taking this position due to the spread.

    The SPY position is 3/4 of a position – the EFA is a half position.

    The IV crush thats coming really concerns me also.

    ANy help appreciated.


  271. Been gone most of the day cleaning up lose ends and closing my short term positions (for the most part). I’m off for the next 3 weeks vacation except for a stop in Connecticut this weekend to check out a real estate deal. I’ll stop in for a few minutes from time to time, otherwise have a great 3 weeks and clean up this market while I’m gone.

    Phil, drive up to Poughkeepsie this week, I’ll be there till Friday…the Boilermakers are on me!


  272. LOL what a sell-off at the close, i wonder if that will flush out everyone..


  273. Went to buy some DIA calls about an hour ago to cover the puts I have – thought the market would move up further. Accidentally bought puts. The biggest gainers of the day! Too friggin funny! I need a drink.. maybe a couple.


  274. Riverbed (RVBD) down 2.53. Wonder if Cramer will be hawking it tonite. Today, Baird upgraded RVBD from underperform to neutral, and Janco downgraded it to market perform from buy based on valuation. I bet he hits the analysts tonite, although Baird did say they thought management guidance was conservative.

    Jazz


  275. wow. .hurry up and ring the bell damn’t, lol.


  276. Bill P- Those are some of my best trades !
    BBD- Not going to hit the bottle, going to jump in with both feet ! ! !
    Have a great weekend everyone.


  277. Tie taking a late hit…I thought boom and ati would give them a boost?


  278. damn flew through 13300


  279. That Bob Pisani is quite the cheerleader. . trying to put a smile on this close.. My god. .give me a break!


  280. LOL shoulda listened to myself, -200 for the day


  281. What a week! Am I glad its over! I think I ended up about 1.00 up after all this ecstacy and agony. Have a great weekend everybody!


  282. Maria, too excited? too much caffeine?


  283. Now that was one godawful ugly close.

    1 week:

    Looks like Naz – 190
    Dow – 750
    S&P – 95


  284. or a beautiful close — depends on your perspective …

    :)


  285. QQQQ’s continueu going down afterhours . Monday morning futures should be interesting. .


  286. Bill P – that happened to me earlier – I thought I was buying puts – and I bought calls – and made money – go figure….then I got the puts and made money – you would thnk we do this for a living. Have a good one..


  287. RIMM
    wow, it did turn ugly for RIMM!

    Market
    What volatility!! Stayed within the levels for all 3 majoy indices!
    SPX 1440-1460
    Nasdaq 2550-2575
    Dow 13200-13400

    Have a great weekend everyone! I’ll have posts through out the weekend on Wang’s World!


  288. whats the best strategy for RIMM right now?


  289. Phil – once again (two days in a row)…thank you! Not only managed to obey the first rule and not lose money, but also both days ended up putting a little change in my pocket…
    Have a great weekend.


  290. Phil & Jared

    Sent you guys an email.


  291. DNDN – Got few Jan08 10s @ $.30, in my new account at IBKR – slow to setup and complex platforms, but excellent execution – saved a few pennies per order and for much lesser commissions ( 0.75 per contract or lesser).

    Had same trades in Fidelity too, but it never executed. Nor did I sell my Aug 7.5s at the limit, though I can see it execute at my limit price elsewhere!

    So, for now IBKR seems to be better and cheaper.


  292. DNDN – Thanks Phil & FotoAddict for the Jan08 idea. I need to lighten up on Aug options early as I’d not be able to watch them then…


  293. msquare, been using IB for about 6 months now and I really like it. The trader workstation seems complex at first, but once you get used to it, it’s really easy to use and the flexibilities are great. And I couldn’t beat those prices anywhere for small orders (20 contracts or less).


  294. 1. Is there a site for Earnings Dates which also can display fundamental data about the company on the same page?
    OR
    2. Is there any screener on web which can display next Earning Date of the stock coming up in the results?


  295. R2D2.0 –

    You can use the Yahoo earnings calendar and just type in the symbol:
    http://biz.yahoo.com/research/earncal/today.html


  296. IB – Been using it for a year and it’s really good indeed, although the UI is a little sucky and charts are impractical.


  297. thanks Mr_Sparkle but it displays only the stock symbol… i wanted the PE etc also on the same page. Didnt want to have to go to the page of each stock separately.


  298. phil,
    i am completely new to options trading and have already learned a lot from you but i need help on understanding today’s dynamics. i am long 30 contracts of aapl jan ’09 $140′s and have shoted against them the aapl aug 150′s which position i took just before aapl earnings. it was a modified (slightly more bullish) position than your reccommended one of shorting against the aug $140′s.

    today aapl stock is pushed down with the rest of the market with the dow off 208 and nasdaq off another 37 but yet both my options positions (long and short) increased in value to the tune of almost $2,900.00!! i don’t fully understand it but it feels great!

    i am almost ready to give up owning real stock at all. the mind set of options trading that you teach just blows me away and i hope you keep it up in the future.

    any bright guy can be a hedge fund manager nowadays but someone truly dedicated to teaching the options trading art (investing really) to others realtime interactively day after dayis rare indeed, as opposed just talking about as it as does cramer. let cramer have his cnbc podium, the day will come when you will own the web forum!!!


  299. Highlander – you keep giving Phil compliments like that and he’s gonna raise our fees! Stop it! :)


  300. Highlander true dat – personally I also think there are at least three laugh out loud posts a day as well, like

    “GM (ROFL – why do they call it “earnings”?)”

    As someone quoted Larry the Cable Guy last week, I don’t care who ya are, now that’s funny, that’s what that is…have a good weekend all.


  301. Phil and all,
    It sure is nice to be 98% in cash, especially after taking gains from AAPL….. :)

    thanks,mike


  302. Highlander –

    I don’t have my calculator or Bloomberg out, but the value on your LEAPs likely increasing due to volatility. Day to day price changes one direction or another shouldn’t dramatically affect your ’09s at this point, I wouldn’t think, but someone please correct me if I’m wrong, but I attribute it to vol.


  303. Highlander -

    Dont get too happy over your options price inflation, as pretty much across the board volatilities have skyrocketed.

    This is great today, but once the market settles down that implied volatility is gonna come down and your options will ‘deflate’. To gauge the amount of deflation you are gonna see you can keep track of your position vegas — which will tell you how much 1 percentage point in volatility will effect your position (in dollars). This volatility defaltion will happen to a noticeable degree on the first market up day basically.

    Along those same lines, the boat im in is similar, except im sitting on a lossses of about 3% on a 100k portfolio, 65% of which is capital at risk. This is mostly stuff I was setting up for longer term but of course I set it up at the top of the market, thinking I could hedge it completely should the need arise, and sell calls to work myself out of any bad times, and of course scale in on the way down. If I could hold onto it until august expiration right now itd be about break-even. Not too bad considering the market has corrected some 6-7%.

    Well, looking at my total portfolio vega risk is a lil scary — and Im looking for ways to mitigate that risk.
    The way I see it, I hvae a few choices:

    1. Liquidate the highest vega positions and come back another day.
    – I guess you could call this a delayed roll. Youll probly miss most of your August premiums this way
    but vega deflation of the position would hurt you worse than the premiums would help.
    2. Hedge out as much vega risk as you possibly can by rearranging your short options so they have as much negative vega effect as possible. Rolling into vertical spreads is a thought – but if you are wrong on direction you get kicked both ways. Ill hve to look into more options here.

    Id love to be able to use something like SPY to build a ‘volatility drain’ for my portfolio, but as Phil said, this involves alot of short options – and alot of margin, and is a cool thought in theory, but likely not practical. It would also only hedge your portfolio vega for market volatility, and wouldnt help for single-stock volatility effects youd get for things like earnings.

    3. Buy VIX puts. Hmmm… Correlate IV of each of your positions to VIX and buy VIX puts accordingly. Hmmm… What about volatiltiy of long VIX options ? woudnt this be high and about to deflate too ? This would seem to be what the VIX options would be good for …

    In any case, Phil said that the best position to be in is cash, but Ive been counting on being able to hold my positions and get that premium at august expiration to make me whole again.

    I guess i feel like an animal wriggling to get out of a trap, and looking for ways to escape other than chewing off my leg — Ill certainly do that if need be, but I think a good discussion of alternatives would be educational.

    Yeah… im prone to long posts… sorry…

    Hope everyone has an excellent weekend. Everyones thoughts are welcome !!