Downside – I’m still following mattress play rules of course although I wish I hadn’t cut off my August puts yesterday as they would have been great this morning but I’m around 80% cash and carrying the September AND August puts was overkill and dangerous going into my vacation.
FAF is driving LFG and FNF further south!
EOG Sept $75s at $2.50 are cheaper than yesterday, not a bad play to make. XXX
CYCL – this is another good one to own and sell calls (7% return on sept here) as they are a solid long-range outlook but who the hell knows what mid term. Mar ‘08 is the furthest out you can go and $1.50 for the $10s (15%) is a bit much but, on the other hand, you can buy the stock for $9.81, sell the March calls for a net 8.31 basis and, if you get called away at $10 that’s 20% for 7 months – you could do a lot worse in this market. When you enter thinly traded issues like this it is best to just buy maybe 500 shares at a time and see how long it takes to sell leaps before committing to that strategy. XXX
Hurricane outlook reduced! Oil falling fast, very good time to think about our hurricane plays.
Options trading in July was up 72%, a new record, I think we may have contributed a point or two on the mattress plays alone! OXPS Mar $27.50s are $2.17 and you can sell the Aug $27.50s for .30 (but I’d wait for a bounce) XXX
PCLN – I decided to risk my Oct $75s into earnings but my basis is just $1.45 on 10 so not exactly betting the farm. SINA/BAY – that’s an interesting trading pair! Big Pharma is getting hammered and BAY looks attractive here but so did PFE last month! SINA falls under my don’t bet on China ADR rules, which I often break and would consider doing for this one as I think they are in just the right place at the right time. Maybe the Dec $50s for $2.47 against 3/4 the Sept $45s at $2.42 as it will take a 10% move to cost you money on the short side and you are in for net .60 if the stock gets the earnings reaction that 9 out of 10 stocks are getting the past 2 weeks.
IMB – nothing in that sector is safe until housing turns around (could be a while!).
$10KP YHOO – I’d roll down to the Oct $25s for +.60 and let the sale of the Aug $25s pay for as much of the roll as I could, now .23 but hit .45 Mon and Tues (where I regret not selling them myself!). If it doesn’t spike up in a couple of days, then you can still get $1.10 for selling 1/2 the $22.50s which is a good premium burn you can roll to Sept (either more $22.50s or 2X the $25s) whenever you feel like it.
JOSB – I had rolled my Octs down to the $35s (basis now $6.20) and sold 4 Aug $35s for $3.80, which worked out pretty well so far. At $45 still, I would roll back to the Jan $35s for $4.05 and sell the Oct $35s for .80 (or the Sept $35s for $2.12 if you don’t have $1,400 for the Aug roll) as that would give you 3 more months and two earnings to catch up on this pretty high premium stock. XXX
BSC – I worked out when they first had this trouble that $110 was about as much as they would sell off so $100 is a buy to me but if they flatline here or head down the real play is to just go after whichever brokers haven’t joined the drop yet!
RIMM – thank goodness as I have those naked Jan ‘09 $300s! (I use them to sell close calls against, like pretty soon here…) Odddly, I have a better than 50% gain on those silly things (7/6 entry) and I totally don’t believe in them! The $230s which I just bought back yesterday are already tempting for a resell at $6.50.
Nice Rally – it’s like they are trying to make sure I can have all the index calls and puts that I want as cheaply as possible! If we go up $100 from here I’ll have a $135 Oct call/Sept put squeeze on the DIA – how nice will that be?!?
NEM – they are unhedged and gold is going up. Why they are not being rewarded for that is beyond me but I went back in the Mar $45s, now $3.20 as a disaster cover but I still like ABX as a value play (rolled huge profits to the Oct $35s) although GG is very attractive down here too and I like the Jan ‘09 $30s at $3.95 and waiting until after earnings (8/9) to sell against them. XXX If earnings go poorly, I’d be pretty happy to roll down to the $25s and DD there.
