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Wednesday Virtual Portfolio Moves

December 5th, 2007 at 9:30 am | Permalink   edit   copy

Well the first thing I’m doing it rolling my QIDs!

BA should be a good one if they start going. RIMM always good for a nice run and, of course, GOOG has been quiet lately but already I’m not excited by the open so far…

December 5th, 2007 at 9:48 am | Permalink   edit   copy

Hey check this out on MA

Buy $190s for $13.80, sell $200s for $7.90 / Buy $210 puts for $14.95, sell $200s for $9 nets out to $12 spent on a $20 spread. It’s complicated but you are risking $2 on the outsides but at $200 you get $20 and I bet it will work nicely as the callers lose value. XXX

December 5th, 2007 at 10:01 am | Permalink   edit   copy

BA call (advance copy): What is wrong with you people? We told you 6 months ago we sold $500Bn worth of planes already and our best year ever to date was $60Bn, what the hell do you think is going to be our outlook. I’m not even talking to you people anymore, just have a donut and go home, you analysts make me sick!

Well, that’s what it would be like if I ran BA anyway…

XOM – DD on $85 puts at .70 XXX

December 5th, 2007 at 10:06 am | Permalink   edit   copy

XOM – best to tee up the $90 puts, now $2.17 to sell against if they jump up. My escape move is A) sell the $90 puts for no less than $2 and then roll to the Jan $90 puts, now $3.30, hopefully for $3 (putting me in for net $3.90)but very happy with $3.20 as it was $4.20 yesterday. XXX

December 5th, 2007 at 10:13 am | Permalink   edit   copy

Still no 13,400.

ETFC – I wouldn’t take any position you can’t recover your cost by selling calls against (ie. only leaps where X amount of short calls at the same strike = your cost) as it could be a long, tough road back for these guys.

ISRG – good call OPT! I’m pretty much keeping my normal 20% of the profit stops on my open calls right now (and on my putters) but if we don’t break 13,400 soon I’m going to get a little more proactive. No 1,480, no 2,650 (well we have it at the moment) also very bad but ISRG is double topping here. XXX

December 5th, 2007 at 10:22 am | Permalink   edit   copy

Financials – good one Dan, WTF with GS at $215.

IMCL making me so happy I sold those calls!

You know the fix is in when oil runs up into inventory like this. 15 mins to inventory but SOMEBODY bought a whole lotta $85 puts and they’re trying very hard to shake them off.

I broke down and paid $1.10 to roll my QIDs from July $40s to July $38s so I guess that’s a top call for me but it’s really because I can still sell the $40s for $1.20 so I look at it as a free roll to a better position. XXX These are painfully thinly traded otherwise I think I would retire and trade nothing but, this is so much more fun than the Qs!

CVX – no, but only because I only have a few CVX and a lot of XOM so I’m just concentrating on one position as I’m likely to have to move it around.

December 5th, 2007 at 10:27 am | Permalink   edit   copy

Really what is the logic to this rally? Yay $90 oil is back, yay the Fed has to cut more to save the economy, yay the dollar is plunging…

BIDU heading down, $360 puts at $11 were $20 on Friday. Risky but fun. XXX if you are prepared to spend $4 to roll them up each $10 if they keep going up until they break.

December 5th, 2007 at 11:07 am | Permalink   edit   copy

Film “Covering at the open was the only thing I did right today” – That’s why Rule #1 is: ALLWAYS sell into the initial excitement. It’s the closest thing to a sure thing in the markets. Of course to follow Rule #1 it is good to have something to sell against, which is why it’s so much better to have some length to your positions for just such an emergency.

MON still making new highs!

AXP and FDX red, not what you want to see 20 days before Xmas…

Rolling my Jan DIA puts up anytime I can do it for .35 per $1. DD on SPY $150 puts at $3.75 XXX

December 5th, 2007 at 11:15 am | Permalink   edit   copy

XOM dizziness – I haven’t been out yet but I will sell 1/2 at .75, which is break even now so I won’t have to register with the SEC for controlling 5% of the stock… Oil at $88.xx again!

SUN is having major troubles, they are more of a refiner than most integrateds so that may be why but I think we’re getting a top to the whole Valero Group, check out the weak-assed bounce this is off a 20% drop since Halloween: http://tinyurl.com/363acj

December 5th, 2007 at 11:30 am | Permalink   edit   copy

Ah I figured out what’s wrong with today, no new highs! Check out this small list: http://www.finwin.com/actives/mostactives.cfm?pageid=7&rowcount=50&id=997

ETFC – most likely you are being flushed but holding a near month position in that stock is crazy as it moves 20% on rumors..

YHOO quite the lame duck.

At least the market is looking up. 1,485 and 2,675 along with 13,450 could actually leave us in a sustainable position but I’m not rushing in to buy index calls just yet.

$25KP – we have 25 Apple calls ($10K) and a $2K loss on the 10 $170 puts, let’s spend $2.30 to roll them up to the $180 puts and keep normal stop outs on the calls. XXX

$25KP GOOG – we have the Jan $660/Dec $650 spread and now is a very good time to spend $28 to roll the caller to the $690s and roll ourselves back to the Mar $690s for $10 but, if you don’t have $38 (x 5 = $7,600) as less than 10% of your virtual portfolio then you can just roll your Jans up to $690s for a $20 credit so the whole thing cost $4K to take your caller $40 off the money. XXX

December 5th, 2007 at 11:37 am | Permalink   edit   copy

$25KP – of course take out the DIA $127 puter with a 90% gain! Rolling the Jan $129 puts up to the Jan $134 puts for + $1.50 and sell the Dec $132 puts for $1.15 if it gets that low but otherwise we can hope for more of a pullback to sell the $131s for $1.30+ XXX

December 5th, 2007 at 11:44 am | Permalink   edit   copy

Mac Bios – thanks, I’ll leave that to tech support staff (Tina) later, it’s behaving for now… Better it shuts itelf off and is fine, if that had been my PC suddenly turning itself off like that chances are I’d be talking to you on my IPhone right now!

MCD not having a good day.

VIX down 10% today, that’s why it’s so attractive to take out putters right now and it also makes it a good time to buy puts if you need to balance the downside. XXX

December 5th, 2007 at 12:10 pm | Permalink   edit   copy

GOOG – I have a $670 caller at $35 with $11 in premium and it will cost me $13 to roll him to the $690s at $23 with $18 in premium, these are smart rolls you should always be looking for when your callers are rallying. You can always roll them back down if the stock get’s too low but rolling him into an additional $8 in premium means you are effectively paying $5 to wipe out $20 of the money (intrinsic value) you currently owe him. XXX applies to all rolls of callers.

Oil continues to go down against the sector, how long can they keep it up? Notice very steep drop in May ‘10 crude contracts actually traded to $71.56 from $79.89 in April ‘10. Nobody is buying those barrels at all so the $84.83 price claimed for the contract is total BS. Even in Nov ‘08 there is a $1.12 discrepancy between the price they are printing and the last price paid. If oil goes red (.36 away) at $88.30 that will be a crushing psychological blow even if they pump it back up later (as long as they fail $90).

XLE Jan $78 puts are $4.78 with a $1.54 premium and you can sell the Dec $73 puts against them for $1.20, leaving you with a $5 + 1 month spread for net $3.58 XXX

December 5th, 2007 at 12:14 pm | Permalink   edit   copy

LOL Keyser seems to have been censored by Apple!

Market is churning up here which means it might be turning soon. Up 177 it’s always prudent to plan for a bit of a drop…

December 5th, 2007 at 12:26 pm | Permalink   edit   copy

AAPL – $175s are $13.25 with $3 in premium, $185s are $6.75 with $6.50 in premium but you are giving up $10 in insurance to gain $3.50 in premium and, assuming you are rolling too, only getting $5 in return for giving up $10 of your intrinsic value so no, I wouldn’t do that because I think Apple could easily pull back and you’re just not getting enough incentive since you can already roll him up to the Jan $185s even, which will only get better as time goes by.

FWLT continues to be the most annoying stock I ever shorted but I think I got them this time with my $1.70 roll to the $155 puts, putting me net in them for $8.35 (now $6.55). If this doesn’t work I will never trade them again (until the next time anyway).

Mac, not a laptop, it’s an IMac, never did it before and it’s on 24/7. Maybe it just wanted some attention (look how much electronic ink it’s getting!).

Yes pot is a very good idea to enjoy this market with… Things may get trippy this afternoon. 8-)

Oooh! Down goes oil, down goes oil!!!

December 5th, 2007 at 12:51 pm | Permalink   edit   copy

 

Why is the Dow up 186?

AIG up 6.6% was way oversold
BA up 2% was way oversold
C up 3% was way oversold
DIS up 1% but still in a downtrend
GE up 1% was way oversold
HON up 2% was way oversold
INTC up 3.6% was way oversold
JPM up 2% not oversold so let’s watch them at $45
KO still laying around.
MMM up 2% was way oversold
MSFT up 3.5% after dropping over 10% this month
PFE up 1.5% also a good indicator if they can break $24
T up 1% but still pathetically oversold
UTX up 2.5% another good one to watch at $77 as they should be much higher
VZ up 1% at critical test at $44 also should be higher
WMT up 2% on the way to the moon I think
XOM up 2.5% on a bad premise, if they hold $90 I’ll have to roll out and sell $90 puts to some other poor bastard.

So huge rally day for the Dow but if you press a spring down far enough it’s going to bounce back. I would have loved this if we took a week to grind these levels out but this is nonsense. That nonsense may continue through the Fed (and maybe after) so BSC is a good upside play with the Jan $100s at $4 and, $RUT Jan/Dec$760s at $13 for the spread since the Decemers are $22 and the Dec $780s are $12 it’s a pretty good risk reward. XXX

December 5th, 2007 at 12:55 pm | Permalink   edit   copy

The energy stocks won’t react to an oil drop unless it fails the 2:35 close. Meanwhile the NYMEX floor finally sprand to life the second oil went negative, my friend says he saw a dozen guys leap up the second it went red to start buying. Seems to me that they didn’t really want to buy but if no one else was going to…

There is nothing going on so far to make me change my mind about the top call. I am going to make a fortune if I’m right as this is the first time in ages I’ve had more than 5 mins from the time I saw a top to the time it dropped 50 points…

December 5th, 2007 at 2:13 pm | Permalink   edit   copy

DIA in the $25KP – got my price so fully covered, it’s not about greed in a spread you need to cover as plan, take risks with naked calls .

BIDU – not as much, we’re holding up pretty well on the whole if we cna close over 13,400 and 1,480 and 2,675 and 9,900 and 420 SOX and 765 Russell then this may be a serious rally. I don’t believe in it deep down but I have to shift more to neutral as I’m not sure.

CME made an ATH. Should be GOOG’s turn next.

Schaeffer – LOL, he was bugging me last week!

RIMM is scary, I rolled down my longs but I’m going to keep tight covers as I’m not sure they’ll recover at this point.

Trading paralysis – waiting is fulfillment. If you want to know what a stock is going to do into expiration, waiting for 5 more days of data is an excellent trick. It’s like my kids think I’m the greatest number guesser because they think if a number 1-10 and I always guess last (because I’m the biggest) and they haven’t figured out that on my first guess (it’s a car game) 2 numbers have been eliminated and on my second guess 5 numbers have been elimated and by my third guess I have a 50/50 chance of being right.

All they know is I usually win the game. That’s because patience gives me a 20% chance of hitting a 1/10 guess (my 3 guesses against 15 open numbers), which is better than anyone else in the family’s odds since we go in age order all the time. Scaling into a position is very much like that. On day one, I’m guessing and I make a small bet, after a day or two I have more data and I roll or add to my position with better information, by my third round I’ve got a pretty good handle on things and I am certainly making a much more informed decision than I made on the first day.

If I make my initial bet and “win” right away, then yay! I won, stop guessing, book the win and be happy. If I add a round (still 1/2 invested or less) and then it goes my way, then yay! I won, stop guessing, book the win and be happy. If I… well, you get the idea…

Still getting churn at this level, not really a break out just yet.

Locking in call profits – well you can turn it into a bull call spread, selling the call above it or you can go out to a longer month and have a current caller pay for it or you can roll up to a higher call yourself like rolling the AAPL $185s at $6 (assuming you started at $3) to the $190s at $4. You take 2/3 of your original bet off the table and you can set a stop at $2.50 to maintain no less than a 50% gain and you can even get fancy (and not be so greedy) and sell the $195s against those for $2.50 which would be taking $4.50 off the table, locking in a 50% gain (out of your 100% gain) and leaving $1.50 of your profits in play with a $5 max upside.

You could also surround yourself with butterflies or condors but that would take hours to go through!

MBI – yeah he’s got a good premium still ($1.50) but you can double that by rolling him down to the $30 puts and you still have great upside protection and, since you are only rolling him straigt down $5 in intrinsic value, you can always roll him back if it breaks up over $30 but, for now, going for the premium is smart as there is no downside for you (other than forking over $3.60 now which you owe him anyway.

Oil still negative!

December 5th, 2007 at 2:17 pm | Permalink   edit   copy

TIVO ATH!

ESRX ATH!

Now it’s looking more like a rally. GOOG cranking, if Apple takes out $185 then we’re poppin but I’m still seeing churn every time we get up here so it’s going to be tricky.

My naked BSC’s are NOT doing much at all.

Oil $87.xx!!!

December 5th, 2007 at 2:37 pm | Permalink   edit   copy

SHLD – anything under $140 is a buy for me (but cover!).

WM – that doesn’t really go for a leap spread as long as you really plan to just roll and sell every month. When you are in a trade like that it really doesn’t matter what your caller does as long as it’s not catastrophic.

Did BA say something about composites today? BOOM, ATI and TIE all having sad days….

GOOG made some IPhone announcement too.

RIMM is a good trade if you are going to sell and sell and sell against it otherwise you will end up never sleeping like DM! 8-)

AAPL could care less about the jobs numbers – the people who need jobs aren’t really their target market. NOK just said Apple is kicking their asses and even the French seem to be buying L’IPhone as it set some kind of record already. I think $210 in Jan is ambitious though, I will be absolutely selling $200s if they get that high.

XOM – Grrrrrrrr. Yes, very bearish but we expected a big run today and we got a big run today and oil is going down like we thought despite an 8Mb draw and DRYS is getting killed on concerns of a global slowdown and only our silly markets think there’s a party going on but we’re not holding our levels, we didn’t earn this gain and it’s just a great big house of cards that can be knocked over with an errant word from a Fed governor.

LDK – I don’t follow them but ask me after hours and I’ll take a look. In principal I like selling the Decembers into this rally, especially with oil failing.

$87.60 at the close for crude!

DNA gets killed today on FDA rejection of Avastin in breast cancer! 5.5 month improvement in life expectancy outweighed by 1.7% increase in mortality. That’s a tough choice if you have late-stage cancer… That’s good for the insurance companies who won’t have to pay Billions for the drug now.

December 5th, 2007 at 2:46 pm | Permalink   edit   copy

Solars failing now – NYMEX failure is bad, bad, bad so let’s keep an eye on SU failing $100, XLE failing $74, XOM failing $90 and SLB failing $95 as very bad signs for that sector.

DNA opportunities – I’m hoping the selling gets overdone as they are still a great company and this is just ANOTHER use for Avastin, not the primary use and I’m actually glad it’s going to force them to try to reformulate it as they’ve been very lazy with it this year IMHO. We had them in the LTP until they got toppy at $80 but I’m loving them if they fill the 2005 gap back to $55.

Have fun Fred, I love that place!

December 5th, 2007 at 3:00 pm | Permalink   edit   copy

Geez, perhaps XOM is finding support from the 5,000 $85 puts today with one block trade of 3,000 around 11! You’ll notice that that trade totally arrested a drop becuase it shows the OptionMonster crowd that someone is makeing a huge bet on XOM going down so they turn around and try to squeeze you. I’m not worried until Friday because everything I expected is happening EXCEPT XOM going down so unless oil goes back up and Iran war talk heats up and the world stops worrying about an economic slowdown and US truck demand heats back up and Al Gore stops getting invited everywhere to act smug, and the Dems fall back in the polls and the crack spreads drastically improve then I don’t mind waiting for the part where XOM goes down…

I love investools stuff and their intro course on looking for breakouts is a valid system and can teach you some good basic charting skills if you need it but that’s all I ever took from them and it took me 2 years to train them to stop calling me to sign up for more classes.

CME – sure $700, it’s so hard not to have a problem with big numbers but I would sell calls, not buy puts as it’s safer(ish).

December 5th, 2007 at 3:27 pm | Permalink   edit   copy

AMGN – the $55s? No, just wait for the premium to expire in a small virtual portfolio otherwise you end up day trading.

GOOG:

Sell $690 calls for $22.30 and sell $700 puts for $21.5 (credit $43.80). Buy $680 calls for $28.10 and $710 puts for $26.60 (debit $54.70). That’s $10.90.

At $690 or lower you get only $10 back. At $710 or higher you get only $10 back but at $690 to $700 you get $20 so your risk is .90 on a possible $9.10 profit and with a little bit of scaling you may be able to bring that risk down to 0! XXX

December 5th, 2007 at 3:45 pm | Permalink   edit   copy

Wow they shoved oil back to $87 after hours. You know they’re in trouble when they feel the need to cheat!

SU puts – not too late and CVX is in a great spot for the $90 puts at $2.33 for a quick .70 on a dip. I’m DD on the $85s at .55 and using them as a pre-roll to the $90 puts.

XOM – selling $90 calls for $2.05 very dangerous but $2.10 is just silly for them to pay.

Investools – I took a half-priced course at the Learning Annex about 5 years ago and it included a year subscription and I just renew every year for I think $600. I like the option charts (with history) and the overviews but that’s all I ever use. I’m sure they have lots of good stuff but I’ve never bothered much as I just like to have to option grid up 90% of the time.

IMCL been going down for days. I feel so bad for my poor $40 caller I will have to take him out for an ice cream…

Have fun with the kiddies KC!

FNM calls – not really, they ran the whole circuit I called for in the morning and I’m selling here (up $1+) as that’s plenty for one day.

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