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Thursday, December 1, 2022


Thursday Virtual Portfolio Moves

December 6th, 2007 at 9:44 am | Permalink   edit   copy



Apple could care less what the rest of the market is doing.

RIMM – another caller I’m going to have to buy a drink for.

I’m just playing with the QIDs this month, they seem to be a great vehicle to sell short calls against but they have serious liquidity issues.

December 6th, 2007 at 9:54 am | Permalink   edit   copy

AMGN – probably flat into expiration but no reason not to improve yourself while it’s cheap. If I’m wrong you’re going to want to roll the caller down anyway so save a step and if it heads up you’ll be happy you improved your delta so that’s one of those win-win-win scenarios.

AAPL – in the $25KP we have $14K in Apple calls and $2.8K in puts (not counting the calendar spread). The question is how comfortable would you be risking $14K in a $25K virtual portfolio naked overnight? The calls have outgained the put losses this morning at better than 5:1 and I’ll roll them up again later if I think I can get another day of gains out of them but I’ll almost certainly shift to more of a strangle over the weekend. Stops on Dec $190s in $25KP should be $5 now – ALWAYS SELL INTO THE INITIAL EXCITEMENT and if your doubt my word, Rule #2 says SELL HALF!

SHLD was a gift by the way as we planned to take out our caller. They are down on retail reports but it has nothing to do with them (they can’t get any worse). You do not change your plan because it’s going better than you thought!

December 6th, 2007 at 10:13 am | Permalink   edit   copy

DNA – I’d wait for the final markdown sale.

Mortgage delinquencies getting worse faster than thought. Prime loans 3.12% delinquent, up 10% THIS QUARTER. Subprime 16.31 up 8% All loans 5.3% delinquent up 10%. Greatest foreclosure levels EVER, highest delinquency rates since 1986 the year BEFORE the housing market collaped. Erin is trying to spin this positive while the guys make fun of her for being clueless.

CompUSA is going out of business as near as I can tell, many store closing in the northeast so if they couldn’t hold on for the holidays, things must be dire. My play on that was CC but that was 50% ago, I don’t think I’d chase them.

You guys might hate me later but I’m taking the Apple calls off the table here in the $25KP as I don’t think $190 goes without a fight and this is a lot of money. XXX In the $10KP We take the $185 off and let the others stay as a bear call.

December 6th, 2007 at 10:17 am | Permalink   edit   copy

Also in $25KP, spent $1.50 to roll up the $180 puts to $185 puts. XXX Will rebuy 20 $195 calls if we break $190, now $3.45.

December 6th, 2007 at 10:32 am | Permalink   edit   copy

The bloat on the FSLR Dec $220s is stunning at $19.60! I like the Mar $185s at $63, selling the $220s to pick up the premiums. XXX

Nat gas down 88Bcf, 8B more than expected, should give a slight rally as it reminds traders it’s winter time. Oil hit $88 but no biggie.

December 6th, 2007 at 10:47 am | Permalink   edit   copy

HOV – I have that too! Why would you pay him a .43 premium? You’ll get the same premium for the Jans whenever you sell them (for the most part) so do your job and be patient while the premium you sold expires. You’ll notice you have gained much more value than your caller – try to enjoy it, treat yourself to a happy meal or something to distract you from starting at a screen (make sure they give you the toy)… 8-)

SHLD call – really Lolobear are you seriously asking me to tell you that if you only have a certain amount of money you should risk it all on a one directional play? Try the Jan/Dec $110 spread for $3 although if I were going to gamble with a limited budget AND I were generally bullish I’d go for selling the the $115 puts and calls for $8.60 and buying the $120 calls for .80 and buying the $110 puts for $4 for a net credit of $3.80 which is a risk of $1.20 with an upside of $3.80 and profitable below $121. Then you would have my blessing to start by buying the calls and waiting a while to sell the $115s as part of that leg of the spread!

December 6th, 2007 at 11:09 am | Permalink   edit   copy

MA – our profit range goes to $210, hard to worry at $205 but what we’re going to do is put stops on the $200 putter at $6 (.60 trailing stop) as we’re almost 50% ahead on him, once it breaks, we’ll look to adjust. XXX

BIDU – not down fast enough is the problem. You need to be patient with these and, as I said yesterday, always look to roll up $10 for $3.50. Moot point now as they crashed and the $360 puts are moving.

FXI puts – almost forgot about them. The Feb $185 puts are $13 and we’ll sell current $180s for maybe $5 on a pullback (currently $3.15). XXX

December 6th, 2007 at 11:30 am | Permalink   edit   copy

FSLR – selling $220 calls, yes, although now you might want to wait for the Paulson rally so don’t overcommit.

December 6th, 2007 at 12:09 pm | Permalink   edit   copy

AAPL starter spread. Jan/Dec is too close and too risky with MacWorld coming. If you like them try the Jul $170s at $40 and sell the $190s for $5, which is net $35 and will be net $25 when you roll to Jan $190s or whatever and net $15 in Feb and net $5 in March and + $5 in April and + $15 in May and + $25 in June. I don’t understand why people try to avoid these nice, mellow plays like there’s something wrong with them… You can risk $12 3 times and you are unlkely to get a better return over 6 months.

AAPL – with respect to Film, I’d be looking at a reentry at about $185 if it holds but I’m not too keen on putting in a lot of cash ahead of Bush/Paulson because the emporer is probably streaking and I may not be the only person to notice it within 36 hours.

XOM – getting very close to taking out the $90 callers and rolling myself up to them so I’m offering to take out 1/3 at $1.50. XXX If you never sold the $90s (and it is clear from the volume that many did not) then you have a .30 loss, which is no big deal but better to roll to the Jan $90s and sell the current $90s for net .75 rather than mess around with 2 weeks to go.

Missed the Dell trade – well you’re lucky, it wasn’t so hot! I like them for MO if they break $25 but today is a surge based on the BBY move, we don’t know if it will follow through.

BTU making ATH – that’s interesting.

ISRG new ATH, CMG new ATH… Now this is a rally!

Meanwhile FMD, which is one of the impacted companies, is at a 52-week low.

I think Apple really needs to break $190 before $185 or they may have some serious issues.

UNH – I like the stock plenty, they just got less interesting to play from an otions standpoint. As you own the stock I assume you have money so the sensible move is to simply roll him up to the $55s right now and take a buck in premium from the guy. If it starts to go down you can always roll him back down (once you gain .50 would be about right) as you literally have nothing to lose to the upside.

December 6th, 2007 at 1:00 pm | Permalink   edit   copy

GS red is really bothering me. BSC sickly too.

Hi Anonymous! SVNT – they’re a small pharma I never watch. I would modify that play to do a March/Dec $15 call spread for $1.10 and a Mar/Dec $15 put spread for $1 on the very excellent chance that you will have a profit by your first roll. That avoids margin and lowers your risk of getting blown out. Be careful because these are pretty thinly traded options with wide bid/ask spreads so the numbers may not be as good as you think.

AAPL Jan $180s – I’d sell the Dec $190s for $5! That’s $5 more than you have now and protects 40% of your call and if Apple goes to $195 you only have to give him his money back (but first you would use it to roll him to the $195s!).

Speaking of $190, Apple’s going for it as the non-reading crowd just found out on CNBC that Apple will be selling things this year. I am really sad because it seems investors are really getting dumber every year…

DIA put rolls are alway frustrating until they pay off at which time you reflect back on how brilliant you were for rolling. If you don’t get filled you don’t get filled, it’s another one of those things where waiting is fulfillment. If you aren’t getting filled it’s because the sentiment is going your way and you don’t need to get filled, it’s when you do get filled that you need to see what’s going wrong!

YHOO – you’re winning, what do you want to do. You came in for .60, the spread is .60 and he will lose money faster than you. If you had the money you could roll him to the $25s for +.95 and roll yourself down for $1.10 as the .15 you are spending gains you $2.50 in position and .65 in intrinsic value. He still has .60 in premium and the roll from the Dec $25s to the Jan $27.50s is net -.35 right now but should be almost even at expiration if you need to do it.

NEM – the 20% rule does not apply to spreads other than if you have a small enough account that that particular trade matters to you then you should take 20% whenever you can until it matters less. We take a spread to sell the premium, there is no point in buying it back unless we have a very good reason to think that our target is off.

December 6th, 2007 at 1:04 pm | Permalink   edit   copy

10-year note heading up, that’s probably good.

Going to cover the upside with the very slow moveing DIA $136s at $1.80 (and I have a ton of BSC calls from yesterday which are doing well). XXX

December 6th, 2007 at 1:20 pm | Permalink   edit   copy

MT – very iffy mid-term but a great company, I like the Mar $75s if you are going to work off your premium selling current $75s.

GOOG spread – Always good for a laugh but not if you only have $25K in your virtual portfolio. We entered when it was clearly oversold at $710 I’m more inclined to short it. The premiums right now don’t lend themselves to a good play other than selling the $710 puts and calls for $35 and covering with $690 calls at $30 and $730 puts at $29 which is net $24 and if anyone can figure out a way you don’t collect at least $20 let me know, the max is $40 back at $710 exactly and you can probably adjust if it goes down.

13 mins to go and the market does not feel right for a rally… I have my calls but I’m out of them fast if we tank here. GOOG $700 puts at $13.50 worth a gamble if you like to live dangerously, get out at $710 and don’t be greedy! XXX

December 6th, 2007 at 1:29 pm | Permalink   edit   copy

BSC stopped me out. This sounds lame, be careful!!!

December 6th, 2007 at 1:34 pm | Permalink   edit   copy

No good, people are bailing as he’s already moved on and there was no meat!

Paulson might save it but GS has been down all day for a reason, they know what’s up.

December 6th, 2007 at 1:53 pm | Permalink   edit   copy

CVX – same as XOM, the saving move is to roll to the Jan $90 puts and sell the $90 puts for net .80.

Well Apple sure liked the plan!

Fab – You want to roll him up to the $190s first and collect that $6 premium if you can afford to “lend” him $14 for 2 weeks. You can roll yourself up too but you want to sell him as much premium as possible.

CFC not liking this after a big run.

December 6th, 2007 at 1:57 pm | Permalink   edit   copy

INTC – if you’re concerned then cover! You have until April and you’re up 50%, if you sell $27.50s you cap yourself at up 75% – wah, wah…

DELL – I can’t figure them out myself.

This is bad – they were counting on a government hand-out and it’s not in this plan so the lenders don’t like it at all. XLF $30 puts for .60 XXX

December 6th, 2007 at 2:13 pm | Permalink   edit   copy

IMCL back from the dead.

There’s a lot wrong right now. The dollar is down becuse they thought we were going to spend money on this thing but we’re not. Oil is up $2, still not $90 but the oil sector is back where it was when oil was $95. In mid-November oil was $95 and XOM was at $84 and when XOM was $95 in mid october oil was at $82 so I’m not buying this move and I’m taking out the rest of my $90 putters here and taking the $90 puts for myself.

December 6th, 2007 at 2:40 pm | Permalink   edit   copy

ISRG – what is it with you guys and wanting to make sure your caller doesn’t get a dime? Did you not make money on your end? That guy is offering you $12 in premium and $16 worth of downside protection and you hate giving him that (not even definite) $4 so much that you are willing pay $5 to take $2 less premium and give up $5 in protection just so you don’t have to worry about paying him a few dollars in case the stock keeps going up???

You guys need to think about what you are doing with your callers. These guys are your partners, they lent you a little money to help you buy your longer contract and all they ever asked for was a share of the profits. You guys are like bad business partners who try to screw the other guy as soon as he leaves you alone with the books! So what if your caller makes some money? Of course you should roll him when it is really necessary but you don’t buy him out in a spike unless it’s absolutley necessary.

Hey, a fun play for all you lazy people.. PGH is a Canadian energy trust that pays 15% dividend (monthly). It’s nice because I think that’s dividend taxed at just 15%. You can buy them for $18 and sell the July $12.50s for $5.60 so you’re in for net $12.40 and still collecting .23 a month with protection all the way down to their ‘05 low. That’s a 13% return in 7 months.

DIA callers – .25 stop, no as I’m in more of a strangle so I’m looking for a huge move. Stops go more for naked calls or things you are intending to work out of.

Wow, XOM going straight up so I can only roll to Jan at this point and hope it stops! The Jan $90 puts are $2.40 and selling the current $90 puts yields $1.30 which will hopefully pay for my roll to the Jan $95 puts if this thing doesn’t stop!

December 6th, 2007 at 3:02 pm | Permalink   edit   copy

RIMM $115s – of course you should roll down to the $105s. I do not approve of 1-month spreads in general as you will often find yourself “uncomfortable.”

Holy cow – we’re testing 1,500, 13,600 and 2,700, that is simply amazing! The NYSE is at 10,000 again and the Rut is 785, only the SOX are doggin at 430.

Sadly oil is back over $90 but at least XOM is curling over after it’s silly run, up 3% in 2 days should inspire some profit taking.

December 6th, 2007 at 3:15 pm | Permalink   edit   copy

AAPL Apr/Dec $170s – he has no premium so you need to roll him. Needed to roll him a long time ago actually… At this point he’s too deep so you need to look to rolling him to the Jan $185s and yourself back to the Jul $185s.

Meanwhile I’m so pissed I let BSC stop me out, I got totally suckered!

Slow down – I get it too but only if I post in 1 min intervals so I just wait a bit. As a habit, I copy everything (ctrl-c) before I hit submit because it does lose comments on occasion.

Speaking of flushes, check out what CFC did before! Now over $12 and a very tempting short.

I see some sellers here but that’s to be expected at these levels.

December 6th, 2007 at 3:18 pm | Permalink   edit   copy

That’s it for my DIA calls, they paid for another roll-up and that’s all I ever wanted.

December 6th, 2007 at 3:44 pm | Permalink   edit   copy

PGH is right, not PGR!!! Thanks. Dividends are monthly and you can roll the caller forever, if they cut the divident the risk you take is the stock diving more than $5 before you can get out.

TOL puts are a great idea here Lolo! Jan $25s at $2.55 XXX

December 6th, 2007 at 3:48 pm | Permalink   edit   copy

Wow it looks like we’re going to hold this massive break-out!

December 6th, 2007 at 3:56 pm | Permalink   edit   copy

Fab – sure do 2 then 3.

HOV – wow did they fly up. This is my when in doubt do nothing mode. Do you really want to give up all your protection tomorrow so you can wait and see how the market wants to treat you over the weekend?

December 6th, 2007 at 3:59 pm | Permalink   edit   copy

AAPL – if we keep going in the morning we’ll need to pick up the $195s!



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