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Friday Virtual Portfolio Moves

December 7th, 2007 at 9:47 am | Permalink   edit   copy

DUG – I’m dumbfounded that it’s this low. I’ve been considering it but it’s another thinly traded issue. it’s an ultra-short that leverages the downside of XOM, CVX, COP, SLB, OXY, MRO, VLO, DVN, HAL, RIG and others but the top 10 are 62% with XOM, CVX and COP making up 43% of the holdings. I like them because you don’t have to go short, you can pick up the July $38s for $7.20 and sell the Dec $40s for $2 or better, that’s a pretty good spread with the stock at $38.80 and you can pick up another $1 by rolling down to the $39s if it goes the wrong way on you. With those kind of premiums and 7 months to sell, I really like the idea, epecially if they give up another $1.

GS – you are so screwed if that goes the wrong way! What are you people thinking with these vertical spreads? Roll yourself down to 3 $195s if you want to stay vertical, that way he pays the premium and you can roll him down $10 more if GS keeps going down. I would personally go with 3 Jul $220s and then you can roll yourself and the caller down if it drops as it only costs you $5 to roll down $10, about the same as your caller would pay and, rather than selling him once and praying your price holds, you can make 6 more $10 sales against your $30 position.

December 7th, 2007 at 9:51 am | Permalink   edit   copy

AMGN – Now what? Yet another caller I have to send flowers too! For the $10KP, let’s spend $1.40 to roll to the Apr $52.50s and offer to buy out our caller for .50 and we will sell Dec $52.50s IF IF IF we break below $53 (and not for 30 seconds!).

FWLT at ATH!

December 7th, 2007 at 10:03 am | Permalink   edit   copy

IMAX – damn I forgot about them, I used to play them all the time, they are worth $9 easy. Nothing very attractive now other than the Jun $7.50s at $1.25 and selling the $7.50s at some point, now .25 XXX

December 7th, 2007 at 10:57 am | Permalink   edit   copy

MA – just because they weren’t directly downgraded they are going up? We’re going to take out our putters today and maybe do another roll but taking out the putters is a must so tight stops on them as we’re way ahead. XXX

AMGN – must have filled by now? If not, it’s close enough to take.

FXI – I’m not risking that nutball market over the weekend, it’s always a crap shoot with them. I ended up in the $195 puts ($3.50 rolls) which are up 20% from my basis and, unless we really tank, I’ll take them off the table and wait for the next time they get overbought.

RIMM – will do what the Nasdaq does, they’re not a leader anymore. $106 is their make or break.

AMGN – OK, this is why I hate setting targets, that doesn’t count as they held $52.70 very nicely but now we can watch this line and really cover if they fail here as they have had their chance to consolidate and blew it.

December 7th, 2007 at 11:10 am | Permalink   edit   copy

MA at ATH!

MrN – yes on AMGN and any roll-down strategy. Let the callers pay for your rolls and of course the last caller will “burn” you but, as long as you have length, it is well worth it as you end up in great position for the next 6 guys.

GOOG $690 spread – look back at the last two expirations and tell me what you think. Effectively you have a tiger in a box and you can put your hand in on one end or the other, don’t ask me to tell you where the tail is right now. The $690s still have $9 in premium and if you roll them up $20 at a cost of $14 to you they only have $15 in premium but you gave up $14 in protection. Leave the tiger alone!

BA and TIE on the march, BOOM doing well too so ATI looks cheap. Apr $95s are $11.15 and hopefully we’ll be selling Dec $100s for $3+. XXX

December 7th, 2007 at 11:37 am | Permalink   edit   copy

IMCL – You’ve got to be glad to be ahead at this point so lighten up before they change their mind or do the non greedy thing and sell the Dec $45s for .85 as you really can’t be too upset if you have to pay them back at $45.85 in 10 days.

AMGN – when I said must have filled I meant buying out the caller, sadly now we have to sell the $52.50s and just take our lumps if it bounces. Set a .25 stop on 1/2 to the upside. XXX $10KP

MA I have a bunch but it’s the $200 putter I’m taking out, now $3.80 and I’ll stop him out if we fall below $209 but I’m offering $3 right now.

This looks so much like the Hang Seng’s morning it’s scaring me!

FWLT – Just go long whenever I short them and you will be living Trump style in no time!

XMSR – I was just contemplating a DD on that one. We’re up $360 out of a potential $3,300 so I’m not willing to cut and run just yet but let’s say that any day we don’t go up another $150 should concern us.

Yev – Hope is not a strategy! They still have $3 in premium, not much but it’s $9K to collect. I really hate that you have Apr $200s as you are in a losing game with your callers. I would spend $4.50 to roll down to the Apr $190s, spend $8 to roll the Jans out to Apr $190s and use the margin you’re wasting to roll the $180s at $13 up to the $190s at $6 as you can roll them to the Jan $195s at $11 when you’re done which is $18 of collections on your $24 calls and you’ll still have Feb and March to sell.

NetJet – I can buy my own card if XOM would DIE!!! Totally taking a joy ride with the kids asap if I get that… Maybe we can get the pilot to do a roll!

Oh here’s Santelli talking about the rates hiking up despite the Fed “easing”

FXI – you are right on target with the May/Dec spread, why move it? Only if they move down enough for you to get a cheap roll should you consider allowing your caller to improve his position.

CROX – yes I think they can go through it but I’ve got mine covered too, just take the premium and be happy but make sure you have length.

December 7th, 2007 at 12:38 pm | Permalink   edit   copy

ISRG gone wild!

20 Apr $180s – well that’s MUCH better! Same thing though, just leaves you in better shape.

AMGN – you can’t change your mind about a cover just because you get a weak bounce. It is better to be covered than not, if you can get that as your overriding attitude you may never be be a big home run hitter but you will increase your batting average substantially.

There are 100 people in the 100-year history of baseball who hit 300 home runs yet there are only 26 who made 3,000 hits. 300 home runs is only 1,200 total bases but 3,000 hits is NO LESS THAN 3,000 total bases, probably 5,000 on average. Learn to be a good singles hitter and you can make 20% 5,000 times as opposed to making 80% 300 times. Also, most of the big home run hitters are also the all-time strikeout kings, not at all the case for the guys who just go out there to get a hit…

Watch out here, oil could start dragging down the market. It’s GS $220 again as the critical indicator but I’m seeing a lot of weakness, even FWLT stopped going up!

 

December 7th, 2007 at 1:42 pm | Permalink   edit   copy

Edro – I don’t even know what that is anymore! Anyway, roll yourself down to the $180s for $14 (+$12) and roll the 2 $175 callers at $18 to 3 $185 caller at $10 (+6) this cost you nothing as you have $20 in margin but it flips your relationship where he has all the premium and you are deeper in the money. On the puts, you can leave them as weekend protection or you can sell the $180 puts as you don’t need more than $5 in protection against the other play.

FSLR – if you read back every 20 mins or so on Yahoo you will see the same message all the way back to ‘05. I’m sure someone is calling the top at similar intervals, that way they get to link to their brillaint call from somewhere else later!

FWLT – I rolled mine to the $160 puts, now $2.95 and did a DD there but really I’m not the one to be dispensing FWLT advice as I’m pretty sure they’re out to get me! Their p/e is 50% higher than their peers but this seems to bother no one.

ATI – I didn’t get any, my Esignal went down and it’s killing me!

QID – I’m risking it over the weekend unless we have a big finish.

FWLT – now you know why I swore off it Courtney!

XMSR – will it close in 11 days? I hope not!

FSLR is like a random number generator, asking why it’s up or down is pointless. I just sell calls or puts whenever it moves $20 and I take my lumps when I’m wrong but mainly I take these guys to the cleaners.

Thanks Greg!

Dan – the LTP is my favorite strategy, that’s why I’m going to start a hedge fund with it. I don’t mind playing with my money but I’m taking my own baseball advice and just going for a good, reliable average with as few strikeouts as possible. My understanding is that, with hundreds of millions of dollars at stake, investors are quite pleased with returns in the .333 range and any of you guys who’ve been here a while know that we can probably do that each quarter, yet alone a whole year.

HXL – I don’t like the markets enough to be rolling everything that’s $1.50 in the money, you can if you want but then the question is how much protection are you giving up. I’m playing for a 300-point drop next week or expiration week and, if we don’t get that, I’ll be cashing out a lot of calls ahead of the holiday and waiting until January to redeploy because I see nothing here that makes me want to pay $165 a share for FWLT or $208 for MA or $91 for XOM. So, if I see things in various sectors I think are ridiculous, I have to think that there may be an overall issue, not just with the stocks I don’t like. I at least want to see the Hang Seng recover from it’s 1,200-point, 4 hour drop before I go crazy witht he buys.

December 7th, 2007 at 2:04 pm | Permalink   edit   copy

MA – oh, I forgot about them. I’m out at $3.30 in the end and it made a huge mess of the complex spread virtual portfolio. I have $200s sold short against 1/3 the $190s and 2/3 the $190s and, if anything, I will roll them up to the $210s and roll my $210s up to the $220s but I’m not going to do that just yet as I don’t see how MA could have escaped a sector downgrade unscathed.

Oil so ridiculous. It’s totally retraced yesterdays gains yet the oil companies are holding their gains. Talk about being completely removed from fundamentals! Can you imagine gold or copper trading like that? Even Apple reacts to IPod margins and units sold but not energy stocks, they just trade at whatever BS price the funds want to print… It’s interesting because GS is still the only broker to downgrade energy so this could be an us against them kind of battle and may be why GS is trading down as advising all of your clients to sell at an interim bottom is not very good for business.

December 7th, 2007 at 2:41 pm | Permalink   edit   copy

How many people followed through with yesteray’s plan to buy AAPL $195s for the $25KP today? Only if you did buy them, should you be rolling the 10 $185 puts up to the $190 puts for $1.45. XXX that puts us 2:1 bullish into the weekend and that I don’t mind letting ride but no more than 20 $195 calls against 10 $190 puts.

December 7th, 2007 at 2:48 pm | Permalink   edit   copy

HOV – roll yourself up to the Jan $10s at .93 and sell the $10s for .43 so you get $1.75 off the table, THAT locks in a nice profit and gives you a good upside.

ATI – If you’re doing the spread then you’re caller went up too and it should even out.

Hard Rock – sounds cool to me! Dinner at Nobu for sure…

December 7th, 2007 at 2:55 pm | Permalink   edit   copy

Interesting – does the VIX signal a drop? Here’s the VIX breaking out of a channel at 20.75, if it hits 21 it has clearly broken up but the market is still flatish. Take a look and see what you think. 12,635, 1,505, and 2,704 with the VIX at 20.74 now…

December 7th, 2007 at 3:29 pm | Permalink   edit   copy

OSTK says business looks to him like we’re heading into a 1929-type disaster but then again he also blames “sith lords” for causing his stock to fail…

AAPL Apr/Dec – Sure you should, at this point you should sell the $195s for $5.57 as that’s $5.57 of pure premium to collect but you defer collecting on the other $20 you owe the guy for a while.

BTU jusr broke ATH but they’ll be a great short when oil breaks (if ever). I’m actually fascinated by the cheapness of the current $55 puts at .25 as it was trading at $55 on Tuesday and we have 2 weeks left.

DO – the difference between DO and XMSR is that XMSR will have a tough time breaking the channel while DO just moved $10 in 2 days.

December 7th, 2007 at 3:35 pm | Permalink   edit   copy

Check out the VIX gap up on the 1min chart through my target. The VIX bottomed and turned up at 3:14 and the Dow fell off it’s high 1 min later. When I have a fund I am going to have so many cool charts running on huge screens!!! 8-)

December 7th, 2007 at 3:46 pm | Permalink   edit   copy

BXP $100 puts $1.50 XXX

December 7th, 2007 at 3:50 pm | Permalink   edit   copy

AXP Apr $55s at $5.90 XXX

December 7th, 2007 at 3:56 pm | Permalink   edit   copy

BTU – thanks Scott, I didn’t notice but that’s why I wasn’t buying, seemed wrong…

HOV – yes see earlier comments. I think we decided the 2x roll was best.

AAPL – call me a wimp but I’m out of 10 $195s at $5.50 at that’s $2 I may not see again! So that’s those 10 and 10 $190 puts remianing in the $25KP, a good basis for a new buttefly next week! XXX

December 7th, 2007 at 3:59 pm | Permalink   edit   copy

BXP – I filled at $1.50, that price is gone now but I think our activity spooked people!

FSLR screaming – yes, that is often my reaction to that damn thing!

HMY – I always like them on fundies but I like them less at $10.80 than I did at $9.50 but still good.

December 7th, 2007 at 4:01 pm | Permalink   edit   copy

AXP – sorry I already had it and had just taken out some callers but that was the reading on my own calls. I had been watching it today as those callers had smoked me and now they were 50% off so I was hitting the first layer of stops on them and it occurred to me not everyone was in that one.

 

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