Archive for 2007

Virtual Portfolio Review / Jan 28th 2007 / EOG – INTC

EOG (2/1) – This one is bad!  While trading at 3x early ’04s level ($22),

They are projected to earn .98 for Q4, down 50% from last year but the year should come out at $4.83, down "just" 10% from ’05 when they peaked out at $80.  It’s all about how much they hedged gas production and how much they had to cut that production along with the CHK cartel to stop the price of gas from slipping back below $5.

While the GS/MS "interest" in Dominion’s $5Bcf reserve and 217Kb of oil is purported to be $15Bn (highly unlikely), EOG has a $16Bn cap with 5.5Bcf and 106Mb of crude.  Sounds like they are just about maxed out on value then doesn’t it?

Clearly EOG’s best quarters seem to be behind it with Q1 at $424M in net on $1.1B in sales but Q3 netted just $297M in profits on $968M in sales.  Against a revenue reduction of $116M cost of revenue rose $6M while SG&A climbed $7M and the dreaded "Other Expenses" jumped $39M while A/P went up a massive $180M against flat recievables and (funny story) inventory climbed $41M to $117M – more than double last year’s level! 

At least they bought back $370M worth of stock so far this year, that’s roughly 10% of all trades to keep the stock flat this year – well, down $10 but who’s counting?  All this has been very painful and Net Cash Flow is actually negative for the year (-$48M but who’s counting).

I may have been premature with my call but these guys are going down so I’ll be repositioning these to March and hope for an early spring!


FDX (3/21)-  This is turning into a terrible spread!  We have the July $120s that are down 20% and the April $100 puts that are down 18% and the earnings aren’t until 3/21 so I think I simply forgot to sell Febs as there is no reason not to have….  The good news is we can sell the March optons as they expire on the 16th but you still get overpaid for earnings by people who don’t realize they expire before the end of the month (sad but true).

If I had to guess, I’d say I played it right on the whole, they’ve gone down since we bought them (12/18) and should bottom out right about the…
continue reading

Virtual Portfolio Review / Jan 28th 2007 / APPL – DOW

Duck and cover or cut and run?

I’t’s time to review our virtual portfolio and the markets to see if we still like the stuff we have.  I’ll do a market reveiw for the Monday open but right now, let’s see where we are with our open picks:

AAPL (.78, up 46%) – I’m not going to waste time talking about how great Apple is (that’s Reinharden’s job!) but COME ON! – 2005 EPS $1.58 on $13.9Bn in sales, 2006 EPS $2.27 (+44%) on $19.3Bn (+38%) in sales, 2007 projected EPS $3.21 (+41%) on $24.28Bn (+25%) in sales, 2008 projected EPS $3.77 (+17%) on $30.56Bn (+25%) in sales…

Oh no, get me out of this stock! 

First of all, we just had a 46.2% earnings surprise in Q1 ’07 of $1.14, vs. .78 expected.  Qs 2-4 last year were $1.62 so if they have zreo growth for the rest of the year that’s $2.78 out of $3.21.  The forecast calls for the last 3 Qs of this year to grow to $2.07 (27%), just 60% of the first quarter’s growth rate.  Had Apple gone up to $107 on that news, I’d be concerned but going DOWN to $85 put them on my BUYBUYBUY list!

The assumption in the projections is Apple’s sales growth will drop in half over the next 24 months and their EPS growth will drop by 2/3.  I’m pretty sure you can arrest Jobs, put a crown of thorns on him and make him walk down the streets of Seattle with a giant Zune strapped to his back and the rest of the desciples would still figure out how to grow the company more than 17% in ’08.  Perhaps they plan on feeding Apple users to the lions?

I Added the July $85s but I will sell calls against it fast if it turns down any more.  We could see a push down to $75 before this thing really turns and we need to cash out and either go very long or wait but, no matter what, don’t enter a position on this stock you can’t double down on twice as Apple bashing is the official sport of Wall Street right now.

So my July $100s are a DD when it turns but the Apr $100s are toast and I’ll be happy to get $2.50 back.  Meanwhile, that $499/$599 pricing is not subsidized – Apple isn’t allowing subsidies!  In…
continue reading

Announcing the Great Phil’s World Book Project!

Thanks to Jared and Options Sage we are now about to embark on a grand and experimental adventure aimed at writing the best options guide ever!

Sage has written a great guidebook already and our idea is to take this to a whole new level by adding specific trades that we make throughout the year as example and incorporating ideas and advice and true stories from our members who, as any comment reader knows, are some of the sharpest traders you’re likely to come across.

We want to make something that is engaging, exciting and (if we have any room left) useful – much like I kind of hope this column is on at least a once-in-a-while basis! 

This is a very exciting project and is likely to be the first of many and we are looking for your advice on how to make everything as useful as possible.  Let’s keep in mind this is book 1 and will be more of an overview so we’re looking to make sure we cover the basic strategies but feel free to make ANY (don’t hold back) comments and suggestions under the appropriate chapter in the new  education section.  If you read a chapter and have an experience you would like to share – feel free to leave a "confessional" which we will feel free to include in the book!

We will do our best to give proper credit to everyone involved and hopefully we will all be able to point our friends to a best seller list and say – "Yeah, we wrote that!

You guys will be there for all the editing and rewriting as we move this book through the process and I want to make is a nice communal effort as I know that many of you have a lot to say and a lot of really great advice for new investors.

Needless to say that the book is (until published) for members only, especially the new one.  We will be allowing non-members to purchase the version you have access to now and we will be setting up a regular educational component where OptionsSage will be dispensing weekly advice and we will try to select a trade to make that highlights a trading strategy each Monday and follow it throughout the week.

We have also added a tab called "Intraday", where you can view all the portfolo moves as well as a section for…
continue reading

Weekly Wrap-Up


We need this market to do something.

Options plays require some volatility and going up 100, down 100, up 50 down 50 is not the kind of volatility we want!  It would be fine if the market stayed in the tight little range it's gotten itself into as we can reposition and move to more of a stock picker's market (which I actually prefer as fundamentals tend to win out) but it's a very painful transition for us to shift our virtual portfolio to begin tracking micro, rather than macro trends.

The week went out with a whimper but, on the whole, we are glad it didn't end with a bang as we were all ready for a big one (and not the cool, creation of the universe kind of Big Bang, more like the awful, horrible, everything blows up in your face kind!).  Unfortunately, we were so ready for it that we took a lot of new put positions that, so far, are not doing well.

We closed out just 22 positions this week with an average return of "just" 44% (we are so spoiled!) over 16 average days held.  I called for our third position reduction of the month on Thursday so many of the remaining spots are placeholders (very small positions) but my attempts to fully stop out were thwarted by some very lackluster movements in the market.

We had 8 losers (AXP, CHKP, GE, GOOG, HPQ, JOSB, SU and VLO) but no wipeouts (those are all still open!) and 14 winners, including doubles from AA, CY, LVS, T and YHOO.

Our only successful puts were LVS $105 puts (up 114%) and GOOG $470 puts (up 13%) while the rest were calls taken off the table.  Since I was stopping out on pullbacks though, we may have a more interesting week next week as usually things are more balanced.

We still have 68 open positions and they are almost evenly divided between puts and calls, insuring that we will neither make nor lose too much UNLESS the market does nothing – in which case we lose on both sides!  This is a very real danger we need to face up to next week and it will be time to either fold 'em or roll them so…
continue reading

Secrets to Explosive Stock Market Profits: Section 1

In section 1, I introduce the book, provide some basic thoughts on the usefulness and importance of options, and give an overview of spread trading.

NOTE FROM GREG – This book has been replaced by Sage’s new book which can be viewed on-ling HERE.

As always, comments are very welcome, and appreciated.

Secrets to Explosive Stock Market Profits: Section 2

In section 2, we delve deeper into the key concepts of options trading, including: puts, calls, the options chain, and other important terminology.


NOTE FROM GREG – This book has been replaced by Sage’s new book which can be viewed on-ling HERE.

Secrets to Explosive Stock Market Profits: Section 3

This third section shows how you can use options to practice low risk / no risk trading.  Eliminate fear by using protective puts to secure profits, and eliminate greed by using covered calls to generate profits safely.

NOTE FROM GREG – This book has been replaced by Sage’s new book which can be viewed on-ling HERE.


Secrets to Explosive Stock Market Profits: Section 4

Section 4 explains some of the bread-and-butter strategies used in options trading – spreads that allow you to profit in any market trend:

  • bull and bear call spreads
  • call calendar spreads
  • bull and bear put spreads
  • put calendar spreads

NOTE FROM GREG – This book has been replaced by Sage’s new book which can be viewed on-ling HERE.

If you have any questions or comments about this section of the book, don’t hesitate to leave them below.

Secrets to Explosive Stock Market Profits: Section 5

In the fifth section of this book, you’ll find some advanced option strategies, useful for capturing profits and managing risk, including:

  • straddles
  • strangles
  • ratio backspreads
  • butterfly spreads

NOTE FROM GREG – This book has been replaced by Sage’s new book which can be viewed on-ling HERE.


Secrets to Explosive Stock Market Profits: Section 6

Section 6 is all about making you a better stock picker.  And I don’t play favorites: this section discusses both fundamental and technical analysis, and even has a chapter on sentimental analysis.  Not to be missed.

NOTE FROM GREG – This book has been replaced by Sage’s new book which can be viewed on-ling HERE.

All you accountants, chartists, and market psychologists out there, let me know what you think!


Zero Hedge

Johns Hopkins, Bristol-Myers Face $1 Billion Suit For Infecting Guatemalan Hookers With Syphilis 

Courtesy of ZeroHedge. View original post here.

A federal judge in Maryland said Johns Hopkins University, pharmaceutical company Bristol-Myers Squibb and the Rockefeller Foundation must face a $1 billion lawsuit over their roles in a top-secret program in the 1940s ran by the US government that injected hundreds of Guatemalans with syphilis, reported Reuters.

Several doctors from Hopkins an...

more from Tyler

Phil's Favorites

This Is The One Chart Every Trader Should Have "Taped To Their Screen"

Courtesy of Zero Hedge

After a year of tapering, the Fed’s balance sheet finally captured the market’s attention during the last three months of 2018.

By the start of the fourth quarter, the Fed had finished raising the caps on monthly roll-off of its balance sheet to the full $50bn per month (peaking at $30bn USTs, $20bn MBS, although on many months the (balance sheet) B/S does not actually shrink by this full amount which depends on the redemption schedule) and by end-Q4 markets also experienced some of the largest volatility and drawdowns in nearly a decade.

As Nomura&...

more from Ilene


The Competition For Capital Has Made Stocks Cheap

By Michelle Jones. Originally published at ValueWalk.

The new year is upon us, and now is the time many investors look at what 2018 was and prepare for what 2019 might be. Recession jitters are starting to pick back up again, especially now that the full picture of 2018 is in the books. But what if you could pick only one theme for 2018? Jefferies strategist Sean Darby and team have a suggestion which is especially timely given that it appears to mark the end of an era.

StockSnap / PixabayVolatility carries into the new year

This past year was one of extremes, and the markets ended i...

more from ValueWalk

Kimble Charting Solutions

Stock declines did not break 9-year support, says Joe Friday

Courtesy of Chris Kimble.

We often hear “Stocks take an escalator up and an elevator down!” No doubt stocks did experience a swift decline from the September highs to the Christmas eve lows. Looks like the “elevator” part of the phrase came true as 2018 was coming to an end.

The first part of the “stocks take an escalator up” seems to still be in play as well despite the swift decline of late.

Joe Friday Just The Facts Ma’am- All of these indices hit long-term rising support on Christmas Eve at each (1), where support held and rallies have followed.

If you find long-term perspectives helpf...

more from Kimble C.S.

Digital Currencies

Transparency and privacy: Empowering people through blockchain


Transparency and privacy: Empowering people through blockchain

Blockchain technologies can empower people by allowing them more control over their user data. Shutterstock

Courtesy of Ajay Kumar Shrestha, University of Saskatchewan

Blockchain has already proven its huge influence on the financial world with its first application in the form of cryptocurrencies such as Bitcoin. It might not be long before its impact is felt everywhere.

Blockchain is a secure chain of digital records that exist on multiple computers simultaneously so no record can be erased or falsified. The...

more from Bitcoin

Insider Scoop Explores Strategic Alternatives, Analyst Sees Possible Sale Price Around $30 Per Share

Courtesy of Benzinga.

Related 44 Biggest Movers From Yesterday 38 Stocks Moving In Wednesday's Mid-Day Session ... more from Insider

Chart School

Weekly Market Recap Jan 13, 2019

Courtesy of Blain.

In last week’s recap we asked:  “Has the Fed solved all the market’s problems in 1 speech?”

Thus far the market says yes!  As Guns n Roses preached – all we need is a little “patience”.  Four up days followed by a nominal down day Friday had the market following it’s normal pattern the past nearly 30 years – jumping whenever the Federal Reserve hints (or essentially says outright) it is here for the markets.   And in case you missed it the prior Friday, Chairman Powell came back out Thursday to reiterate the news – so…so… so… patient!

Fed Chairman Jerome Powell reinforced that message Thursday during a discussion at the Economic Club of Washington where he said that the central bank will be “fle...

more from Chart School

Members' Corner

Why Trump Can't Learn


Bill Eddy (lawyer, therapist, author) predicted Trump's chaotic presidency based on his high-conflict personality, which was evident years ago. This post, written in 2017, references a prescient article Bill wrote before Trump even became president, 5 Reasons Trump Can’t Learn. ~ Ilene 

Why Trump Can’t Learn

Donald Trump by Gage Skidmore (...

more from Our Members


Opening Pandora's Box: Gene editing and its consequences

Reminder: We are available to chat with Members, comments are found below each post.


Opening Pandora's Box: Gene editing and its consequences

Bacteriophage viruses infecting bacterial cells , Bacterial viruses. from

Courtesy of John Bergeron, McGill University

Today, the scientific community is aghast at the prospect of gene editing to create “designer” humans. Gene editing may be of greater consequence than climate change, or even the consequences of unleashing the energy of the atom.


more from Biotech

Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...

more from M.T.M.


Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.


This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...

more from OpTrader


Free eBook - "My Top Strategies for 2017"



Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:


·       How 2017 Will Affect Oil, the US Dollar and the European Union


more from Promotions

About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>

As Seen On:

About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>