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Thursday Thump – For Exxon!

XOM missed!

I cannot tell you how happy I am about this because it means the world still makes sense, fundamentals ARE real and you can't just make a stock go higher by mindlessly pumping money into it.  Profits were, of course, monstrous at $10.9Bn, but costs are out of control and they missed by .08 out of $2.12 expected despite Q1 oil averaging 10% more than Q4, when they made $11.7Bn on a 30% boost in oil prices from the previous quarter.

To be fair, XOM did spend a whole extra $1.2Bn on capital and exploration costs than last year, this is very nice of them as we (the consumers) gave them $116Bn (up $32Bn), which they claim they use to look for oil while shareholders bought $92Bn worth of XOM stock in Q1, expecting them to use some of their money to make those shares more valuable in the future.  ""Higher crude oil and natural gas realizations, driven by record worldwide crude oil prices, were partly offset by lower refining and chemical margins, lower production volumes and higher operating costs," Exxon Mobil said."

So they took in $32Bn more than Q1 '07 (up 38%) and made just $1.7Bn more (18%), sounds like diminishing returns are kicking in pretty hard at XOM!  Production was 5.6% LESS than last year and one of the reasons they list is (and I kid you not!) "OPEC quota effects."  That's right, XOM is effectively a member of OPEC and abides by their rules and has cut off your oil supply in order to support ridiculous prices.  Isn't unregulated capitalism wonderful?

In fact, upstream earnings from the exploration and production unti were UP $2.7Bn to $8.8Bn (up 30%), it's their single largest profit center YET THEY REFUSE TO EXPLORE AND PRODUCE IN ORDER TO JACK UP PRICES! 

Another stupid, non-productive investment made by XOM was, as usual, the purchase of their own stock.  In order to keep up the pretense that they aren't totally incompetent and driving a once-great American coroporation into the ground, the board repurchased $8Bn worth of their own stock in Q1 alone!  That's out of $92Bn worth of total transactions at an average cost of $88 a share, close to 1/10th of all transactions!  What will happen to this company when they run out of money to buy back stock?   They spent $32Bn on their own stock last year as well, jacking the price up from $75 to $95 while not looking for oil. 

I'm not the only one fed up with this nonsense – Rockefeller family members, the oldest continuous shareholders in Exxon, added their names to a shareholder resolution to separate the chief executive and chairman roles at Exxon, and called on other shareholders to join them. While family members praised Rex W. Tillerson, they concluded that an independent board chair remains "key to Exxon Mobil's future."

OK, enough about Exxon, they are done and I wish I had kept those damn puts but we still have our XLE puts that should do quite nicely as well as our CVX puts, which may be a goldmine when they report thanks to GS herding their sheep into the stock all week as we shorted and shorted them! 

Asia was mainly down this morning as India faces a labor shortage that is slowing the economy and the BOJ painted a gloomy picture for the year's outlook.  Asia may sell in May and go away, leaving a lot of money to fly into the US markets this month.  Europe celebrated May day by being mainly closed as workers staged protests against rising food and energy prices leading to riots in Germany and Turkey.  Viva la revolution I say!

The British Airways/CAL talks that we bought CAL on the rumor of are now official but we took a double and ran on our June play yesterday.  The BOE says that banks are overstating their losess.  As they say in the Rocky Horror Show:  No sh*t Sherlock!  Maybe some clever government official in this country will figure this out as well….  ROFL!  You didn't think I was serious did you?  "Clever" and "government official" together?  Not in this administration brother!

XOM and CVX will drag down the Dow so ignore the headlines and let's concentrate on the individual components and the transports, who should do quite well.  We still want to see oil get down below $110 but not likely this week (and boy are they in trouble if it does!).  LVS had a big disappointment in Macau, that will hurt WYNN as well and, as usual – we'll be looking for tech leadership for positive signs of rotation.

Dont' panic, keep stops on the callers because I'm a buyer right now IF we can hold our levels!

 


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  1. Sam Zell Sees Commercial Real Estate Investment Accelerating

    By Bob Ivry

    May 1 (Bloomberg) — Billionaire Sam Zell said institutional investors are beginning to return to the market for mortgage- backed securities that finance commercial real estate deals and new construction.

    “I believe the overall market has already started to ease,” Zell said in an interview in New York.

    Since July, when demand dried up for mortgage bonds and credit markets froze, lenders haven’t issued any major construction loans because they couldn’t sell them on the secondary market, Zell said. Now, with returns from Treasury bonds below the rate of inflation, demand for mortgage securities is beginning to revive, he said.

    Insurance companies and pension funds need returns of at least 6 percent to match their liabilities, Zell said. Investment in commercial mortgage-backed securities is already beginning to return for the first time since July, he said.

    “Is it in large volumes? No,” he said. “Is it the first natural step in the evolution? Yes.”


  2. Phil,
    Some of your picture links are coming up text only.


  3. USO- 91ish in premarket, i must say my JUN90 puts should kick a$$


  4. Phil – I have 20 TASR JUN 10 call and 5 TASR SEP 7.50 call.  Do you sugest selling 5 MAY 7.50 for $0.30?


  5. Hooray for XOM missing!


  6. MUR puts – golden, Phil!  I’m out with a double from $1.15


  7. i wonder how long it will take for GOOG to reach 600


  8. Oh I’m in such a good mood today!  I’m not even bothered by the puts so much but I took $2 and ran on the remainer.

    TASR – I’d sell them for .50 on a spike but .30 is kind of rough as it’s obviously not much money and you are screwing yourself out of a possible rally.  I have Jan and Sept $7.50s and sold the junes against 1/2 for .70.

    If XOM breaks $90 it’s party time! 

    GOOG going ga ga.


  9. And I’m probably leaving some on the table, again.


  10. How long for GOOG to get to $600?  Maybe 11:30… 8-)


  11. Phil,

    Woohoo look at NVDA. The yesterday news are shit( Sell at strength )
    These Guy´s have really good electronic chips in their development and growing.
    But we sold yesterday already

    But who knews that we rally now especially the strong dollar


  12. ma / v – killin it!


  13. Phil,
    Would you roll the short May 28′s down? Would you stick with 3/4 cover?

    FRE MAY 28 Call  
    -7
    $1.15
    $0.45
    ($315.00)
    490
    60.87%

    FRE JAN 2009 22.5 Call 
    10
    $6.67
    $6.20
    $6,200.00
    -474

    -7.10%


  14. Leaving some on the table – there is no such thing.  If you are a trader and you make a double then you take it off the table and spread it around looking for your next double.  If you have $1,000 tied up in one stock that doubled and you put $200 in 5 positions (much safer of course) and one doubles and one goes up 30% and one goes down 20% and 2 more are flat.  You have $1,220 so unles you are leaving 20% on the table on your double, you’re not missing a thing except maybe a pullback that costs you half your gains.

    OK, NOW I wish I still had those XOM puts!

    NVDA – couldn’t risk it in small portfolios but I’m getting much more confident in earnings picks as it seems my take on the economy wasn’t wrong, it just took a while for the numbers to prove me out.


  15. ouch, yuk, sorry bout that.
    FRE MAY 28 Call                   -7    $1.15     $0.45     ($315.00)    490    60.87%
    FRE JAN 2009 22.5 Call     10    $6.67     $6.20     $6,200.00     -474    -7.10%


  16. FRE – I’d take out the caller and wait patiently, maybe sell again at $27ish.


  17. GOOG may not get to 600…maybe 598 or 599 or 599.93(+/-2%)

    After that it mght tank & keep low for some days while it eats all the call options of 600+

    Meanwhile FSLR is due for a Pullfromt (yeah I just coined the term) maybe head for 330-340

    XOM & MUR nice if they fall atleast another $5-10


  18. I’ll ask this again, why does anyone want to bet agains MA and V?


  19. AAPL- out on 1/2
    MOS- back in
    XOM- congrats to all


  20. TASR
    Phil,
    I’m in the Sept 10s with a basis of $.95.  Would you take the roll to the Sept 7.5s for $.80?  It seems to beat the 40 cents/dollar rule, but it almost doubles my basis.  Thanks!
    Who’s the new cheerleader these days?


  21. FSLR- Now I wish we had bought those puts at $300


  22. Good Morning Phil,
    Thanks to your firm conviction on XOM Puts, I made 15% on XOM May 90/85 Put spread that I entered a few days back. I got out today.


  23. 9:00 *U.S. ISM MANUFACTURING INDEX HELD AT 48.6 IN APRIL


  24. Cheerleader- nobody can replace you, Courtney.


  25. k1 – congrats on BWLD btw!!!


  26. AA- Takeover Chatter from BHP


  27. EK – glad we’re not playing with them anymore…maybe on this dip?


  28. Construction spending down another 1.1%, ISM still contracting at 48.4, not good but not too much worse.

    GOOG puts are cheap again.  $570 puts for $11.85, looking for $14 on a dip.  XXX


  29. Mark- BWLD, thanks man. A little surprised about them, actually.


  30. JLL  Any opinions?  It got really whacked  yesterday


  31. WFR- acting better


  32. K1 – I need twenty dollar to make this market hollar!


  33. Courtney- I gotta benjamin here for ya.


  34. A very G-Morning to All.
    Phew, XOM <$90. I live by undisputed fact that every other idiot is lucky. I had a lot of naked puts. Thx Phil your are brilliant.
    Mark – I have C LEAPS naked, do you think that $25 lvl will hold for next 2.5 weeks? Thx
     


  35. Phil:
    when a stock had a big runup and you think it will drop:
    what do you prefer:
    sell a short call
    or
    buy puts ?

    I see you going mostly the PUT route ??


  36. CF – falling off the Troll’s Wall


  37. RIG- eyeing again but after NAT GAS report


  38. PEP  Possible LTP trade?  You only need to make up $4 in premium if you buy the Jjan 2010 60s


  39. K1,
    You can keep your Benny if you can spare a tip on that TASR roll question.  It seems like a no-brainer, but I’ve no-brained myself into insolvency more than once in the past.  Thanks!


  40. LVS- I know I jumped on this scam late (much after Phil) but did mention that my friend said Maccu was a joke and that EMC and others bagged there convention in Vegas.  Another thing my buddy from London was there and got charge $8 for a Samuel Adams beer.  Even at 1/2 price thought it was a rip off


  41. FSLR – right on my target at $275 (see yesteray’s notes).  They may make a run back for $285 from there but if they don’t break $280 by lunch, get the hell out.  I won’t play them as the premiums are too annoying.

    CVX with the BIG Ka-Ching over $2!

    TASR/Courtney – How does rolling down $2.50 for .80 come out to more than .40 per $1? 

    Cool Foredu!

    EK – no, they seem to have blown it with their cheap ink strategy, the exact opposite of LXK’s strategy, which is to give you a printer for $25 and then rape you on the ink.  The problem EK has is they have to explain to the consumers why they should spend $149 for their printer because, after 10 refills, they come out ahead.  Not ripping off the consumer is never a good corporate strategy unfortunately…

    86Bcf build in gas – way high!  This may even get us to test $110!  Poor XOM, they bought all that stock in the $90s…


  42. C – 2.5 weeks is an eternity for this guy.  That’s a day to day answer… so today yes!  It’s keeping it’s 20 dma and it’s above it’s 50 dma (still below 200).  50 dma is 24.57 today, and that’s where it bounced around / off of the last 10 days.


  43. Mark – Re: C. Thx


  44. Mark – Re: C. Thx


  45. EOG getting killed. Glad I kept 2 May 130 puts and I am pissed at selling 3 for loss!


  46. Phil:
    my may 170 and may175 callers ar DITM and its 15 days to expiration,
    these cover oct 155 and 165 calls,
    rolling the may callers to jun180, is this smart to do ?


  47. SU in the toilet   :)


  48. MOS- Well certainly didn’t time that buy well.  LOL
    Fred- Sox getting some good pitching


  49. Phil, thanks for the oil put plays.  It was hairy there for a little while, but I’m glad I kept DD’ing and rolling.


  50. Phil,

    TASR
    By "beat" I meant that it was better than, or less than $.40/dollar.  At $.80, it’s $.32/dollar in position.  It looks like the roll goes for $.75 now.  I hate to ask the JV questions, but not asking them in the past has gotten me burned.  I came to play this time.


  51. Good morning INTC went vertical .. now tying to hold 22.90 .. great .. will you cover here PHIL   ??.. 23 MAY e.g


  52. USO- so short, so nice


  53. billbigd
    Too bad they have no offense.  Lakers looked amazing, hoping for a Celtics/Lakers final.


  54. If oil continues down then we’ll look back and realize we should have been buying the pure refiners here.  Valero is the only refiner making money right now so think about the leverage as oil prices come down.


  55. XOM  I sold May 95 call for $1.05 and they are now trading for .15.  I’m in a fear/greed conflict as whether to close or not.


  56. my guess is that xom deliberately egnineered a ‘reduction’ in their extraction profits since w/ rec profits, they otherwise might be expected by the dem’s to punch more holes in the ground which they absolutely do not want to do !!


  57. eph, take the profit and don’t look back.


  58. CSCO over 26


  59. XOM- Strike over with the Rebels (workers)LOL


  60. XOM- This made my month!


  61. RMM – that depends on the stock doesn’t it?  With GOOG it’s suicide, with FSLR, I’ll short them and roll them all the way to $400.  Buying puts limits your risk at least – that’s why I buy the GOOG puts when I think they are getting uppity, especially when I first roll my callers to highter strikes and effectively lighten up my proteciton on the leaps, then I feel better doing it by having some puts.

    EOG flying down!

    PEP – very good LTP play.  We already have the Jan $70s from Feb, which are actually down 40% but well covered and good for a DD or roll back to 2010 at these prices.  A great little income producer!

    There goes FSLR!  No bounce for them!

    C – As with my last week’s example on owning C.  You have to go into it with the attitude that every time it goes down you want to buy more, no matter what terrible "news" comes out.  They are the world’s largest bank with $2Tn in assets (more than all but 8 countries), you have to put their troubles into context and be a long-term holder.

    EOG et al – It takes a very tough sort of discipline to go against the crowd.  Next time we have an overbought sector we’ll do a special folder so we can step through it week by week.

    RMM/AAPL – They still have premium.  The $170s are 30% premium and the $175s are 75% premium so essentially you are saying you are too impatient to wait and you consider your position invulnerable to the downside and, even though you can roll the $170 callers (who are actually only worth $7 at expiration) to the June $185s, this is still not going to be enough for you so you’d rather pay a 30% and 75% premium now just so you don’t have to look at a caller who is ahead of you for 2 more weeks…

    XOM at 5% rule.  SU 5% rule too.

    TASR – No problem but yes, you are much better off being in position than doubling down.  It should generally be roll first and DD when you are down 50% on your adjusted basis which puts you in a lower call down 25% and then work hard to get that 25% back and get 1/2 out at least, which leaves you in the lower basis even at your original buy-in (number of shares, a little more on a $$$ basis).


  62. --SEN CRAIG TO INTRODUCE BILL THAT WOULD HALT FILLING OF SPR, EXPAND GULF OF MEXICO DRILLING
    <USO>
    Nice.


  63. INTC Ok minimal cover at the moment 2/8 WITH MAY 23 @ .43 .. SOX looking for 400 if it gets maybe INTC will break 23 up .. let’s see …


  64. Perkash –FWIW; I have the same (greed/fear) problem, so I am rationalizing using Risk/Reward. In the XOM case my thought would have been: The XON has to drop to 0 for me to make additional 15%, or rise by $4 (about 2%) to loose given to me 85% profit. I would have flatten this position.


  65. Phil – thoughts on shorting RIMM


  66. To All: In all this XOM excitement I don’t remember what is the Phil’s 5% rule. (A typical Senior Moment).


  67. timsykes just released his new website… you may not agree with him but boy does he know how to brand.


  68. Apparently Sen. Craig has had time to think while in those stalls.


  69. Phil:
    I have baskets of stocks for monitoring:
    wow:
    oil, energy,canada energy, agri, metals and coal gold an silver, solar, even casinos all red,
    technology , bio/med green, that tells you where the money flows at this time.
    I have never seen such a strong rotation.


  70. picked up a double on MER… my only decent trade for this week


  71. Phil – I’ve been a way for a while and found out my caller is deep in the money. I need your suggestion adjusting my AAPL position.
    +4 JUL CALL 155 – $17.45 now $27.70
    -3 MAY CALL 155 – $ 8.00 now $23.30
    Thanks


  72. SP – nice! 

    MA – 291… looking tired on the 2 day chart now.  Let’s see if it rests a bit.


  73. XOM- Is anyone else listening to this CC? This guy is boooooring, and he pauses for way too long.


  74. Mark: yeah but i’ve been whipsawed out of every friggin position since… not trailing stops and stupid sh*t

    taking a break and getting reorganized so I can recover


  75. and gold’s breaking it’s H&S neckline


  76. Anybody see Hillary on O’reilly?  I think she has balls showing up on his show.


  77. C- is such an animal


  78. XOM
    These guys have $41 billion in cash.


  79. Ryan,
    I agree…but this company is like a country of it’s own.


  80. XOM- downgrade from JPM


  81. Mark,
    how about V.  it is going nuts!!!


  82. RMM-do you have a doppelganger…just saw your last post on another site LOL


  83. Emotrader – AS IT SHOULD!!!  (i.e. big boys buying no doubt).


  84. SOX- getting nice, up 2.9%


  85. Yeah this rotation is something else. The QQQQs and XLF look like rocket ships, whereas anything in commodities is beign taken out to the woodshed. Great market environment though a balanced portfolio, you can have the longs going up while the shorts are going down --assuming you picked the right longs and shorts…


  86. Phil – Whats your current position in V ? Is it still as in the Short Term port ?

    Its a real challenge managing the V callers.


  87. sorry, on V – like I said maybe a few weeks ago, I expect it to work out sort of like the way VMW did post IPO… 100-120 range is COMPLETELY in the cards "ST".  Look at VMW chart from IPO to now… see how it behaved right after then 6 months later?… things to watch…


  88. V- AT $88 stock is up 100% from IPO


  89. VLO
    Moving up on 25% increase in dividend…still only .60 per year but not bad in this sector.


  90. MOS – definitely picked the wrong day to blindly follow BBD on an a trade…  LOL


  91. CSCO,
    Darn, missed selling CSCO puts by .01 on my bid this morning.


  92. Phil, this is your reminder to short RIMM.


  93. MOS – critical time for it.  macd needs to come down to earth, rsi needs to stay here neutral, price needs to fluctuate daily between 50 and 20 dma (which both have flatlined)… if it breaks 50 then looking for $110 support.

    POT same sort of analysis.  MON, already failed 50 dma, 200 dma is roughly 103 when/ if it gets down there.  but macd and rsi ahead of MOS and POT by a week or so.


  94. where’s whitney? i need to thank her.


  95. C- for 17.99 in mid MAR, imagine that.


  96. I am back in DZZ.  Dollar strength on no news, the fix is on.  We are going up.


  97. AAPL- for 115.44 in early MAR…sureal


  98. AAPL- still early, but doing the 2.5% thing


  99. CTX  – making a come back


  100. BTW rolled those May 23 INTC callers to 24 a while ago..


  101. GRMN taking off.

    Rolling GOOG callers to $580 calls full cover, I’m not going to be greedy as that takes me to $600.  XXX

    INTC – let your profit be your cover for now!  They should be so much higher and if money is heading back to tech, they should get plenty of it.

    FRE with a nice move.

    VLO – yes they are a buy when they stop falling, they just trade knee-jerk with the oil patch even though they are in a very different business.  Still, they do suffer if gas goes below $2, hard as that is to imagine, as it leaves them less room for their crack spread.  At 1/2 price ($40), I’ll start a leap on them and roll and double ’till they find the right spot.

    XOM/Eph – I close those out as a margin issue but if you don’t care, it’s virtually impossible for them to come back in 2 weeks.

    Oh, by the way.  I will only be here in the morning tomorrow.  I have an afternoon meeting that will be the rest of my day.  XXX

    CAL with a nice move.

    Shorting RIMM – not in a tech rally, tempting though it may be.

    XOM 5% – It is highly unlikely a large cap will lose more than 5% in one day and you can expect a 20% bounce (to -4%) before the trend resumes so any pullback (pullup) that doesn’t get them to -4% is very bearish and finishing between -4% and -5% is very bearish for the next session.  With a stock as big and liquid as XOM, the rule kicks down to 2.5% incriments.   You can see the 2.5% rule hitting at $90.55 in pre-market (down from yesterday’s $92.87).  So if $88.22 is the 5% rule, we can expect a bounce to $89.15 which would mean nothing.

    AAPL/DBS – That’s not good!  Best is to go to 2x $175s at $15 ($3more) and roll the caller to 6 $175s at $7, which would cost you another $1,300 but puts him into $3,500 of premium over 2 weeks and then you can roll him to June $185s or higher if Apple keeps going up.


  102. TASR  -  now if we can get this thing off is ass I’d be one happy camper


  103. Covering DIA puts with $128 puts, looking good now!  XXX


  104. Damn who pulled the plug oon FSLR.


  105. Phil – Thx. I appreciate your reposting of 5% rule.


  106. Phil I have GOOG jan ’10 460′s fully covered by may 500′s.  Any ideas?
    Thanks.


  107. I covered my AAPL leaps.  Lots of resistance in market trendlines, IMO.  Great run since earnings.  Dollar strength will cause confusion and we really could benefit from a good pullback.


  108. Mark, thanks for the chart reading on POT MOS and MON -


  109. JPL – nw!  It is what it is.  our markets will tell us sooner than later.


  110. V position is 20 Jan $75s, 20 Sept $85s, sold 40 May $80s at $6, now $8 and I"m going to wait as I’d rather have the protection over the weekend and the premium difference isn’t enough for me to want to roll up the caller yet.

    This is fantastic that money is pourig out of the commodites and going right into the Nasdaq!

    RIMM – thanks Film but not today I think, unless we get $130, then I have to!

    MOS, POT, Ags – they are commodities, they are in the same bubble as energy is and housing was, don’t delude yourselves that these are value plays.  We’ve been growing and eating food for 100,000 years and this is the first time we’ve had a world-wide doubling of prices.  It’s entirely possible that is will correct to the norm.  If you ever made fun of people who invested in homebuilders, try to write down your side of that conversation and have someone read it to you, substituting food for homes…

    HES going back to oblivion.  BP coming down nicely, better late than never.

    EOG past the 5% rule, when you start seeing some in a sector moving past it, then you can look at others to follow  suit.  XXX

    Ford sales down 19% – That REALLY sucks!  That should put a cap on this rally.


  111. Congrats to anyone who shorted FSLR.  It tanked like a rock.


  112. film/AAPL- i hope ur right. i’ve decided that i’m being a greedy little punk, and i’ll pay my MAY 160 callers out at the next best chance.

    as midnite has said, "jah make enough for everyone"


  113. POT: On a short term (5 min), you’ve got a double bottom @ 175 w/ MACD crossover and turning up. Nice scalp play with a stop at 174.5, close @ EOD.


  114. phil, did you move your goog caller up? aapl caller?


  115. I do know BBD’s having trouble too though FYI with fly.


  116. Phil,
    AUO is coming back


  117. Sorry meant to post on Op’s side.


  118. A "Diamond Bottom" chart pattern formed on Consumer Discretionary Select Sector SPDR Fund (XLY on AMEX). This bullish signal indicates that the stock price may rise from the close of 32.39 to the range of 36.20 – 37.00. The pattern formed over 77 days which is roughly the period of time in which the target price range may be achieved.
    A Diamond Bottom is considered a bullish signal, indicating a possible reversal of the current downtrend to a new uptrend. Prices create higher highs and lower lows in a broadening pattern, then the trading range gradually narrows after the highs peak and the lows start trending upward. The technical event occurs when prices break upward out of the diamond formation, which confirms the pattern.  XLY

    -->


  119. XOM- is just bleeding all over the place, although the daily 40, 100 & 200 MAs converged at 88ish, so that’s a big support line w/ all the stops that must b clustered there.


  120. GOOG – Phil – on your GOOG caller roll, you had May510 right? You’re rolling them to Jun580? I have may550/jan550.


  121. EOG at 5% rule


  122. Of course, I bought a lot of stock at 178.31 in case I am wrong.


  123. SU – puts are doing well. R U taking profits there?


  124. XLF- it could also b a flag of some kind w/ multiple tests of resistance at 33ish


  125. filmflam,
    what do you think about selling may 180 callers @ 5.75 after you get those $160′s off your back?


  126. XLF- wooop>>>i meant XLY in re: to mark


  127. com’on aapl, get my $ back after i bought my really good callers (50/50 180′s & 175′s) at way too low of a profit!


  128. I sold 175′s.  I don’t really have strong opinions on which strikes to sell.  Whether you go up or down one strike is really a personal decision.  Do you want more downside protection or do you want more premium.  I decided for more downside protection.  I just think we need a good bout of selling to test these stocks that are now back in fashion.


  129. Mark – what’s your read on MA now, still tired?


  130. that aapl caller buyback was yesterday of course before the full effect of the fed news was felt !


  131. TASR – we can afford to splurge .10 in the $10KP on a DD at .10 if possible.  XXX

    $25KP
    HOV – let’s get out even if possible
    MDT – DD at $1.4.  XXX

    DTP:
    APL is stuck for now.
    AUO coming back
    HOV – get out even
    GOOG – We have 40 Sept $550s and 40 May $540s, not good but we’ll eventually spend $20K ($5) to roll them to the June $570s and then we’ll feel better.
    LVS – waiting.
    OIH – rolling $200 putter to $195 puts for $3.50
    XLE – rolling $81 putter to $79 putter for $1.15
    EOG – $135 putter to 2x $125 puts
    MDT – buy back caller at .50


  132. film,
    aapl’s yesterday sell off volume was hardly insignificant and yet it held at reasonable levels !!


  133. hl, I am definitely afraid to be covered, but since I covered, I thought I would post it.  If it holds 178.30, I may have to scamble and uncover, but I do see a touch of 182 still possible if we go higher.


  134. film- if i understand, then the "scramble to uncover" move is to catch the ride to 182 where a re-cover is likely (highly likely?)

    thanks


  135. phil or anyone,  long  IGW jul 45 @ 8 and notice no trade activity?!
    bid is well below intrinsic value. question: why no activity or am i not getting accurate quote?
    new to psw, early in learning curve…  thanks


  136. mck – yes, but more still hanging.  Here’s the chart I was looking at (see when I posted how the macd 2 day had started to turn?… now it’s almost to neutral and price has stayed up there and bouncing off it’s 89 on the 1 min tick).  Lot’s of volume buying in the morning compared to yesterday.  Already above it’s pivot resistance levels… I’ll be watching for the 200 test aorund 1-1:30 EST … then look for the volume to keep it buying or to take some profits.


  137. USO – bought back MAY 85 short cover for nice gain letting JUL 85 long put run


  138. GOOG/Bigs - How about 2x the Sept $570s at $63 ($40 in your pocket) and spend that $40 to roll him to 2x the $580s, which are pure premium.  If GOOG goes down, you can roll him and yourself lower nearly even (the $570s are + $6 for him and the Sept $560s are + $5 for you) and to the upside, even at $600, you will be able to roll him to the June $600s better than even leaving you with less than $30 in premium and owing him nothing rather than the $80 you owe him now.

    Oh my gosh, WNR moved up!  Time to buy VLO June $50s for $2.20.  40 in DTP.  XXX   10 in $10KP, 20 in $25KP.


  139. some big boys pulling the trigger on thier aapl buys. five big pops since 12:15 !


  140. xian, that is the THEORY.  Right now watching the channel to see if we stop at 179.50


  141. Like I said, I am using stock to catch that run as it is much easier for me.


  142. film,
    why easier? dt buying pwr?


  143. Phil
    On TASR was that the MAY or the JUN 10′s?


  144. AAPL – obvious resistance at 180 where it broke below and could never recover back in Jan… be on the look out.


  145. Refiners all looking like they bottomed out here, SUN, TSO, VLO.  Keep in mind that SUN actually reported a loss so I think they now recognize lower oil will be good for refiners, better crack spreads, easing of retails = better demand but prices will still be high through driving season.


  146. film,
    the way i see it, using an aapl 90 day chart, the $179.40  wick on 1/14/08 was broken yesterday during the spike up! the wick to beat now is $181 even on  1/10/08.


  147. aapl has pulled ahead of both dow and nasdaq !!


  148. Singapore Steve

    TASR was the Jun 10´s in the 10K

    QURFB Jun 10 CALL [TASR @ $7.32 $-0.21] 80


  149. Rally still going strong despite a lot of bad data today.  I’ll feel much better when we get through the weekend but this is pretty strong.

    RTP heading way down.

    GOOG callers are, where I can afford it, up to the $580s simply to get the most premium per day  ($2) through expiration.  AAPL callers are mixed $170 and $175 and will remain so through the weekend.  If they break $180 and hold it, I’ll just roll everyone up $5.

    AUO – I was stunned they went down, made no sense…

    XOM – see Xian, that 88ish is just the 5% rule and I don’t have to wait to see where the squiggly lines converge…

    GOOG/MCK – As with Bigs, you just want to move the caller into premium.  It’s worth giving up a couple of months to do it as his $20 of premium expires MUCH faster than the premium you pick up.  Your Jan $550s are $94 but what good are they doing you when you owe the caller $40?   You want to get your caller to the $580s and that costs you $20 so either put in fresh capital or get $20 off your positiion.  You can roll to the Sept $550s at $74 and give up no vertical position to pay for it.  Now you don’t have to pay him the $34 you owe him and you’ll collect another $20 next month, which you can use to roll back to the Jan 550s if you want.

    SU puts/All oil puts – stopping out on the turns where naked.  Can’t complain about those gains, hopefully they rally into the weekend, wipe out our putters and we can reset next week.

    IGW just very thinly traded (and annoying).  If you are looking to get out sometimes it’s easier to just sell the more active contracts until you get your price.   On the $55s, it’s like pulling teeth finding buyers.

    Wow, even more money coming into the market!


  150. AAPL- took 2nd half off from yestereday on May 175′s.  Wanted 8($3 gain) but took &7.95.


  151. COST/Phil -
    I’ve rolled my May 67.50′s to May 70′s the other day, and continue to hold the Jul 65′s. Here’s the position:
    -5 May 70′s: Cost: 1.76 – Current Price: 3.30
    7 Jul 65′s: Cost 4.93 – Current Price: 8.70
    Is it time to roll the Jul 65′s to perhaps a Oct 70? Do I leave the May 70′s as is?


  152. we’re having a bit of an AAPL turnover… get it? ;)


  153. Phil, did u get the MDT DD @ 1.40?  Is 1.50 still OK to DD?


  154. phil/XOM- that’s good evidence of the 5% rule

    rotation- a lot of deep pockets went to bed last night feeling just a little out of position (sarcasm font)


  155. HL – that breaking of the wick was on 400 shares that some sucker was using a Rule 611 trade-through exemption (i.e. means nothing b/c no true volume on it):

    TIME  SIZE  PRICE  E  COND
    11:33:28  3  180.00  P  R6,IS
    11:33:28  1  180.00  P  R6,IS


  156. TASR – June $10s!  Not getting it for .10.

    Taking 2/3 of my YHOO calls off the table at $2.30, momentum fading.   XXX

    COST/Dan – It was at $70 this morning, why not give it more than 3 hours before you decide you’re in the wrong position?


  157. SP – boo hahahahahahahahaahah


  158. mck – MA – shhhhhhhhhhhhhhnnnnnnnnnnnaaaaaaaapppppppppp


  159. AAPL didn’t break 179.40 yesterday.  Bad tick.  Didn’t really break today either.


  160. mark,
    good point. where did you get this detailed data?


  161. Highlander – dude, I have a Bloomberg Terminal.  I.e. the most powerful financial trading / information system in the world.  I don’t pay for it my company does, but I can tell you when the CEO of any company sneezes I swear to gawd.


  162. kind of embarassed i wrote that

    MA is blowing up…


  163. MDT – yes I got $1.40 no problem.  I’d say don’t chase, I really think there will be profit taking ahead of the weekend so I’m taking all the gains with a grain of salt.  Don’t forget with oil near my $110 target, we can expect a rebel attack AND a pipeline problem AND fog in Houston AND a refinery outage to support it.

    XOM – so they held $88.22 and now are through $89.15, which is the point you get out if you are day trading.  Now they move to test 2.5% at 90.55.   If you are were day trading this, what you can do is cover 100% with $90 longs when they crossed $89.15 and held both positons inside the gap.  If we get a bounce down from $90.55, you dump the new calls with a small gain and put tight stops on the puts.  If it punches through $90.55, you kill the puts and ride the calls with tight stops.

    CTX with massive recovery, just giving it up now so good time to cover or exit.  XXX


  164. Steven, now you’re just making me hungry!


  165. XLY – testing R2 now at 33.35ish…


  166. mark,
    btw the print occured @ 12:33 yesterday edt. is your data cdt ??


  167. COST/Phil – LOL, you’re def. right on the short calls. But as far as the long Jul 65′s, how in the money is deep, and at what point (not just in this stock, but in general) do you know when to roll up?


  168. FYI HUGE volume selling treasuries IMHO.  Knocked it down a point… money moving from long bond = see more risk to the yield LT vs ST in the market (equities).  All secotrs rebounding.  Financials and tech own the market (with discretionaries of course).


  169. mark,
    maybe we should make you a ‘member emeritus’ just for your access to this kind of data !!


  170. HL – yes, I have my bloomie in Central time.


  171. GOOG $580 puts for $14, 10 in DTP XXX


  172. Check out VIX – below 19!


  173. fyi, don’t forget it’s the first of the month… rent check due, plan changing allocations post fed / earnings… you can see where themoney’s going…


  174. Phil,

    The VLO Jun calls. Do you want to hold longer or only for a small bounce till tomorrow?

    Thanks


  175. Alex: normally when it’s a 10kp play it’s a longer swing tread that works into a spread


  176. MA is very tempting short now! 

    FSLR is amazing! 

    YRCW having a great day.

    COST/Dan – you roll up when the rewards outweigh the risks.  I would roll up the July $65s to the Oct $70s to take a couple of bucks off the table (assuming you don’t mind the premium) and to lower my downside exposure and to give myself 3 more months to roll my caller but I wouldn’t move the caller as he can enjoy all the pain of a pullback and THEN you can roll yourself down.

    We made 13,000, holding it would be huge.  SPX 1,400 is all we need, Nas 2,450 is fine, NYSE 9,300 is fine, SOX 400 needs to hold to confirm rally, Rut 725 is great too. 

    CY came down nicely.  If they hold this bottom somebody remind me to get back in there tomorrow.

    VIX back to making a proper 1:100 move with the Dow, that’s a neutral VixDex(tm) signal, meaning there is not pressure for this rally to reverse.

    VLO – I think we can hold them.  Insanely they will go up if oil goes down (cheaper input cost) and they will go up if oil goes up (because they are indexed as an oil company).  I will consider selling 3/4 the current $50s if we don’t make progress though.


  177. Mark;

    I nhad previously asks this: when is the best time to collect rent on LEAPS, never got an answer

    now you say: rent check due, plan changing allocations????

    please explain,


  178. RMM – not an options guy, def ask Phil et al that. 

    rent due – I was joking… really was quoting Bone Thugs and Harmony in my mind LOL.  You know… it’s the first of the month so pay up!  not options rent, real world rent. 

    Plans changing allocations – when pensions, lifestyle funds, etc decide to do allocaiton changes (say from Value to Growth managers) they try to effect it as close to the end or beginning of new months / quarters (for reporting purposes for performance start date at the custodial bank).  Does taht make sense?


  179. James – forgot to check.  TRN – WOW.  Transports still the name of the game…


  180. bone thugs- reminds me of high school and colloidial environments w/in automobiles


  181. xian – yeah!  reminds me of high school and… too… :D


  182. QID $40s too much fun not to play at $2  XXX as a gamble overnight.


  183. I just wanted to see where certain oil/refiner/solar stocks were when oil was at certain prices. Bespoke Investments is anticipating an overdue 32% correction from oil at $116 which takes us to about $80. No time frame was given for this.
    [IMG]http://i30.tinypic.com/nv880g.jpg[/IMG]
    I hope this works.


  184. GM sales down 22% led by truck sales down 32%!  Holy cow!!!


  185. VLO oh this is a good explanation:” Insanely they will go up if oil goes down (cheaper input cost) and they will go up if oil goes up (because they are indexed as an oil company)”

    Such things are ever good to indicate a false or overreaction of the Market.


  186. Prices listed are median values at each of the dates where the price of oil hit the specified price.
    http://i30.tinypic.com/nv880g.jpg


  187. Make sure you have at least half covers on your positions, the economic data is just terrible and these levels may not survive a weekend’s reflection (or Barry’s column tomorrow morning!).  XXX


  188. GOOG – roll callers vertical to 580, Ok Phil, I’m drinking the punch. But help clear the fog – I just rolled my 550 callers to 580 for 20 as you said, but as I look at it now, that traded 10.50 premium on the 550s to 19.50 on the 580s. So did I just pay 20 for 10 extra premium?


  189. Took off for an hour to go hit range balls and looks like i did not miss anything.
    I’m about 90% covered.  Would be nice for a drop and a bounce to resell and collect double rent this month.


  190. Phil – BTW, did that coporate event calendar I post last night help at all?  I’ll post tomorrow’s AH if it does, otherwise no worries.


  191. RIG- very nice bounce IMO


  192. What a great sendoff to a vacation!.  Good luck this month.  El Bulli, the Fat Duck, and Joel Robuchon await.  See y’all in June.


  193. Phil:
    with this drop in oil price, and a huge move of money out of all commodities and move into Nasdq,
    is this not the type of excitement which leads to a reversal ?
    I took a beating on mky enrgy stuff, I closed all but those beyond June and I am rolling out,
    what is yout take ?


  194. AUO turning around??
    NOW I am putting in the trailing stop.


  195. DIA/SPY/QQQQ- all at/near top of channel defined w/ the high on fri APR 18 and a low at tues APR 22.

    tomoroow looks like an excellent day to take profits on, after a giddy open. at least side ways, or else this maybe an intermediate term breakout.

    the question becomes: is FOMC info strong enough for a breakout (ie a lot of $$$ changes behavior)?


  196. Mark – MA – shhhhhhhhhhhhhhnnnnnnnnnnnaaaaaaaapppppppppp – no kidding. but the sellers smacked him down from 296 right through the 89 line. I wanted to wait it out but got in a tussle with Fidelity over margin so I exited those 290 short calls. Made money on the first set, lost on the second but I’m about even which is best I can hope for for a trade that didn’t go my way. Now that I’m out it can settle back down. :)


  197. enjoy beth! happy springtime, too


  198. SU – puts, Phil – kudos on that call. I jumped ship earlier at 5 (on your 115 putter play) for a 2 bagger. You’re the best.


  199. covered half VLO


  200. ryan- that’s a very cool table of info, thanks


  201. mck – it "should" settle down.  That volume’s called "market impact" and is not a real representation of where the price is supposed to be (i.e. a good short opp if you day trade stock).  I posted a paper about it a couple months ago or so… either way it was destined to happen… now hanging on the 200 min ema, failing all shorter MA’s… need to make sure it doens’t have too much support at 200 before good to short.  b/c 2 day macd could easily continue its downward trend while price stabalizes here at 293ish… otherwise look for 286.70ish


  202. Beth. Have fun, but came back soon. I will miss you. If you go to Paris, have lunch @ Julius Verne –in the tower. This is an expensive tourist trap, but has really nice view.


  203. Have a wonderful trip Beth.  Just remember the magic formula:   calories expended > calories consumed
    So make sure you walk off all those tasty treats every day.


  204. FSLR  –   Wish i had kep those May 260 puts I picked up yesterday at 3-ish. Got out at 5.20 by the afternoon. At $12.60 now.

    In some calls now after this debacle. My personal FSLR daytrade experiment continues…


  205. Just had a cold call saleman call pushing NDAQ it was on my watch list , and he told me it was one price and on my screen it was not that price . I told him his price was different and he hung up. To bad they dont all do that. lol


  206. Mark – next time more focus on fslr who has no reason being so high, those callers went from 12 to 2.70 for a 4 bagger, kicking myself for tying up too much resource on MA. Where’s the next party?


  207. Phil / GM – why wouldn’t we short them if they near 24 again? They were at 20 just 10 days ago, and they have already reported so there is no earnings risk ( maybe that’s better stated as "no risk of any earnings" )  :)
    The only downside  I can think of is index buy programs that might trip  just above  Dow 13k. Are there other reasons funds might need to buy these guys?


  208. mck – you shoulda aske me earlier!  ROFL ;)


  209. Phil, half cover comment applies to VLO in 25KP?


  210. PHIL – ISRG in LTP –  I am interested in getting some LEAPS … Can you please validate my analysis when you have the time?  And, is this a trade you would get into if you were building your LTP now ?

    2010 Jan $290′s  @ 85
    Collect 20 Months rent @$12 (Conservative) Win 1/2 the time so $6  (Excluding May)
    (Are these assumptions OK?)
    Should be cash positive in the 14′th months (June) (85/6)
    Pure Profit for 7 Months (7×6 = $42)
    Expected Profit on Rent 49%  (42/85)
    LEAP Intrinsic Value based on 50% Win rate approx $70 taking the stock to $360 (Seems Reasonable Target)
    Profit on Leap $70
    Expected Trade Profit = 42+70 => 112/85 = 130%

    Using a similar approach I cannot get the numbers to work for Jan 09′s.  They therefore seem not to be an option for me at this time …. is this correct ?  Thanks


  211. DanW – cashing out your fslr puts – don’t look a gift horse in the mouth! You had a  double and took it, very smart move IMHO. Kicking yourself after the fact will get you in trouble next time. When else can you make 100% in a day? Celebrate man! I should take my own advice :)


  212. OK cover 2/3 INTC here with May 23 and 24 50%


  213. Thanks, xian.
    If you’re wondering where some of the names came from, they were identified in Barrons this week as the biggest beneficiaries of the rapid rise in oil prices and are the likeliest to get killed in fall – basically for the ~30% decline in oil, these will give ~50% declines.


  214. Oil chart – Very nice RP but don’e forget the OIH represent costs for the majors so they actually take a lot of damage on the way back down as it takes them a while to squeeze down the line and get costs under control.  The nice thing about an energy sector recession is no one in the real world gives a damn and we’re just pleasantly surprised when the price of coal and steel comes down to reality while these guys scramble to stop the bleeding. 

    Those truck sales numbers are intense!  That is major demand destruction and no rational person could take that as long-term bullish for oil.  If everyone on the planet cut back 5% of their fuel consumption, that would knock off 4Mbd of global demand.  Corporations do it because it makes sense (new BA planes use 20% less fuel) and people do it because they just can’t spend any more.  That’s what we’re seeing here, I was right to call the breaking point at $110 because that’s what led to the 7% demand decline in April that was just reported.  I think we could knock 15% off demand, which would cause a 10Mbd pile-up of barrels and knock out almost a decade of demand growth worldwide.  If that level of demand sticks (75M) and prices start coming down, the pain endured by the suppliers would be unbearable (for them).

    Wow – CNBC running the oil companies’ propoganda campaign about how they "only" make 8.3 cents on every dollar as if it’s a news story!

    GOOG/MCK – You were supposed to roll the callers, the calls you sold, to the $580s and yes, that is paying them $20 of the $35 you owe them to put them into a call that is 80% premium, which you will owe them NONE of in 2 weeks.  Think of it as a pre-payment discount.

    Corp events/Mark – No, not at all!  I meant some way to know who would be on CNBC, Bloomberg, FoxBiz or major TV shows in the week ahead (times would help).  Context would help too as there’s a difference between a CEO being a "special guest" as opposed to being there to defend themselves of course.  If that’s not a service it should be!

    Have a great time Beth!  Sounds like major fun…

    RMM – were you bullish on oil?  I don’t think this is reversing.  I think you can lay the chart of the homebuilders circ mid 2006 and just watch the energy/commodity sector follow that path.  Think of money coming out of housing as the primary wave of capital coming out of commodities crashing into the shore and setting of a lot of little waves of cash that rise up and head for shore.  Some of them, like oil, may be big enough to ride but, eventually, they all end up dashed on the rocks, along with you if you don’t have the sense to bail out before then.

    AUO – the rule is you get 1/2 out at $1 after you DD!  XXX, now $1.05


  215. Mark – MA – ok, how about you tell me where it’s closing and I’ll make some plays. Better yet, just let me know about 15 minutes before a big move. ;) Holy smokes, we’d be a money machine.


  216. mck – same thing that happened with FSLR today as did other stocks we were talking about the other day.  you’ll see it opening at S1, all MA’s pointing DOWN instead of up, it comes up to test 34 FROM BELOW and fails… alread failed 8… short.


  217. Beth- I went to an excellent place in Paris called Orange. Near that arch thingy.  LOL Very nice food and not stupidly $$$


  218. Mark
    Why do you use the MACD 12,26  versus Fast STO?   Is it just because of the time frame that you are in.  For my daily charts the Fast STO gains me a day or 2 advantage.


  219. oil = homebuilder 2 yrs ago …LOL!!!!


  220. FSLR – at least that’s how I’d read it if I was trading the stock.  You don’t need me, you’re very competint and can do it by yourself I’m sure.


  221. PHIL -
    Are you raising prices this month?


  222. SS – are you talking about my 2 day chart or intraday?  intraday I use rarely…


  223. DB- selling 1B  preferred Stock to raise capital
    MO-nice move thru $120


  224. Phil:

    no, I was bearish on oil with my DUg and USO puts and UNG PUts,
    but I also had some positions in HK, CHK and others because of positive evnts there,
    the Bernanke stupid move only delayed what I expected,
    I bailed out of alot ofd them yesterday and today but still lost a lot,
    Question: when you enter into a call, do you enter a stop immediately at say 90 % ?


  225. GOOG – vertical rolling ITM caller, thanks for your clarification, and I did roll as earlier. So from a cash flow basis, I had a $35 intrinsic bill coming due at expiration, I just pre-paid that bill for a $15 discount (paid 20 to roll may550 to may580). Ok, the punch is tasting good! Thanks Phil.


  226. Mark
    I saw on several of your charts that you posted.  But then you may have indicators on them and only use them when u are in certain time frames.  So intraday you just go off of the ma’s and ema’s?


  227. SS – what are your settings on the Fast STO ?


  228. WOW  no pants day tomorrow!


  229. Energy
    Just as oil prices were absurd on the upside I think it’s important to note that many of these energy companies current prices are based on $70-$80 oil.  If anything I think some of the OIH components are overextended and the integrated oil and gas companies and refiners will pull back but they aren’t going to fall as dramatically as some may suggest.  I do think oil has a long way to fall but world demand is far different than the last time oil peaked.  Also, keep in mind the ratio energy guys use EI:EO  ; Energy Input:Energy Output;  if you go back to the days of oil derricks and easy to extract oil the ratio was 1:150 meaning you expended 1 unit of energy to get 150 units of production, now the ratio is in the range of 1:2 – 1:5, think of this ratio in gallons, that’s one of problems with ethanol.  There is plenty of product it’s just expensive to extract which means gas isn’t going back to under $2/gallon in my lifetime, nor should it. Just trying to keep some balance in the discussion.


  230. Mark – FSLR, etc. – Markus - love your chart posts, learning a LOT of cool things from you chief, thanks.


  231. USO- longterm chart says we can c 70-75 as likely downside target if this thing really comes apart- BUT considering the "larry curly and MO" effect, it could overshoot very easily and if it breaks 70, then it just looks like $10 clips down until things change.


  232. Singapore – ??? ok, what you do in the confines of your own home… :)


  233. 20 positions closed today!  I feel like Opttrade – somebody slap me!
    Mark – I blew it on TRN.  I couldn’t pull the trigger.  I just kept thinking about that Bloomie number of 30.  And to make it worse, GBX is going up with them.  What’s the scuttlebutt on GENCO?


  234. doug    14,5,3
    mck   check out the Goddess


  235. TOS- i just sent an email to techsupport suggesting the right-click feature should allow u to find out what any ticker represents.


  236. Mark, what do you think of COF?


  237. FRED- I’m listening


  238. mck – Yeah, I’m just glad to be green after my run of bad luck (and lack of smarts). Having an almost double yesterday was great. I would have passed out if it had quadrupled. If one of my meetings had run longer I would have held overnight.


  239. Sox recover 400 lost for a while DOW 14000 too


  240. Mark, BBD.
    Anyone have a tech analysis on VMW?? Tks J



  241. Oh Oh- Cramer on CNBC- AAPL going to 200. Sell the day the new Iphone comes out.


  242. crammer says to hold aapl till new iphone is announced. says aapl is on a straight path to 200!


  243. 3x etf- this is becoming more and more a casino each quarter.


  244. Valero – Funny building a wind farm to power their refinery…

    Valero CEO sees 4 refineries sold by end ’08

    if (navigator.userAgent.indexOf(‘MSIE’)!=-1) document.write(‘‘); else document.write(‘

    ‘);

    Reuters U.S. Company News
    1:21 p.m. 05/01/2008
     

     

    SAN ANTONIO, May 1 (Reuters) – Valero Energy Corp (VLO) Chief Executive Bill Klesse said on Thursday he expects the company’s Aruba, Memphis, Tennessee, Krotz Springs, Louisiana, and Ardmore, Oklahoma, refineries to be sold by the end of 2008.

     

    A decision on a possible sale of the company’s Paulsboro, New Jersey, refinery will be made by the fourth quarter of this year, Klesse told reporters following Valero’s annual meeting in San Antonio.

     

    Valero’s 16 refineries should be back at full production sometime in May, Klesse said, once work finishes at the Aruba and St. Charles, Louisiana, refineries, he said.

     

    Valero, the largest U.S. oil refiner, is building a $100 million wind farm to generate electricity at its McKee refinery in Sunray, Texas, Klesse said.



  245. aapl across r1, r2 is at 182.75 !


  246. FSLR- time to go long?


  247. nasdaq is on fire !


  248. AAPL/cramer- i cant believe it, eventhough he’s right on some level, 5 weeks ago he said it was dangerous and when it was 120, he didnt even comment on it.

    he’s too smart for that kind of wrongside, late to the party action. look at all the conviction he’s had in terrible names (AAAHHCHEWWW! NYX!).

    man, this is crazy b/c AAPL was so obvious 5 weeks ago (w/ the mac research and the deferred earnings angle etc)


  249. BBD – FSLR – Look at the Weekly Chart for 1 Year.  They look like they have just begun to correct.  My thoughts are that they will pull back closer to the 5MA tomorrow after such a big drop today, but that they will retrace further.  the 50% FIB is around 242 ….  I think they could go that low ……  your thoughts ?  We should also get OPT and Mark in on this.  I think there is good money to be had from this stock


  250. more cramer/AAPL- a kind and euphimistic remark would b to say he’s "flexible"


  251. GM – I can contruct a (flawed) bullish case up to $27.50, after that, anyone buying in is enough of an idiot that I can wait him out but this stock trades on sentiment more than fundamentals as well as being part of the Dow so there are just better fish in the sea to short or whatever that expression is.

    VLO – I said I might want to, I haven’t yet, there has been no reason to do so since we went in.  $1.50 for the $50s is VERY tempting now, especially as we are past earnings and we can roll them to the June $52.50s even if it jumps up on us but if we break through $50 then we should see $51.50 on this run so why cap it here?

    ISRG/Doug – very rational but I prefer to be more in the money like the Jan $240s that are about the same price but have just $30 in premium over 8 months vs the $80 in premium you’re paying for $21 months.  The big difference is that I capture 70% of a move up and by the time ISRG passes $320 (where I would be in trouble with a caller) my basis is gaining 1:1 with a move up so I don’t have a great deal of upside danger and I don’t need to worry about having to roll myself down.  This is a better position if you have a bullish outlook on the stock long-term.  The $25 you can expect to get back from selling the June $290s and the June $300s knocks your capital at risk down to $60 which is $50 in the money so for Aug-Dec you are pretty much making about $15 a month against your $60 investment with an excellent chance of holding onto that $60 in value at the end for a nice double over 8 months.

    INTC/Rank – after a $1 run, I’d 1/2 cover with the $23s.

    Raising prices – Yes, we’re supposed to but they’re messing around with the interface.  We’re at the point where we don’t want to take on more people in Premium right now and the Basic Member pricing was an intro anyway.  Plus Opt needs to start getting paid for busting his ass all day…

    RMM – when I enter a position that’s not a daytrade I usually enter 20% of a full unit which is no more than 2% of my available cash (not the total portfolio).  So if I have $500K in cash, I’ll be taking $5K as the first round of a typical positon.  On the whole, I don’t really care if it works or it doesn’t at first as my intent is to watch it and move 40% in ($10K) if it gets cheaper and I still like it or if it makes progress the way I thought it would.  Once I am 40% in I set a pretty strict 20% "action stop" which means at 20% down I have a decision to make.  That decision could be pull the plug, roll, DD or wait for clarity.  Usually I will not double down down just 20% so I will wait until it’s cheaper. 
    If come in at say $10 with 5 contracts and they go down to $4 and I DD for 20 at $4.50 if it goes 20% lower again it’s probably time to spend $3.50 to roll, putting me in a position that’s worth about $6.50 with a $8 basis (down 20%) and 50% invested ($12,500 out of $25K).  At each stage, if I am not already prepared to make the next required roll when it goes against me in the next round I am better off pulling the plug or I am throwing money down the tubes so it is a big decision for me to DD, then roll to a 50% investment. 
    So now I am at a lower strike than I intended with 40% of the calls I intended to buy at a cost of 50% of my allocated capital.  At this point I will usualy sell calls to make up some of the 20% I lost (like we did with GRMN yesterday) as the one time (like GRMN) I get blown out by my caller on the bounce is far outweighed by the 9 times I get my 20% back in premiums.  Since I am down here and down 20%, I have already decided I will DD or roll should it go any lower so I once again don’t really care what it does as I’m looking to buy more.  So the stock drops and the $6.50 falls to $5 and I stick my caller for $1 and my basis is now $7.50 with a $5 call.  I will either roll back in time and sell another call for another 20% or I may now DD for $5, which takes another 40% of my capital to buy 20 more contracts, leaving me in 40 $5 contracts at a lower strike than I intended to buy for $6.25, down 20% with 10% of my capital left and I MUST sell enough callers to allow me to roll again should I continue to be wrong.  After that, I will most likely set a 20% stop which means my 40 contracts will be worth $8,000 and I have $2,500 of cash left so that’s a $14,500 loss on $25K, just over 1% of my cash if the position goes that far against me.
    Covering VLO 75% with $50s.  XXX


  252. VLO – out in the DTP, that was a nice 20%.  XXX


  253. Phil
    Would you consider buying UNG stock and selling calls a  safe trade to produce income ? Selling June 150 call brings in $3.40. That’s a 60% return in one year.


  254. Fred,who would be the likely purchaser of these refineries?..I think Paulboro formerly was owned by Exxon and had to be divested when Mobil was purchased.


  255. Three CS that I legged into this week (just bought the long end) and wonder if I should sell my callers.  I don’t want to miss the May premium, but I wonder if I should wait until next week?

    1. PANL: Bought call 4/30 when stock was $14.84.  Now $15.42  (Earnings May 8)
    2. NDAQ: Bought call 4/28 when stock was $36.85.  Now $37.15    (Earnings May 8)
    3. ISRG: Bought call 4/22 when stock was $280.  Now $295

  256. VLO- nice trade,
    FSLR-I rarely trade this one so i was asking the group.  When I play solars I normally play SPWR


  257. I meant to say that earnings were May 8th, turned it into a smiley face!


  258. OK, my son’s best friend’s mother sent this link to me.  This is for BillBigD, Mark, and all you Texas boys here at PSW:  http://www.tagtele.com/videos/voir/11924
    Warning, do not open at work or where you will get in trouble for certain content.  Ladie, no offense to you intended, but you might better not open this.


  259. Ok I’m back -

    SS – yes, intraday off ema’s, pivots, highs, lows, closes, volume, price.  2 day macd and rsi some, same with 5 day 10 day, etc.  Always price, volume, candles, and MA’s since MA’s are just averages of price and nothing false in that info.

    James – yeah man, unfort same thing with GNK.  Don’t really know much about the company but looking at bni, csx, yrcw it looks like it can do no wrong!  (not a recomendation, just saying).  And the bloomie number wasn’t bloomie, simply me pulling in EPS and PE and multiplying them together before earnings… but that’s just numbers, not the stock.  I think like I posted earlier, means everything and nothing.  I’m sure all the analysts have increased their growth numbers now and it shows in it’s Avg PE.  Just looked it up and it shows me it’s worth $33… so go figure!

    FILM – hate to make quick decisions about things (feel like Cramer) … that being said the charts tripple topping here on the 6 month while testing its 200 dma today.  If it goes thru with any volume then it’ll look good to 65 next few month or so.  That said it’s a completley different company from MA or V.  They loan money, MA/V don’t. 

    Jamie – i got a whole bag of nothing, know nothing about VMW.  BBD is the man to ask.


  260. FSLR – I’d rather go long on CY, who died with the solars.  Jan $25s for $5.70 are a good deal for LTP.  XXX


  261. POT managed to get back to green , then faded. But a good comeback nevertheless.


  262. Potter
    Aruba is being purchased by Petrobras, the Brazilian oil giant.  While they haven’t said directly there is discussion that Tessoro may be interested and there is a private group that raised a bunch of capital to buy refineries.


  263. MOS- I guess the bubble will last another day. LOL  Sold at $3.4.  $1.4 gain on 2/3, .75 on the first 1/3.  Real nice return on a trade that was in trouble.


  264. BTW – SS – check out, on a 5 min chart, 5, 3, 3, 1, 10, 90… also use a 4/11/15 macd on a 5 min if you want.


  265. Ash
    Why sell the june when you can still make rent money on the May’s.  And why buy the stock, buy the Oct option 50 or 49 and sell the may 51.  But it looks like it is in a pull back.so you might want to wait a day or 2 to sell.


  266. Greg (NTWG)
    Rodney Carrington is brilliant…You should hear his song called "Dear Penis" that he did on the Bob & Tom Radio show.
    And no. I’m not from Texas. I’m from north of the border!


  267. Fred-hat Aruba purchase will be interesting, the Dutch seem to think that they are just a little bit better than the Latins.  Not trying to sound racist but I have spent alot of time in Aruba


  268. ag and fertilizer making a comeback but the lights are still out on solar.  MOS and POT are turning green.  get it!


  269. Singapore Steve
    Yes, you can start by selling May. But, is it relatively safe ? I would think, gas will always be in demand and begining in fall the price of gas wi  be much higher.


  270. General LTP question for anyone.  As the stock moves up, I know your roll your callers up (even if it takes a debit) so that you sell time premium and benefit from decay.    Rolling the long, however, would cost you time premium, so do you just tend to hold it until expiration and cash it then, or do you roll it up earlier, and pull out some cash.   If you do roll it up, what are the criteria?  Thanks in advance and feel free to point me to the K-1 if the answer is there, but I didn’t find it when I looked.


  271. bbd- For sure, I haven’t been to Aruba in a while.  Is the Divi Divi still there?  That’s where I used to stay but I now go to St. John every year.


  272. don’t count shell out of the bidding just yet !


  273. someone is putting a lot of effort to keep aapl below $180


  274. Highlander- NOW that would make a lot of sense.  Good insight


  275. Sweeeet!! A neat double on my long SNDK’s. Thanks for getting me into this one Phil :)
    SNDK JAN 2009 20 Call      +5   $5.20  $10.45  $5,225.00  2,625.00  100.96%


  276. HL – it can’t break 180 today, it’s too soon.

    SS – those were obviously for stochs above.  sorry didn’t write that.


  277. eph
    i try to roll further out in time, say oct to dec to gain more time to sell.  Usually you can do this for free.   I will roll a long up if i want to take profits off the table and it gives me better downside because of the lower delta.  just depends on the stock and whether you are bullish or bearish.   Last case is rolling up your longs tohelp pay for the roll up of your caller if you are short on cash.


  278. Even TM had a 15% decline in sales.

    I can’t believe Cramer didn’t say BUYBUYBUY FSLR at 10% off his last recommendation (just 3 days ago).  I guess he couldn’t see it while he was doing a 180 on Apple…

    UNG – I don’t like those things.  They are too thinly traded with too much spread and no, I don’t think UNG will stay up at this level, there’s a reason someone would rather pay you $3.40 for the right to buy your call than buy the call themselves, that $3.50 won’t even protect you from a bad hour’s trading.  If you are willing to buy UNG and hold it then don’t buy UNG an sell the June $51 puts, which sells you the stock for $48 if it drops (and you can spend just .60 to roll them further down, a 40% pre-payment discount).  Even if it drops to $48 (lets say that would be where the current $51s are) the call would be worth less than the $2.80 you sell it for.  In fact, if you had sold the $55 put, with the stock at $50.63 that put is now $4.75 and it only costs you $1 to roll them to the June $52 puts, putting them into $2.50 in premium and moving them down $3.  So if you did that every month for 12 months you could roll them all the way to $14 for $12, not a lot of downside risk there….  XXX   The only real danger is a very violent sell-off but with $1 rolls on an index, it’s doubtful.

    PANL/Eph – I love that business but I’d 1/2 cover over the weekend at least.  NDAQ – those I would risk on this rally.  ISRG – I’m waiting for $310 but I’ll cover over the weekend with maybe 75% $300s.

    Rolling leaps – You do it when you are too far in the money, that would generally be when you have a 50% profit and you can roll up $20 for $15 in cash but it depends on a ton of things.  As a rule of thumb, you don’t want to be too deep in the money but you can follow the opposite of the 35% rule (you want to improve your position for 35% of the cost of the bracket) and look to roll to a higher bracket if they are willing to pay you 65%.  If you always roll down for 35% and always roll up for 65%, you can make tons of money just doing that with a volatile stock..

    XOM Jan $95 puts are $10 and you can sell May $90 puts for $2, that’s 20% for 2 weeks!  XXX


  279. Phil:

    how much has pil dropped in price today ?


  280. Yeah .. Phil I ended with 1/2 ITC MAY 23 cover .. but those 24 were traded today so I have to live with them till tomorrow.. don’t think the will bother me much


  281. Phil- tactical question with my V spread. Sep65/May67.50. I can roll the whole thing up to the Sep85/May85 for 1.50 or so and put my caller into $3 of premium, but the caller is providing me with great downside protection. Is it better to let my caller protect me over the weekend and push him into premium early next week, or just roll him?


  282. Ash
    If you are in the business of selling premiums you want to collect the rent every month you can.  If your caller goes ITM then you can always roll him up for about even to the next month and ATM or OTM. Every now an then you will get a dead beat renter who won’t pay you.  so just figure that 60% of the time you should collect.


  283. billbd,
    from my view, aruba has always seemed a notch above the rest of the caribbean by almost all measures. that refinery, like the ones in texas is well run and has solid local support.


  284. MA  What do you think about legging into an Iron Condor, say selling 300/310 call for 2.90 and waiting for a pullback to put on other leg?


  285. Phil
    Thanks for the detailed explanation.


  286. INTC 23.12 think good support/ressistance.. conversion of a long and short fibbonaccis retracements


  287. JOSB waking up.

    AAPL below $180 – that’s the 5% rule, we discussed it yesterday on Apple.

    SNDK – Congrats JB – they are one of my favorites to play.

    RMM – Was that oil?  It’s down just $1.24 at $112,22 after being right down near $110.  Look at the mad buying that started at 1pm sharp on USO, that pretty much mirrors the NYMEX pump job into the close but if look at the double top last week on USO at $96.50 (oil $120) and $89 is down $7.50, which is just about 7.5% so let’s call the top $96 and say a 7.5% pullback would be $88.80 and a 20% retrace would be $90.30, so that would be where we expect USO to bounce to according to the 5% rule.  If they break above there, resistance is 5% off the top or $91.20 but finishing below $90.30 is an almost certain indication we’ll see 10% down tested at $86.40, which is about $107.50 for oil.

    V – I was stuck with those too, went to 2x the Sept $85s and Jan $75s and rolled caller to 2x the $80s since they lose 2x on a pullback that way and the roll to the June $85s is all premium.  Either way my answer would be yes to putting him in the $80s as you can always roll him back down but a buck is a buck for now!  I wouldn’t go to the $85s yet, especially not ahead of the weekend.

    MA – way too volatile for a condor.  We are going to have to painfully roll our butterfly next week.


  288. AAPL breaking .50 with big volume… I may just eat my words yet LOL.


  289. aapl – phew!  keeping true to the sentiment.  I see a close above 180 tomorrow going into the weekend.  It has to to make everyone happy ROFL.


  290. ok covered my aapl w/ 175′s @ $8.00 !!!


  291. GOOG going for $600???


  292. GOOGLE – i love u


  293. could be the 2nd day of the 6 day clock w/ aapl stuck @ around $180+  (top of wick) !


  294. Phil – AH question.
    At 2:59 you posted: “..RMM – when I enter a position that’s not a daytrade I usually enter 20% of a full unit which is no more than 2% of my available cash (not the total portfolio).  So if I have $500K in cash, I’ll be taking $5K as the first round of a typical position. ..” 2% of $500K is $10K, 20% of $10K is $2K. Have I misunderstood or it is arithmetical error?

  295. All be Gawd damned… look at the level two volume at 180…


  296. SIRI up with volume at close


  297. amazing,  yesterday’s wick is today’s close !! how about that !!


  298. mark- can u expand on the level 2 volume comment?


  299. That’s awesome.  They MOC’d AAPL at 180 (see the 412k shares on close print at 180 at the top).  Incredible.


  300. I don’t know why I thought we would pull back into the close today.  Would have been a nice day if I hadn’t bought some index puts recently for insurance, and let them eat up all my profits and then some today.  Well I sold them now right after the close, so I’m sure we will open down tomorrow just so the market can say FU to me one more time.


  301. *METLIFE 1Q OPERATING EPS $1.52; ANALYST EST. $1.48      :MET US
    MetLife-MET trading halted, pending news
    *METLIFE HAD NET REALIZED INVESTMNT LOSS $560M          :MET US
    *METLIFE 1Q OPER EPS $1.52                               :MET US
    *METLIFE 1Q EPS 84C                                     :MET US

    -->


  302. mark- now i’m  more confused, but i still dig this stock


  303. Bronek – no my math was bad.  The problem is I have much more than $500K so I forget….  I think for a smaller portfolio the key is to try to keep it down to 10% of your avalilable cash, preferably 5%.  Realistically, you should expect to be buying $500 lots so that would be $2,500 x 20 = $50K minimimum to even consider this strategy. 

    Wow, another nice day!  I hope we coast into the weekend as I’m missing tomorrow afternoon!


  304. Guys
    I’m having a little trouble following Phil on the V play. I know he double down on the sept and jan calls.
    What does he mean when he "rolled caller to 2x the $80s since they lose 2x on a pullback that way and the roll to the June $85s is all premium"?
    Did he double down on the short may 80 or did he cover ans went to another one?


  305. xian – see my 4:04 comment.  The huge print at the EOD was an MOC for 180.  Didn’t think they’d bring it up that much but man was I wrong.


  306. for the edification of other members, MOC stands for nasdaq market on close orders which attempt to execute as close to the close $ as posssible. they must be submitted 5 minutes w/i time of market close !!


  307. and your monthly OJ update (yes I am joking)

    BN 15:08 Orange Juice Falls as U.S. Supplies Increase, Dollar Gains


  308. CHK- big beat $1.09 vs $.93


  309. HL – yes, but actually they have 20 min.  so 3:40, not 3:55.


  310. thanks mark and hl


  311. 15:18 *EOG RESOURCES REAFFIRMS FORECAST FOR ORGANIC PRODUCTION GROWTH
    15:18 *EOG RESOURCES REAFFIRMS FORECAST FOR ORGANIC PRODUCTION
    15:18 *EOG RESOURCES 1Q ANALYST EPS EST. $1.64                :EOG US
    15:17 *EOG RESOURCES 1Q EPS 96C                               :EOG US
    15:17 EOG Resources Reports First Quarter 2008 Results
    15:17 *EOG RESOURCES 1Q EPS $1.89 ADJUSTED                     :EOG US
    15:17 *EOG RESOURCES 1Q EPS $0.96                              :EOG US
    15:17 *EOG RESOURCES 1Q EPS 96CV                              :EOG US
    15:16 *EOG RESOURCES 1Q EPS 96C                               :EOG US


  312. *EOG RESOURCES DOMESTIC NATURAL GAS PRODUCTION ROSE 19% :EOG US
    *EOG 1Q INCLUDED $469.8M LOSS MTM COMMODITY DERIVATIVE CONTRACTS
    EOG Resources 1st-Quarter Net Income Rises on Higher Gas Prices


  313. mark,
    fyi, it is 10 min not 5 ! only nyse allows for 20 min !
    All MOC orders must be received at Nasdaq by 15:50:00 EST and cannot be cancelled after 15:50 EST.
    All MOC orders must be received at NYSE by 15:40 ET unless entered to offset a published imbalance


  314. HL – that is technically "correct" but in the institutional world most won’t accept them past physical exchange floor mandates (3:40).  B/c 10 min to find a market for it is much harder than 20 min.  FYI (little sell side info fo ya!  ;)   )


  315. Phil – Re position sizing. Assuming total allocation to LTP & STP @$500K each and DTP @$50K(min) would you still recommend 10 % of available cash? I was allocating each position so that in worst case I will not lose more 2% of total assets. Therefore, position varied as a function of the stop loss orders and/or cashing-out the profits. I know that it is my call, but I will appreciate your opinion. Thx

    -->


  316. Drluong- the 2x play is a specific type of rescue for when a stock moves way beyond a simple roll. Phil doubled the number of long calls he owned and sold twice as many May shorts, to collect the premium. The comment "lose 2x on a pullback" just means that he has twice as many callers, so they lose twice as much premium if the stock pulls back.
    The comment about the June 85s is that since the stock is trading at 85, the options are all premium (no intrinsic value). For selling options, this is our best case.


  317. Bronek- there’s some great stuff in the k1 project by Phil and Sage about allocation and position management.


  318. Phil – (Interesting that Bronek should ask a similar question !) Do you know what % you are invested/cash in general. Or should I work it out from the spreadsheets ?

    Just realised from doing my end of month accounting that I’m less that 5% invested. The 1st Q drop obviously made me more cautious than I realised.

    However I’m really happy to be up 9% on the month. (Nearly 100% on invested.) If I compounded that then maybe I dont need to invest more. :-)


  319. K1 – Re portfolio. You are right it a great stuff – thanks for collecting it into that area. It seemed that Phil evolved his thinking, so I wanted to keep up. Again, thanks for the link to the k1 project

    -->


  320. Good night yawls.


  321. V/DrL – I orinally was 1/2 covered, then I rolled those callers up to 2x then it kept going up so I added another round of calls at a higher strike and then roller the caller up to another 2x in the $80s so I’m fully covered again.  What I meant about the pullback is that if my callers are 10 $70 calls at $15.65 they have no premium and I owe my caller $15,650.  If I spend $10,000 to buy the Sept $85s for $9.95 I can roll my caller up to 20 $80 calls at $6.60 each.  That’s $13,200 so I spend another $3K but now he has $1.20 in premium x 20 contracts so that”s $2,400 in premium I just sold him.

    If the stock drops $5, the 10 $70 calls would lose $5,000 as there was no premium.  The $80s would be worth zero if we finish at $80 for a loss of  all $13,200 to my caller on a $5 pullback into expiration.  The Sept $90s are $2 less than my Sept $85s so I would lose $4,000 but that still beats just paying him the $15,650 I already owe him plus I can sell 2X Junes if I want or just kill the new 1/2 of the trade I set up to knock down my caller.

    Of course if it goes up, I will have to roll all the calls up but the June $85s are $5.80 so I’m gianing position at minimal cost.

    CHK/EOG – I love it that they’re barely getting a reaction!

    Bronek – no, that is your call.  I rarely go past 50% invested on a position because by that time I would have rolled and doubled down so usually I’ll pull the plug with a 20% loss (of the 50%) and not go DD again.  It depends on the position too, I have $1M in just GOOG sometimes but that makes me uncomfortable and I try to cut it down to $3-400K tops.  Same with Apple, sometimes the big boys get away with you but if you love them and your’re comfortable trading them then no big deal (unless we have a tech crash and then we just jump out the window!).  Also don’t forget I’m in 80% cash and with $2.8M cash in the STP, I sure don’t go spending $100K per position but I usually put about $20K to work initialy if I like something but sometimes buy just a few to "keep my eye on something" and then add to it later.

    Like right now I have $3,250 worth of SIRI calls which have been red for a month and I’ve had no inerest but they popped 20% today which alerts me to take a look at getting another round, probably much more than the 50 contracts I have if they look like they’re going to break $2.80, where it becomes worthwhile for me to sell $3 calls against them.

    Anyway so I pretty much play the STP more like I have $100K to spend on any given position but my 28 positions are only using $765K including offsets from the callers.  In the LTP I have 52 positions at net $1.5m and the Stock Club has 27 at $1M but that includes Apple and GOOG, which are kept out of my other portfolios in Complex Spreads but that’s the best answer for you.  In a large account, my average position size is $30K net of callers so maybe $45K since I tend to be 1/3 coverd. 

    DB – Overall I’m up to maybe 1/3 invested as I’ve made an effort to invest more this month ahead of the rally.  We’re heading up so fast I’m not too keen on chasing things until we’re safely over 13,300.  As usual, I would feel much better seeing a healthy pullback after this almost uninterrupted 10% run off the March bottom.  200 DMA resistance will be tested at Dow 13,053 but don’t forget it’s not the same Dow mix that created that line so it’s meaningless (take that TA slaves!).  We’ll watch the 200 dma on the S&P at 1,433 and the Nas at 2,524 and the NYSE at 9,480 with much more interest. 

    Transports just shattered the 200 dma at 2,732 with a 96 point move today and the RUT (753) and the SOX (423) have a ways to go.  Once we hang out above those numbers for a while, then we can talk about deploying another 30%.


  322. EOG  down on that report.  Let’s see what the morning brings.  At least we held 13000 for the day.  WAHOOOO!


  323. Phil – Thx.


  324. CHL – the fish that continues to get away. This stock continues up making the full cover roll a trickey job.  Feels like I’m chasing this one. Would welcome any insights. Here’s Phil’s last take. The even roll from the 80s to 85s isn’t going to happen, and I’m not sure I want to roll same strike to same strike again as you have to pay the piper eventually.
    April 23rd, 2008 at 3:51 pm
    CHL/MCK – wow, no wonder you are concerned!  Still, assuming we hold $90 without a pullback you’re looking at a $5 value to your $85 callers and you’ll just roll them up to the June $90s about even, how is that a bad thing?  Right now they are giving you great protection but you should certainly put in for an even roll from the $80s to the June $85s (now $2.30) which you might get on a downspike.  You have about $20 on your long side that is more than $10 in the money so all you need to do is sell $2 per month in premium and you make 50% on your money, so don’t sweat the small stuff.  ONLY if you don’t see your way clear to picking up $1.50 iin premium next month should you be really worried and, right now, Rolling the May $80s to the June $80s gets you $1.75 in premium worst case.  In the course of 6 months of rolling, you need to accept the possibility that CHL may go down a little and you will be damn glad you have callers that are $5 in the money…


  325. Phil – Thanks. It’ll be interesting to see if/where you deploy that next 30%. Apart from daytrading I’ve been struggling to find places for new money, everything looks so "toppy" at the moment.


  326. mck
    I have chased my fair share of fish too.  worst are the ones that gap up quickly.   it is ok if your longs are 2-3 strike or better so that you always maintain a delta over your caller.  Sometimes depending on cash  I will roll up my longs to generate the cash to roll up my callers which helps my longs for downside protection and I don’t make anything  on the longs but I should be able to collect the premium.
    Stocks that are consolidating or slight trading up seem to give me less headaches.  Big ATR stocks can go either way but your also able to sell and buy back rent a couple aof times a month. 
    I will start off with 1/3 to 1/2 covers at the beginning of a new month then wait to see what happens.  I try to fully cover by 2 weeks to go because the premiums star to decay and that is when you can make the money.  In that last week if your caller is ITM it really hurts because their delta starts to go to 1.  So I try to keep them ATM.


  327. I’ve noticed that a number of energy firms have missed on revenues like EOG, this despite the higher unit costs.  This would worry me as an investor since it implies that demand is even less than planned.  When prices eventually drop they will only acerbate the revenue issue and profit issue further.


  328. is this some kind of trend confirmation?

    Kuwait Sovereign Fund May Boost Citi, Merrill Stakes (Update2)
    By Jesse Westbrook and Peter Cook

    May 1 (Bloomberg) — Kuwait’s $250 billion sovereign wealth fund may boost its stakes in Citigroup Inc. and Merrill Lynch & Co. as it pursues investments in companies battered by subprime- mortgage related losses.

    “The valuation in the markets in the U.S. and Europe, we think, has created a lot of opportunities,” Bader al-Saad, the Kuwait Investment Authority’s managing director, said in an interview with Bloomberg Television today. “We have confidence in the management” of Citigroup and Merrill, he said. Shares of both companies rose in New York trading.

    The KIA in January bought a $3 billion stake in Citigroup and invested $2 billion in Merrill to help replenish capital at the companies after they suffered writedowns on mortgages, bonds and loans. Banks and securities firms have absorbed more than $300 billion of losses since the collapse of the subprime- mortgage crisis set off a global credit contraction.

    Al-Saad said his fund also purchased a 5 percent stake in Related Cos., a closely held residential property developer based in New York. The KIA moved away from pursuing investments in developing nations last year to focus on financial and real estate companies in the U.S. and Europe, al-Saad said.

    “This is a temporary shift,” he said.


  329. Singapore – thanks Steve. I have to update my basis calcs as it "feels" like I keep paying to roll on this particular trade and at some point I either exit altogether (cash the longs) or get a break and win a few rents. It’s also hard to crack the full cover if you’re behind and rolling same strikes or not even otm. Great market to be initiating positions but seems tough if you’re rolling to try and recover.


  330. mck
    I agree in a up market or a really up stock it is hard to stay ahead.  i see too many people here buy and sell the same strike and that puts them way behind if the stock takes off. Or worse they sell a lower strike.   That’s why i like 2 or more strike differences and in an bull market you have a much better delta than your caller.  If your in a bear market even strikes would be just fine.  But also I have looked at option profit /loss charts and you can win on a stock if you do a 3/4 cover and it goes up where the caller is DITM as long as your longs are a few strikes below.  Your extra longs make up for it and your profit hits a plateau.   Maybe if it starts to get away just close out the caller and let your long run.  Just depends on cash available too. 
    I plan on being out of the country for for two months at a time so my approach that I am developing is a little more conservative but it will allow me more freedom to travel and play golf.


  331. Singapore – thanks for your good thoughts. My last roll, I predicted more up for the stock, so I made myself pay extra on on most of the callers and go up a strike rather than sideways. The cash flow on sideways was tempting at the time but I’m glad to have most up a strike now. Unfortunatly up 1 strike is still ITM now.  Problem is the stock was a quick turnaround earlier than I anticipated. It was easier when it was going down or sideways (dec – march) but it turned up quick and caught me with full cover and hasn’t had a break in the up movement since mid march. I was pondering just what you said – maybe just buy off some of the covers to get to a partial, but at the end of the day, I’d still sell more callers just further OTM and maybe throw in some naked just to try and make up the difference. What I need is to write a program to sift the strikes, premiums, etc. and come up with the scenarios. As it is I plug the pricing data into a spreadsheet now but some code could try all the iterations and come up with the best premium allocation, or at least lay it out for easier consumption.


  332. mck
    AAPL is a good example.  I knew it was going togo up but i sold covers anyway.  and it just kept going up and up.  I am staying ahead on it but i could have made a lot more on that one by being naked and waiting for a cosolidation tosell covers.    I use a option pricer in Power options to look at future scenario’s.  CAn plug in future stock price on any date and also changes to volitility along with how contracts of longs and shorts I have to see the profit curves. 
    Well it’s happy hour time.  will be back in a couple of hours after a few good local micro’s.
    Cheers


  333. Singapore – cheers!


  334. CHL – So the roll is no longer even but you can roll him for $2.10 (although the $80s do still have .60 of premium so maybe $1.75).  That would put him into the June $85s with $3.50 in premium, why is this a bad thing?  Notice that on 4/23 the stock was at $89 and then it dipped to $85 3 day’s later but now, with 2 weeks left and $1.30 lower in strike.  At the time I said no hurry, the roll to the $85s was $2.30, now $2.10, next week $1.90…  Look at the climb CHL made to $103 in the fall.  Would you have been served better rolling him up constantly or letting hom drift in the money and letting him protect you  from the $20 gap down and subsequent $30 sell-off?

    Kuwait – very smart guys!


  335. Boeing

    For the plane addicts…Boeing order book updated every Thursday.
    http://active.boeing.com/commercial/orders/index.cfm


  336. CHL – hey Phil, thanks for your thoughts on the CHL roll.  It’s very interesting and thank you. The roll on the 80 to 85s never got to even (the 85 to 90 was near that). I’ve watched it pretty close. So, it looks like I could go for same strike and drift ITM as you say, or bite the bullet and go up for about $2 (maybe less closer to x-day). I hear you, I don’t like chasing him up but my outlook for CHL doesn’t have quite enough bear in it to think chances are good of a big pullback.
    On the history, I don’t know how well off I’d have been in the fall "drifting in the money" if I had sold callers in May for instance, and then rolled them sideways until october during which time the stock went from 46 to 104. Wouldn’t I be sitting on some very DITM callers with 50 or 55 strike? Say I started out selling 55s for $3, today I’d owe the caller 10 times more (something like $34 intrinsic). I would have watched my IOU to him "drift" from $3 up to $49 (CHL at 104), sure – enjoyed the cushion when it dropped, but still owed a hell of a lot more than what I wrote initially. At that point I suppose you just look to your longs for relief and call it a trade that didn’t work out so well?
    So as I look at it now, I’m thinking about what happens if I end up chasing him here, for instance if it behaves like it did last summer/fall and cranks back up to 52wk highs. At some point with full cover I lose, so I need that rainy day with a correction, and if I don’t think it’s coming I need to abort.  If I roll to the 85s with 3.50 premium, great as long as the stock doesn’t end up at 90 or 95 by next roll. If the market get’s moving here (I’m not that bullish) and we don’t get a breather where I can throw off some cover.
    Anyway, I really apprecaite your comments and approach. Feels like trench warfare. Trying to get it hammered in.


  337. Margin question – how’s anyone’s experience with OXPS or TOS vis-a-vis trading on margin, ease of computing effect on margin for specific trades, resolution of margin calls, etc..?? I’m having a heck of a time with Fidelity (not good). They don’t have any tools apparently that can calculate margin related to a particular position. If I get a margin call, I have to get on the phone with a rep who then uses calculator/pencil/paper to make some "guesses" as to what effect unwinding a position will have. Occasionally I get connected to a wiz kid that can dance through it. But try going through that exercise when you’re dying to make a trade. I can do the calculations but why should I guess – shouldn’t they have it programmed? They sure have to in order to tell you how much your call is… Today they restricted my account but said it was only related to the margin call and would clear as soon as I met it. Fine, I met it but an hour later the restriction still didn’t clear. They told me they had to find some particular guy to unrestrict it. Holy crap - he was off at lunch or something and they couldn’t find him? Not only that, but I had calls that the rep could see which I couldn’t see in my online balances. The reps would say the systems they have don’t always match either. It seems like a complete cluster but I’d love to hear some other experiences before I switch.


  338. mck
    Sounds like you need a few beers after what they put you through.


  339. mck…no experience with OXPS, but TOS was, to me, amazing…no complaints whatsoever about anything…always someone available to answer anything i needed to know…answered my bs emails during weekends (i asked a tech guy which mobile phone would work best with their mobile platform), he exchanged several emails with me on a saturday morning…i once had a 2 contract spread that i wasn’t sure about and wanted to get filled, emailed them and asked them to look at it, was filled seconds later at a fair price…their margin stuff and really any portfolio analytics I never knew I needed were all automatically there and in real time…I had to switch to Ameritrade for a professional account through my job and was shocked by the lack of sophistication on all levels, from the point of view as a novice options trader and a former programmer, and the fact that I had to wait for special people to come to work in the mornings to answer my margin and options questions…they also sent me my closed accounts tax schedules months after I closed the account (they have a simple schedule D kind of thing)…oh and one really cool thing about TOS, the day NYX became public, I put in a market order for 50 shares before the open, i got filled at the lowest price of the day and sold it a few hours later for an instant G or so, i thought that was pretty sweet…I actually learned about options through their seminars and the book they reccommended (nattenberg), and Phil of course…so yeah, hope that helps


  340. mck / margin calls, computation – It’s been a while since I’ve had one, but ToS , IB and Scottrade Elite platforms show you the effect in realtime, so if you have a problem, you can decide quickly which of the positions you want to liquidate. On IB, you need to think quickly, since they will auto-liquidate within 20 minutes of signaling you (or next market open, whichever comes first). They will always pick “the wrong one”(!) IB has a whole web page disclosing the margin computation, and I’ve found that the math is mostly the same at all of the popular online brokers that do spreads. I’ve had a number of trading desk questions with OXPS, and always very knowledgeable service, if you pick the right dropdown on ticket entry. If not, it might take an internal referral, but I never felt like I got the wrong answer, once signed off.

    We’ve had desk issues with Fidelity as recently as six months ago.


  341. mck
    I use OXPS.  I keep my money in there and have been happy with similiar service levels especially when you need it.  But I do use the TOS platform for charting, their thinkback is good too,   and also like to view their option chains but find that their chains do not update to market conditions as fast as my other two feeds.  But I do like their option chain configurable layout.  .  I mean it is minutes or more at times.  Their charts will say one thing but their options chains really seem to lag and are not as current as my other two feeds.     OXPS sent me an email today asking about their service so I layed it all on them.  Thought that was good to ask.


  342. Newpar/Sakiko/Steve – thanks for all the great input, I really appreciate it. I was frankly about fit to be tied today. I watched some sweet deals disappear in front of my eyes so they definitely cost me money. I missed rolling a TON of CHL today when the stock hit the lowest point in several days – that probalby cost me several thousand alone. I have no problem running close on margin for the leverage, or making good on it if I can just see the numbers and understand what’s due and when. They don’t seem to be able to execute on that.
    Sakiko - computations do look mostly similar, lower/higher of strike, +/- premium, etc. – nothing magic about it. I don’t know why they can’t do it. They actually have a pro-forma margin calculation for sale of equities (plug in the equity position and # shares and it tells you the effect on margin balance), but they don’t have it for options. The IB 20 minute autoliquidate sounds nasty!!!!
    At a minimum I need to jettison some funds over to OXPS and/or TOS and get started moving out of Fidelity.


  343. SO it is good time for Puts?

    Aapl at 180/182.5 likely to go to 165?
    MA at 298/299.5 likely to go to …?
    GOOG at 598/588.5 likrly to go to ..?

    Any other?


  344. How do we see the 5MA for fslr ?

    Doug
    May 1st, 2008 at 2:57 pm | Permalink

    -->
    BBD – FSLR – Look at the Weekly Chart for 1 Year.  They look like they have just begun to correct.  My thoughts are that they will pull back closer to the 5MA tomorrow after such a big drop today, but that they will retrace further.  the 50% FIB is around 242 ….  I think they could go that low ……  your thoughts ?  We should also get OPT and Mark in on this.  I think there is good money to be had from this stock

  345. futures up HUGE on this:  7:30 *U.S. APRIL PAYROLLS FALL 20,000; UNEMPLOYMENT RATE AT 5%
    CVX:  7:31 *CHEVRON 1Q EPS $2.48; ANALYST EST. $2.40


  346. May 2 (Bloomberg) — The U.S. lost fewer jobs than forecast
    in April, and the unemployment rate unexpectedly dropped,
    signaling that the economic slowdown didn’t gather pace at the
    start of the second quarter.
    Payrolls shrank by 20,000 workers, following a revised
    81,000 drop in March that was larger than previously estimated,
    the Labor Department said today in Washington. Economists
    surveyed by Bloomberg News projected a loss of 75,000 jobs. The
    jobless rate fell to 5 percent, from 5.1 percent in March.
    “So far there’s a mild start to the recession,” Aaron
    Smith, an economist at Moody’s Economy.com in West Chester,
    Pennsylvania, said before the report. “The data we’ve been
    seeing is weak but it’s not deteriorating endlessly.”
    An average of 121,000 jobs a month were eliminated in the
    first four months of the 2001 recession, indicating that the
    current slowdown may be milder by comparison. Seven Federal
    Reserve interest-rate cuts and the arrival of government tax
    rebate checks may be enough to help consumers weather the slump
    in home values and jump in fuel costs.


  347. mck
    Fidelity has a margin calculator on line you can use.  It tells you  exactly what the margin requirement is.


  348. fredrang – thanks for your note, take a closer look though and  try plugging in an option contract in that calculator. Unless they changed it overnight, it only works for equities.