Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Thursday Thump – Delusional Systems Kick Back In


It's what they and their hired psychiatrists call delusional systems. Needless to say, ‘delusions’ are always officially defined. We do not have to worry about questions of real or unreal. They only talk out of expediency. It’s the system that matters. How the data arrange themselves inside it. Some are consistent, others fall apart. ” - Thomas Pynchon 

If we're worried about Europe again, it must be Thursday, right?  

We did get some morbid GDP numbers out of Europe and – spoiler alert – their economy SUCKS!  Why does it suck?  Oh, I don't know – maybe because they practice a wacky little thing called AUSTERITY – which has been, over and over and over again, proven to be the absolute WORST thing to do when your economy is slowing.  

Painful MedicineI know this is a very hard thing for Conservatives to understand because it involves FACTS, but austerity does not work and has never, ever worked.  In 2011 the IMF commissioned a very serious study that looked at 173 episodes of fiscal austerity enacted by "Advanced Economies" over the past 3 decades and found 0 incidents in which austerity was linked to expansion.  So let's not get all shocked that Europe's GDP sucks – this was the GOP plan for America if Romney had been elected playing out across the Atlantic.  

These are not opinions – these are facts.  Europe is right where they are projected to be two years into an austerity program – losing tons of jobs and losing profits.  Even US companies that do business in Europe are feeling the impact – but this is not news – not to us, anyway.  We've been pointing this out since last summer and just last Thursday we were discussing which Nigel Farage clip best summed up the disaster that is Europe.  

This one is relevant to today as Farage slams Francois Hollande for the economic decisions he's making in France and, lo and behold, today we get the disastrous French GDP data.  In fact, I have mentioned for the past week that we were betting on a downturn based on the fact that the Euro has gotten too strong and the Dollar has gotten too weak – as summed up by Farage in this clip.  This morning, in Member Chat, we took advantage of panic in Europe to short Oil Futures (/CL) again at $97.50 (same line we always use) and we caught a nice ride back to $96.80 with a stop back out at $97 and a lovely $500 per contract gain to start our day.  Of course, yesterday I mentioned $98 as our shorting line in the morning and that was good for $1,000 per contract – why trade anything else?  

SPY 5 MINUTE We'll be doing a Futures Trading Workshop at the Phistockworld Conference In Atlantic City this April – I hope to see a lot of you down there as I really think we should be discussing Futures trading more often.  By the time you are reading this – the easy money for the day will have already been made and the the panic selling will have subsided and, hopefully, our rally can resume.  We were only looking for a 1% pullback this week and, in yesterday's chat at 2:52, I reminded our Members that there was no reason to be bearish as we weren't even close to our target pullbacks (set earlier in the week) of Dow 13,850, S&P 1,502, Nas 3,160, NYSE 8,840 and RUT 905.

As you can see from Dave Fry's SPY chart, that call marked a dead bottom but, to be frank, the trading volume is so thin that we may be the tail wagging the dog and it's our own bottom-fishing that brings up the market.  Either that or I just have exquisite timing…

Our earnings play of the day was a couple of long and strong calls on CSCO but we also played the short-term move this way:  

CSCO – Better to have some conviction and say CSCO won't go below $21 and, if it does, you don't mind working it off and selling 5 Feb $21 puts for .54 ($270) and buy 5 May $20/19 bear put spreads for .29 ($145) for a net .25 ($125) credit straight up and your worst case is owning CSCO at a lower cost than it is now while anything up is at least a $125 instant winner plus whatever is left on the long spread.  

Longer-term on CSCO, this may be the last time you see them this close to $20 – ever.  The 2015 $20 puts can be sold for $2.75 and you can use that to buy the $22 calls for $2 for a net .75 credit so $19.25 is your worst case with an unlimited upside.  You can be more conservative and sell the April $21 calls for .75 and now you have a $1.50 credit and all the time in the world to roll the calls if CSCO goes up fast but they've hit all 4 of their last earnings and last Jan was a 10% beat and this year they are only looking to go +.01 (.48) despite very steady 5%+ growth all year, which should be .49 or .50.   

Both of these trades should be right on the money this morning (CSCO came in at .51 but guidance was conservative, so flat at $21 – which is fine with us) and we also did a fun short-term play on AAPL, which I can't disclose yet as some of our Members may still be filling it.  Nonetheless, there are tons of great trading opportunities as we still have two more weeks of a lot of earnings reports and then a small break in March and we're right back at it with the early reporters coming in.  This evening we hear from (among many); A, CBS, CRAY, GG, KYAK and WRI and tomorrow morning we get BAM, BKW, CPB, ENB, KRFT, PPC and UPL – no wonder we are able to find earnings plays almost every day!  

Don't forget next week will be a short one but I see MDT, MAR, NBR, EV, MGM, TOL, SAM, HNZ (who just got a buy-out offer from Berkshire), HRL, CEC and ANF as some of the highlights as we also get a lot of Housing Data, PPI, CPI, Fed Minutes, the Philly Fed and Leading Economic Indicators – not bad for a short week and just what we'll need to shake off the Euro Blues.  

We're still expecting to see those 1% pullback lines tested this week.  Tomorrow is expiration day, the Dollar is back over 80.50 and, hopefully, oil will sell off – if not now (because of the long weekend) then next week should be a good one.  That's why we rolled back our short oil plays yesterday, rather than take them off the table.  If nothing else, they make good hedges to our still-bullish overall portfolios.  

Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!

Comments (reverse order)

    You must be logged in to make a comment.
    You can sign up for a membership or log in

    Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

    Click here to see some testimonials from our members!

  1. Look at HNZ chart yesterday how "they" blew out the stops on the opening.

  2. Oil Lines

    R3 – 99.42
    R2 – 98.76
    R1 – 97.94
    PP – 97.28
    S1 – 96.46
    S2 – 95.80
    S3 – 94.98

    Yesterday's high and low – 98.11 / 96.63

  3. Phil ABX excellent explaination on the roll !!!!

  4. Looks like that NYT article on Tesla was a bit "fabricated":


    According to Tesla, Broder was given explicit instructions for his drive: keep the speed at 55 mph and turn down the climate control. Broder claims to have set the cruise control at 54 mph and at one point writes he, “limped along at about 45 miles per hour.” However, the logs released by Tesla show that he drove at speeds ranging from 65 to 81 mph, and kept the interior temperature at 72 degrees, increasing it to 74 degrees at one point.

    Tesla’s data claims that Broder never completely charged the Model S during three separate charging sessions, including one charge before the final leg of his trip, when Broder disconnected the charger with an indicated range of 32 miles, despite planning to drive 61 miles. Additionally, Broder claims to have charged for 58 minutes during the second leg of his trip, although Tesla’s data alleges it was only connected to the Supercharger for 47 minutes.

  5. Good Morning!

  6. PP for today:

  7. StJean / TSLA
    It's still egg on their face.  They sound like a overbearing parent:  "Don't drive too fast!"  "Make sure you dress warm, cause you can't have heat on", etc.
    It's really hard to give consumers a product that comes with a huge list of Do's and Don'ts.  It's still a niche product, but imagine if you had all these rules and restrictions in the mass market.  I'm still Long though!

  8. TSLA / Burrben – I think that we will need to adjust our "driving" habits anyway! One day this will probably look completely normal to us. I can imagine when my grand-father went from a horse carriage to a car (and it did happen).

    It's still bad journalism no matter how you look at it. No good for the NY Times!

  9. PCLN news?

  10. Good morning! 

    Buffett buying HNZ for 20% over a close that was already up 10% since Thanksgiving shows you that this market still has legs.   As I've been saying, this M&A stuff is just terrifying for the bears as it's not just HNZ that jumps but the whole sector.  That's why you can't just sit out these rallies – we can get to silly valuations very quickly and THEN it's time to get to cash.  I don't think we're there yet, but that's what our levels are for anyway – to take the emotion out of the equation for both bulls and bears. 

    To that end,  we were looking for pullbacks on Tuesday that never came and, even in this morning's Futures drop, we didn't come close to:

    • Dow 13,850
    • S&P 1,502
    • Nas 3,160
    • NYSE 8,840
    • RUT 905

    Since we're actually up a bit since I posted them, it's going to take even more of a pullback to hit those levels and put us into any kind of worry.  As StJ pointed out the new Big Chart – the Russell is already at the 15% line at 920 and the S&P is right on our 1,520 line (Coincidence?  Of course not) and 14,000 is the 2.5% line on the Dow on the button and that means we have bullish goals of 3,225 on the Nasdaq (now 3,196) and 9,000 on the NYSE (now 8,955) BEFORE we fail 1,520 and 920.  

    As that's not likely to happen – we do need to remain a bit cautious ahead of a possible pullback – especially with the Dollar over 80.50 again (now 80.615) and oil poised for a possible drop (now $97.50 and lined up for yet another short on /CL!).  

    BBRY joining BKS in the graveyard of AAPL competitors.  It's deja vu from the IPod days all over again.   Aside from SNE walkmen and MSFT Zune, there was Creative's whatever it was called and dozens of other MP3 players and they copied the wheel and the screen and the menus and the buttons and they were cheaper and bigger and faster….  Now, there is only IPod.  It did take a long time – I think Zune was 2007 and that was 5 years after the IPod started and they were still trying to take it down.  

    BlackBerry (BBRY-6.1% after former chairman/co-CEO Jim Balsillie discloses he has completely liquidated his stake in the company. The stake was valued at $385M last March, when Balsillieresigned from BlackBerry's board after having already been removed from his other positions. Strategy disagreements reportedly played a role in his departure. Shares are now down 23% on the week. (13G) (yesterday)

    Of course it took AAPL over a decade from the release of the first IBook to become the leading notebook maker – also with a more expensive model that had "less" features than other competitors.  It's funny really – it's as if Porsche puts out a new car and people automatically assume it sucks – despite their very long, successful history of putting out great cars that people love.  Some companies are just good – all the time – like HNZ selling the same old, boring food – year after year after year and making more and more money until Warren Buffett decides they are still too cheap at 16x earnings and offers them 20x.  

    AAPL is trading at just 8x earnings – not including the 3x earnings of cash on their books.  

    Have I mentioned how much I like AAPL lately?  Yesterday's trade idea is still doable:

    AAPL Next week $470s are $6 and we can sell the Friday $465s for $4.25, which is what the next week $475s are going for so I'm thinking it would be fun to see how this works out.  Let's do 5 in the $25KPA as an excercize in Premium Decay.  

  11. StJean –  It may be bad journalism, but we live in a sensationalist environment.  All people need is a headline and they believe it's true, or at least that's what sticks in their heads 6mo out.  Ask people in 6mo what they remember about Tesla, and they'll say, it's nice, but it can't drive long distances in the winter. 
    As to altering habits, that's almost impossible for Americans.  I believe it will only happen once we have self driving cars, and we don't focus on it any longer.  Google is so close to this, it's amazing.  Once you can get in you're car and do something worthwile with you're time, then we can all drive 55, in car trains, and save tons in gas/fuel.

  12. NSPH taking it across the chin.

  13. Jfawcett / ABX
    What about selling the Jul 27P's for 0.48 as well to lower you're cost basis?  

  14. AAPL/Phil – i like the excercise. what is our 'plan' if APPL spikes up today/tomorrow? how do we plan our stops and or rolls?

  15. NSPH….that's ridiculouos.  Buying shares in here.  We were out of them, but their technology is sound, and they just need a bit of help to get things going.  1/4 buy in.

  16. Let's do the Aug 2.5 calls on them for a covered stock.  1.40 cost basis.

  17. AAPL Skew
    Take a look at the crazy skew chart of AAPL, especially the OTM Calls in the front month.

  18. FB coming back to us now! Also, good deal with FFIV – we made money selling the long calls in the excitement and we are now making money with the short calls with the excitement behind us. Winning on both sides – who could ask for a better plan.

  19. CTL – Finally getting to a reasonable valuation? Let's see how low it can go.

  20. CaFords- I follow CTL too. We should haver shorted it last night ,but I did not expect a dividend cut though their debt is a little high- now BB+.

  21. I'm leaving a little early today to head for the airport.  Business as usual from Vegas tomorrow and LA next week.  

    Thanks Yodi.  

    TSLA/StJ – Clearly the guy had an agenda.  This is the problem with all these papers cutting back on staff and filling their pages with stringers – the quality/integrity of reporting goes straight to hell.  

    TSLA/Burr – They are only trying to sell about 200,000 through the end of this decade – US auto sales are about 55M – as noted in article I linked to yesterday – stop criticizing the car for not being something it doesn't need to be.   My friend has a Morgan and they only sell a few thousand of those each year.  They have no roof – do you think Morgan owners would care if some idiot test-drives a Morgan and gets rained on?  That's not what the car is for.   An electric sedan is for driving around town – not long-distance trips.  I looked up "Used Tesla" and only found one person selling a model S – he wants $129,500 for it!  The sport models are generally going for $60-90K.  Doesn't seem like any unhappy owners are looking to get rid of them to me. 

    Grandfather/StJ – My grandfather told me that when he was a little boy in London (1905ish), they used to see cars rarely enough that they would follow them to see where they were going.   It was like seeing a magic carpet to them – he always thought it was cool that he actually owned one – even 90 years later…

    PCLN/Jabob – Getting close to earnings (26th) so very volatile.  

    AAPL/$25KP, Scott – Our "plan," if AAPL rockets higher, would be to lose $1.25!  This is a trade that "should" work statistically.  It could work wonderfully (shorts expire worthless and AAPL blasts higher next week) or it could just make a Dollar but it's very unlikely to lose much so it's being played on the basis of having a long-shot reward that is about 10x more than the risk.  

    Skew/Burr – Show me a chart from two weeks ago that pegged $465 and I'll be impressed.  Of course the "max pain" point pegs the right spot into earnings – it's self-fulfilling as people concentrate their bets around the strike as time runs out.  

  22. Debt is a bit high but cash flow is steady. Costs are coming down and revenue is stable. I was waiting for valuation to come in as I would not touch this at $40. Now it gets interesting.

  23. THLD – rolling Febs to Mar for 20c credit.

  24. Phil / AAPL Skew
    The chart isn't showing max pain, it's showing the IV of the next two expirations, Feb 16 and 22, the dates for you're AAPL trade.  It's showing that you are selling the front month, which has more IV than the back month, which you are buying.  This is good.  It's also showing a very steep smile, meaning the IV on the OTM calls and puts is still really pumped up.  Good for the trade.
    The Skew chart of GOOG looks very normalized in comparison.

  25. This doesn't look really good:

    Eurozone GDP

  26. Burrben/LiveVol – Do you have a subscription? If so, what's your opinion of the functionality vs. the price of using the software. Thanks.

  27. GLW over 12.80 now and BTU getting a big lift

  28. Skew/Burr – Ah, well that's why the trade jumped out at me.  Seemed like they were paying too much for 2 days vs what we could buy 9 days for.  If you can use that chart to screen for opportunities – that would be useful.  

    GLW, BTU/Jomp – Someone is buying up our list…

    Barrick Gold (ABX +4.4%) shares spike on rumors the company has been approached by many different buyers about its assets. Shares already were higher after Q4 adjusted earnings came in at a better-than-expected $1.11/share.

    Oil just broke back below $97.50 with Dollar testing 80.50 from above.  Hopefully Dollar bounces first.  

    Nat gas was not a big enough draw to cheer up oil bulls:

    EIA Natural Gas Inventory:  -157bcf. Futures -0.92% to $3.27 

  29. NSPH not going, moved too fast up.  So, I am changing my order to 1.45 for the cover, and also buying an additional ~1/2 of the cover (so 200 shares extra per 500 shares on the cover).  This way we have a little up side as well as some cover.  The spread sheet reflects this.  Should fill for 1.45ish.

  30. Phil/AAPL 
    We may want to remind people doing the AAPL trade that even though the risk is limited it isn't a "set and forget" trade. One could end up short a lot of AAPL if the near calls expire ITM!

  31. AYI/Phil,
    The puts of my current position expired in Jan and my covers will also get called away (stock at 63 cost, short Aug 70C at 5.4) – what are your thoughts on doing a new buy/write for 2015?  TIA!

  32. Phil – It does have the ability to screen, I'll see what I can find.
    Opes – I just got the demo last night, but I used to work with the guys who developed it.  I'll let you know my feedback mid-next week.  Very similar to the tools that I used working for a HF.
    AAPL Trade – I'm paper trading it, but remember it's American exercise, so selling that ITM call could leave you short some AAPL stock if you get assigned.  Just my 2c.

  33. Phil/ABX  Income trade – still thinking about buying back those Jan 14 40 Calls.  They were about here ($1.20) when I mentioned a couple days ago (of course they dipped to $1 yest but I couldn't quite do it.)

  34. Pharm, can you share a link to your suggested trades?

  35. Phil- you like shorting oil at 97.5 but what about /rb here? Up 4 cents Bc!?!?!?

  36. Burrben/Skew chart,
    Interesting chart – what is the software / data service provider?

  37. Burr / AAPL Trade  – if the short call gets exercised, won't the long call cover it (so you don't need to shell out $$, although there's a loss)? 

  38. Burrben/Skew chart,
    I just saw that's it's called Live Vol.  Looking forward to your assessment of this service!

  39. AAPL/$25KP, Jet – Very good point. They must be dealt with tomorrow, no matter what.  

    AYI/Wappler – So you are in for about $57 (less the short put profit) and you are short the Aug $70 callers, now $6.  There is no 2015 so I'm not sure what the question is.  You are right on the money so far and the only real decision here is whether or not you like them enough to sell the $65 puts, now $3.20.  I'd see if they can take out $72.50 first, otherwise, you are better off selling into a pullback and stopping out the stock below $70 so your calls expire worthless and you get the stock re-put to you at net $61.80 if it keeps going down.  Otherwise, back over $70, you can just re-buy the stock and you are no worse off.   Also, they don't pay a dividend (well not much) and you could offer $13 for the Aug $60 calls and kill the stock if that fills and sell the $60 puts for $2+ and then you get $60(ish) off the table and you're left with the $60/70 spread and the stock is put back to you at net $60 on the downside with another $10 profit to the upside if they hold $70.  

    Screen/Burr – That would be cool.  Kind of like what StJ does with the earnings moves – we can look for exceptional opportunities once in a while.  

    ABX/Rexx – Well, I thought you should do it last week and I still do.  

    /RB/Jrom – I like shorting them here ($3.08) for sure but make sure the Dollar is holding 80.50 and tight stops over the line, of course.  

  40. IV Skew/Burr, Opes – TOS offeres something similar i think. Charts > Product Depth. Type in AAPL, set "View" to Calls, select "Series" for the ones you wish to show, select number of "Strikes" to show to size chart to your view.  At bottom of screen, set the "Upper" to Open Int. and "Lower" to Volume, or thoretic price or whatever you like..  fyi, it's an active graph..

  41. Scott/TOS – Yes, those are nice to get a quick look at skew for individual names, but I believe that LiveVol takes it a step further and allows for scanning a universe of stocks to find I.V. instabilities. I remember that they had a "group rate" at one time for their subscription service – might be something to look into in the future.

  42. IV Skew – oops, meant set "Upper" to Impl Vol.

  43. FTR – anyone have a clue why it's down so much – sympathy with CenturyLink which cut its dividend? Cannot seem to find any news

  44. AAPL Skew / Burrben – TOS has something similar in the Product Depth chart that you can see under the options prices. It's updated in real time so for a stock like AAPL it moves a lot. 

    Also, OptionsOracle ( has a lot of free tools to explore options strategies and they are all free.

  45. guys
    i'm going with Phils decay AAPL play – interesting
    heads up – i just filled the Feb22 calls for $9.11 !!

  46. CTL is off 19% on div. cut 

  47. From Gann360

  48. Citigroup downgraded FTR and lowered PT to $3.50

  49. Sorry Scott, was writing my post in between tasks… Duplicated your information!

  50. Phil,
    do you see a play in the wfm pullback?

  51. From that Gann chart, the end is about March 8 +/-, the next Bradley turn is March 1 – which fits nicely.

  52. I guess they are going for 3.10 today…. F&CKING A$$CLOWNS. 

  53. FAS Money – The 6 short Feb $142s are $10 in the money and $10.50 ($6,300).  Our goal is to roll them to 8 of the short March $149 calls at $8.10 ($6,480) for a small credit.  This must be done by tomorrow and, if we get lucky on a pullback – we will just sell LESS March calls – whatever it takes to get an even roll.  If you want to cut the margin down, you can buy 5 2015 FAS $155 calls at $33.50 ($16,750) and knock out most of the margin and they should hold value pretty well, maybe dropping $3 for each $10 FAS loses.  I'd rather not though – I don't even want to pull the trigger on new XLFs until XLF breaks over $18 but then we'll HAVE to cover.  Meanwhile, the proper thing to do is SELL PREMIUM.  

    AAPL Money – Yawn.  

    $25KPM – What a recovery!  

    • QQQ – Let's remember to do our job and sell 10 next week $68 calls for .42 ($420).
    • USO – Our goal is to get 1/2 off the table back at $1.02 (even on 2x). 
    • IBM – Say on target
    • CRUS – We're accidentally long (leftovers from earnings spread) but it's looking good.  
    • SCO – Adjusted now with SCO at $36 with oil at $97.50 so we don't expect the short Feb calls to cost us money (but a .20 stop, just to be safe) and we'll need to see $95 in oil for the longs to work out.  
    • GMCR – I'm always comfortable being short on them.  Not worried Buffett will buy them at all.  
    • TZA – Oh dear – we forgot about them.  Should have killed them already.  I think we were hoping to do better than yesterday's .20 and now we got nothin.  Since TZA is at $10.36 and was $10.75 on Monday with the RUT at 911 (down 11, 1%) we're almost definitely not going to get it tomorrow so May as well spend .10 to roll them to next week $10.50 calls (.17) and use the naked TZA calls for weekend protection (although we're no longer bullish and have nothing to protect).  
    • TLT – Also bearish.  Wow, look how casually we flipped bearish on this portfolio, without even trying.  That means we BUYBUYBUY next week if nothing bad happens over the weekend.  

    $25KPA – This thing would be a double without AAPL!  

    • AAPL – Yawn.  
    • AAPL (spread) – Must roll or buy back $465s by tomorrow close, of course.  Keep in mind we're long on AAPL so if we "lose" a bit to the upside on this spread – it will not make us sad.   AAPL now at $468.58 and tomorrow $465s are $5.40 and next week $470s are $6.60 so $1.20 at the moment but still $1.80 of premium on the $465s.  Overall, I'm still expecting a bit of a sell-off, of course. 
    • SHLD – The rising 50 dma is at $44 so looking very good here.  
    • USO – As above.
    • SQQQ – Seems OK with SQQQ only at $35.32 at the moment.  
    • GOOG – April still a ways away so we can give it another week or so. 
    • IBM – Stay on target. 
    • FFIV – See, we didn't panic and now back under our short calls. 
    • CRUS – As above
    • VMW – They got worse but no big deal so far. 
    • SCO – As above
    • FB – We'll have to roll tomorrow but also leftovers
    • GMCR – As above
    • EXPE – Rock-steady around $65 with rising dmas so looking good and we don't want them climbing TOO fast anyway.
    • AKAM – Leftovers
    • TZA – As above, rolling.
    • TLT – Waiting 

    Overall, another strong day fending off the bears so I'm worried that we need to be more bullish in both $25KPs next week if all stays well over the weekend.  

  54. To answer that question, look at the chart above, courtesy of Société Générale’s Albert Edwards, who asks the question “Are equities really ?unambiguously cheap??“. (Cyclical Earnings charts after the jump).

    Shiller’s CAPE chart shows that while US equities are fairly reasonably priced, they are not, to use Edwards term, “?unambiguously cheap?.” But for about a week in March of 2009, they were, but if you blinked you may have missed it.

    Europe, on the other hand, appears to be appreciably cheaper than US equities. (Funny how recessions tend to do that). We have about a 16% European weighting, primarily through ETFs like GAL and DVYE.

    Regardless, contrarians may wish to take note of this from a valuation perspective.

  55. Phil – What do you think of CTL here?  They did cut their dividend but they are doing a $2Billion share repurchase.

  56. rperi / FTR – thanks did not see that downgrade

  57. jro // lol
    burr // aapl    i sold those ITM calls for $9.10 – so if they get called at $465 – no problem. would be interested in your take on the thought behind this – this would would have never entered my mind. i like the play because we get the decay off a long holiday weekend. I hope phil walks us through the logic, as on paper it's basically a bear call spread.
    jet // assign – i take it you're not in the states, thanks for the heads up 

  58. Phil/GOOG – Are we waiting till tomorrow to roll out the short 745 calls to next week's options?

  59. bai2r  / AAPL
    I was more talking about the mechanics.  If you were short the ITM call tonight, and the OCC spins it's random assignment wheel, you could come in tomorrow short AAPL stock, long the call.  Depending on you're broker this might be fine, it might not be, depending on how they calc margin.  
    I called IB and in my port margin account, it wouldn't have any margin impact.  So no big deal.  But just something to know if you are going to sell ITM options that are American style and hold over night.  

  60. anybody find anything on why P just popped ?

  61. LiveVol allows lots of scanning, and compared to the TOS graphical presentation of Vol, it's in another league.  Literally there are over 50 market makers who use the product on the CBOE, PHLX floor.  So it's more geared towards a professional environment.  I'm not giving up TOS or IB, each has it's own benefits.  Again, I'll know more in a few weeks, and maybe I can get a good deal for us.  LiveVol will execute and clear through IB, unless you are trading over 500 contracts/month.
    They do have a good blog where they highlight opportunities and have a Vol Sheet.

  62. Phil,
    Any interest in WFM Jan 2015 55P for about $3.00…Thanks

  63. The Euro drops like a stone, dollar strengthens against Euro and Yen, and both oil and ABX take off.  What am I missing?

  64. StJ // TWO
    Mate, can you help me find the TWO trade that was on the site – I can't seem to find it anywhere. There's something about this that doesn't make sense //

  65. phil,
    i have a dvn 45-55 jan15 bcs.
    sold the half the feb 57.5 for 1.20 now 3.20…
    your thoughts on the best roll ……….tks

  66. Pharm:  The collateral damage from that European Youth Unemployment chart is that the best and the brightest are heading for the U.S. in search of better prospects, which effects may persist for a generation.

  67. ABX buyout offer is what I missed.  Oil, who knows.

  68. Wombat / AAPL
    I think you are doing the wrong trade.  You should be selling tomorrow's 465, and buying next week's 470's.  
    The max price today of the 465's was 7.40, so I doubt you are selling the correct option.

  69. FTR/Samz – Yes, I think it's CTL based and C also downgraded them.  

    WFM/Rms – I don't like them this expensive – they are just a grocery store when all is said and done.  I wouldn't bet against them because rich folks like us will always shop there and not look at the prices but they don't have the growth potential people think they do.  

    Cheap/Pharm – While that's a good guideline, if I can, in any kind of market, buy a stock with a p/e of 15 and knock 20% off it and give myself an entry at 12 – why wouldn't I?  We don't need the whole market to be cheap – just the stuff we want to buy…

    CTL/JMM – I like companies that cut their dividends (after the fact) but they're not likely to come screaming back so I'd wait until next week at least before poking around. I had no interest in them at $42 and, now that they are $32, they are a bit more interesting but nothing I consider pressing.  

    GOOG/Opes – Yes, just in case they pull back.  

    P/Wombat – They spoke at the GS conference (the one Cook spoke at) so maybe convinced a few people to buy.  

    WFM/Jasu – See above. 

    ABX/ZZ – See above.  Rumors they are now so cheap people want to buy them or their assets.  

    DVN/Mill – Well, you do a half sale so you can do a 2x roll, right?  You have a long time and $10 coming on the long spread so you can just roll the $57.50s ($3.55) to 1.5x the March $60s ($2.60) for a good start.  Still well-protected and you shove the callers into about 2/3 premium on the roll.  

    Oil just took a nice plunge back to just over $97, now back to $97.25. 

    Gold in big trouble at $1,634.


  70. AAPL 465/470 trade--so far the other side of that trade was better.

  71. TWO
    TWO/Burr – Nothing wrong with that report. Looks like you can buy the stock for $12.12 and sell the Jan $12s for at least .50 and the Jan $12 puts for $1.50 and that nets you down to $10.12/11.06 with the company just affirming the $2.20 dividend.

  72. WFR going parabolic on us

  73. TWO / Wombat – I see that Burrben got you covered but for next time you can use the Wiki at:

    Select your stock symbol in the list (or enter a new one) and search back as many days as you want.

    For example for TWO:

    Works well.

  74. Burr // AAPL and TWO
    AAPL – you are bacon-saver my man – thank you !!! I took a look at the spread sheet again. Feb4 meaning ?? Thats where I screwed up  - thanks again.
    Feb4 13 Call AAPL 470 5 2/13 $6.00
    Feb 13 Call AAPL 465 -5 2/13 $4.25
    TWO – I entered this back on 2/4, and I'm showing it's at $12.60 currently. Could have sworn I took this from the income port, but can't find it. My Q is we have covered calls that are WAY ITM ( even from the original trade ), wanted to check if I screwed up the original trade because the covered call strike is 12 and  the premium was only .42, so I would be called away for a loss.

    Thanks again Burr // you 'da man.

  75. rperi -WFR.  Had a great trade in that one, but left a lot of $ $ $  on the table !

  76. phil………tks……

  77. Phil /WFR,
    I have a large position in WFR where I own the stock for a basis of $4.13  and I have sold Jan 14 $3 Puts for $0.78 now $0.31.  I also sold Jan 14 $5 Calls for $0.52 now $1.22. Would you make any adjustments at this point?  I obviously made more than 50% on the puts with 11 months to go. Roll up to the Jan 14 $5? Or just sell the $3 and look for a pullback to reenter the puts? I am inclined to do the latter but wanted to see what you think.

  78. Wombat/Feb4
    …means 4th week of February.
    As I am sure you are aware…there does NOT seem to be a standard way across all platforms to show weeklies…
    Wiki Tool/stjeanluc
    THANK YOU!!!  I had no idea…will use it often…beats a manual search!

  79. StJ //  Wiki
    Thanks much. I took a look at the history and Phil explained the 'unusual' call scenario. On paper it looks bad, but the reality is a bit different. 
    First time on the Wiki – will this be replacing the Google Spreads or just for archiving ? I must have gleaned TWO from a trade that never made it onto the portfolio.
    Burr // Sorry for the bother – thanks for the clarification 

  80. That's been a good stock to me.  Own 1,000 shares at net $3.76, plus 20 Jan 14 $3/4 bull call spreads after buying back and reselling the caller for profit 3 times when it was bobbing back and forth in October and November.  Covered it with the Jan 14 $4.50 calls recently for $1.17, so I'll miss this one when it's gone, but very, very profitable for a low priced, low margin stock.

  81. Ladoo // 4
    Thanks man. God, I learn something new every day.

  82. WFR that is, sorry.

  83. Well done.

  84. WFR/Rperi – I'm going to miss them. 

    TWO/Wombat – Wouldn't it be easier to just lay out the trade you do have and we can see if there's a good way to improve it rather than having a whole discussion just to try to track the original idea down?  

    You're welcome Mill. 

    WFR/Button – Well, they are only $5 now and $1.22 is more than 20%, which acts both as cover or profit down the road so no reason to change that.  At the moment, the 2014 $5s can be rolled to the 2015 $7s for not too much so really no reason to worry about those.  That means, the only question is with the puts and that then goes back to how badly do you want the stock.  As it stands, you make a very nice profit called away at $5 (bird in the hand) so do you really want to spend money to add more risk to the trade to just make a bit more – IF all goes well?  The Jan $3 puts are now .31  and you can, if you want to be aggressive, roll them to the 2015 $4 puts, now $1.10 for + .80 as you have very little to lose (.20) if you get your price but, other than that, you're just adding risk for no reason.  

  85. RIG, SLB, & HAL strong today.

  86. WFR / Phil,
    Thanks Phil.

  87. Phil
    Do you think we can squeeze another dollar out of TLT?  If we rally next week, won't it be difficult for TLT to break much higher?

  88. Phil / RIG; Settled their lawsuit today, so big surprises probably cleared off the board. Sold Mar 16 $62.5 puts, sold Mar 16 $57.5 puts, bought Mar 16 $55 calls, net credit on execution $101 p/ contract.  Critique, at your leisure.

  89. Looks like it will be a tough road back for BBRY – even the former CEO gave up already. Never a good sign:

    IDC Android surged to 69 percent smartphone share in 2012, took a dip in Q4

    But Android is eating their lunch… And Nokia's lunch as well!

  90. Phil // TWO
    Sure, I'll do that tomorrow – I am on 2 year old duty for the next few hours.

  91. Seriously, wtf is with gas!?!? So random- besides screwing consumers before long holiday weekend.

  92. Virtual short strangle portfolio – Now that it's Thursday afternoon and the RUT and SPX expiration is Friday AM, i.e. we need to review the Feb positions and roll if needed within the next 1.5 hours.  We have 10 short RUT Feb 930 calls, which is currently $0.25.  It's roughly 0.7% OTM and within the danger zone as who knows what would happen overnight.  So Buy to Close 10 RUT Feb 930 calls for $0.25.  Then we also sell 10 RUT March 960 calls for $1.15.
    We also have 5 SPX Feb 1540 short calls, which is $0.05.  It's 1.2% OTM, also in the danger zone.  Let's buy them back as it's free of commission on TOS.  Let's also sell 5 SPX Mar 1570 calls for $1.475.  We'll wait to sell the puts later for both SPX and RUT.

  93. Strangles / Peter – I would say we need to wait for a pullback to sell the puts but the way this market is behaving, we could wait for months! 

    Of course, now that I said that we'll correct next week!

  94. You're welcome Button.  

    TLT/$25KP, DC – Our original plan was seeing $19 or even $20 but we did get badly burned for .72 on the first set so making back .45 in a day is nothing to sneeze at.  Had we doubled down – I'd take it and run but, since we're still in 10 and our premise may have been delayed and not blown and since we now have a month to go – I think we can hold on for now. 

    RIG/ZZ – I like them long-term but not as much as I did below $40, when it was being given away.  If they have trouble at $60 I would get off the calls until you see where they're really trading.  The settlement is likely baked in – not news.  LONG-term, I like them anyway. 

    BBRY/StJ – Same market share as Symbian is not good (and ROFL MSFT with 2.5%).  Don't forget that when you properly ask the question – how many iOS DEVICES are out there vs Android – suddenly it's even-Steven at the top and the others dwindle away to nothing.   Over time, that's what the developers care about – no point in knocking yourself out to come out with versions of games, etc. for 2.5% of the population.  Or, as Steve Ballmer put it:

  95. Gas/Jrom – Usual holiday weekend nonsense.   Great short for next week as this is not a driving weekend.  

  96. Smartphones / Phil – In the end, it will be an Android/iOS world with Android still having a larger market share due to the number of cheap devices out there.

    In defense of MSFT, it's a new game for them and growing at 98% YoY beats BBRY and NOK!

  97. PeterD / Weekly SPX Strangles
    What do you think about starting to sell SPX Strangles 15-20 days out to take advantage of more time decay? (and make the portfolio a bit more lively?)
    I was looking at the Mar1 weeklies with 17days to trade.
    Maybe short the SPX 1440P for 0.97 , short the SPX 1555C for 0.30.
    Delta is around 0.04-0.05 for both options. ProbITM is about 5%.
    There is also the SPXPM options to experiment with.

  98. stjeanluc, yup, I hear you!  Many shorts got squeezed as the market marches on.  One of the reasons that I'm not selling puts today is that /DX is up 0.38, plus the 50MA and 200MA is a long way down.  Hopefully, it's not too late to sell tomorrow or next week.

  99.  You'll be amused to know that "as Steve Ballmer put it" came across with a "plug in crashed" notice and a cartoon sad face.  I couldn't have said it better!!

  100. Hi Burrben,
    Yes, the Weeklys can be sold, but my experience with them is not so successful as the volume is lower, plus they can swing very fast.  Since they are closer to the money and there is less time to expiration, the 2X rolls are usually very margin intensive.  I found that the weeklys are great for swing trading, but for time decays, I still prefer the monthly.  I remembered one time that I entered over 20 orders for various Weekly strikes an only 1 was filled after 2 days.  Most of the Weeklys actions are around ATM strikes.  When we get further OTM or 2-3 weeks out, we don't get much fills.  With that said, barfinger on this board is the expert on selling the weeklys.
    The other factor is that I'm not on the computer all day to watch (good example this week that I was out for 3 days), so the Monthly works well for people like me.

  101. Anyone else having problems with Seeking Alpha today?

  102. Peter – RUT March  Given your pricing, you intend to sell March 14 rather than March 21 calls?

  103. Pharm – No cheering for RIG ? 
     Are you out ?

  104. revtodd – Howdy!  The monthly is March 15 (3rd Friday of March), so the pricing was for the monthly calls.  I don't usually open up the Weeklys Options Chain, so the quotes should be correct at the posted time for the Monthly.

  105. OK, now I have to go.  Later all! 

    Once again, the market refuses to lose.  Volume still light but we shook off a bad day in Europe and bad data.  SOX is actually up 1% but VIX is down to 12.69, even as TLT ticks up a bit.  

    LOL ZZ – How appropriate.   Just a YouTube insert too, shouldn't give you trouble. 

    1:03 PM The Treasury sells $16B in 30-year bonds at 3.18%, the second straight month with over-3% yield. Bid-to-cover ratio of 2.74, vs. a recent average of 2.63; indirect bidders take 36.4%, vs. a recent 35.3%. Direct bidders take 14.5%, vs. a recent 15.7%.

    3:00 PM On the hour: Dow +0.01%. 10-yr +0.37%. Euro -0.77% vs. dollar. Crude +0.35% to $97.34. Gold -0.57% to $1635.75.

    A strong January forced short-sellers to cover their bets in several prominent ETFs, with both SPY and IWM seeing an 11% reduction in the percentage of their float shorted. The MSCI EAFE Index Fund (EFA) – with heavy exposure to Europe – saw a 24% reduction in shorts. Seeing an increase in activity is the SPDR Retail ETF (XRT) – 259% of the fund's float is now being shorted.

    Fidelity Reports Highest-Ever Average 401(K) Balance (Fidelity)

    "I could see a very quick and violent – and tradable – upward move in rates," says Jim Grant, who is currently short the iShares IG Corporate Bond ETF (LQD). Not having an idea of when this might happen, Grant says there's plenty of "poetic signs and portents" that it will happen. 

    In a presentation titled "U.S. Monetary Policy: Easier Than You Think It Is," the St. Louis Fed's Jim Bullard says the FOMC just sits around all day yelling "Buy" at the traders on the open markets desk before hitting Capital Hill happy hours by 4:30. That's a joke. His presentation argues monetary policy today is "considerably easier" than in 2012 … $85B/month in asset purchases will do that.

    More from St. Louis Fed's Jim Bullard: He suggests a tapering of the Fed's QE as soon as possible – perhaps trimming bond purchases by $15B/month for every 0.1% drop in the UE rate. Just when we thought the Fed couldn't think of new methods of micromanagement of this vast economy. (presentation) (speech summary)

    The G-20 draft communique pledges to refrain from competitive devaluation and says the group is committed to cutting global imbalances and avoiding foreign-exchange rate misalignment. The yen (FXY +0.3%) remains stronger on the session, the euro (FXE-0.8%) significantly weaker.

    Root causes of currency wars (VOX)

    There's no great rotation out of Treasurys today, with the long bond adding to gains – the yield off 5 bps to 3.19% – after the 30-year auction results. The 10-year is down 2 bps to 2.02%. TLT +1%TBT-2.1%.

    Moody's cites the "trajectory" of the government debt situation as determining any changes to the U.S. credit rating. Unless the economy is about to return to high growth, this means tighter fiscal policy, though Moody's warns not to cut spending too quickly either.

    Bodes well for next week's housing data:  Already at an 11-year low, housing inventory fell another 5.6% M/M in January and 16.5% from a year ago, according to Housing demand is clearly up, but also cutting inventory – foreclosures are down. A separate report from RealtyTrac had new ones falling 11% in January to 28% below a year ago. XHB +10%YTD.

    Notoriously poor market-timers, the central banks purchased 534.6 tons of gold in 2012, according to the World Gold Council. It's the largest amount the banks – last seen unloading their gold at less than $500/oz. – have bought since 1964.

    Slowing gold demand may be about to get a catalyst to reignite, with the World Gold Council predicting China will launch a physically-backed gold ETF this year. A dream of goldbugs for years, the new product's launch has been paved by recent regulatory changes in the country, says the WGC. 

    A new Pricewaterhouse Coopers report finds countries in the Middle East could see their current account balances deteriorate by 4%-7% of GDP by 2035 due to the global shale oil boom. But the outlook for OPEC may be rosier than many believe, as political, economic, logistical and geological stumbling blocks are on its side and could hamper shale development in the U.S. and elsewhere.

    What BP really thinks of Russia: It’s corrupt, inefficient and dominated by Putin’s security friends, according to internal documents. Despite its acrimonious exit from TNK-BP, the company is staying in the country, as it is keeping its oil products operations there and plans to hike its stake in Rosneft to 19.8%. So BP's public upbeat pronouncements hardly match its blunt private views.

    As reported by Jackie Davis last April (chip off the old block!):  U.S. Shale Gas Revolution Hits Asia (The Diplomat)

    Even on a very good day for solar stocks (TAN +3.9%), the huge gains posted by SunPower (SPWR +23.3%) are eye-opening. No news has hit the wires to explain the move, but with 16.9% of the float shorted as of Jan. 31, short-covering could be playing a big role. Solar stocks had already rallied strongly on Monday and Tuesdaythanks to growing optimism about an industry bottom. LDK +8.7%.DQ +12.6%FSLR +7.6%JASO +5.8%ENPH +14.3%WFR +5%.GTAT +5%.

    Coal stocks (KOL +1.9%) have become much like solar stocks, each reacting to news about a competitor as it would react if the news was just about itself, Paul Ausick opines; there's money to be made only on volatility, not for the long term. But for today, gains are nearly across the board: ANR +14%JRCC +7.3%WLT +4.7%,BTU +4.4%ACI +3.7%RNO +3.2%CNX +1.9%.

    Lower costs and a better than expected cost outlook helped Alpha Natural Resources (ANR +16%beat forecasts, and CRT Capital looks for more of that recovery in 2014-15, ensuring the cost structure and balance sheet flexibility "to make it through" until coal markets recover. But ANR says the coal market will remain uninspiring until coal inventories drop or gas prices blow through $4.

    Nuclear Energy Institute President Marvin Fertel says the Department of Energy is close to closing a loan guarantee deal with Southern Co. (SO -0.6%) that would back two new nuclear power reactors under construction in Georgia. Fertel says he isn't involved directly in the talks, but his understanding is SO believes the issues holding up the loan guarantee aren't "insurmountable." 

    A federal judge in New Orleans approves Transocean's (RIG +2.8%) $400M criminal settlement with the Justice Department over the 2010 Gulf of Mexico spill, accepting a guilty plea to one criminal misdemeanor violation of the Clean Water Act for failing to properly monitor the well at the time of the blowout.

    Agricultural commodities continue an underreported slide, with J.C. Parets noting corn is down for the 10th consecutive session. Earlier this week, the USDA estimated farm income in 2013 will be the highest in 40 years thanks to high prices. A weak harvest has little impact thanks to the use of crop-insurance programs. DBA -5.2%,CORN -4.4% YTD.

    Though Goldman Sachs thinks the long-term story on Whole Foods (WFM -9.7%) is still in play even after the company lowered its estimates for sales growth, the bullish rhetoric is wearing thin on some analysts. SW Retail Advisors' Stacey Widlitz notes that investors don't want to hear about more value deals as a way to drive sales with WFM's P-E ratio still floating around at elevated levels.

    Constellation Brands (STZ +35.5%) etches out an all-time high as the prospect of distributing Modelo products in the U.S. creates quite a buzz for investors. CEO Rob Sands added to the frenzy with an enthusiastic appearance on CNBC in which he indicated that the new A-B deal should fly with regulators.

    Shares of Best Buy (BBY +5.6%) have fully recovered from yesterday's late dive attributed to a case of nervous feet by Richard Schulze over his bid to buy the company. The volatile trading in BBY is partially related to confusion over what the impact would be if Schulze goes along with a P-E backed plan to take a non-controlling minority position in the retailer.

  106. 3D Systems (
    DDD -5.8%) spikes lower after Citron Research declares it a "bubble stock" in a new report (.pdf). The short-seller compares the current hype surrounding 3D printing to the, real estate, and alternative energy bubbles, criticizes 3D'slow R&D spending and aggressive M&A strategy (so have some SA writers), and accuses management of providing a torrent of misleading promotional rhetoric. Also lower: SSYS -6.3%XONE-2.1%PRLB -7.7%.

    Heavily-shorted Aruba Networks (ARUN +6.9%) jumps following an upgrade to Overweight from Morgan Stanley. A reseller survey indicates stronger growth expectations for Aruba than was the case 3 months ago, and momentum is strong for the company'sInstant Wi-Fi access points/controllers and ClearPass management software, with the latter getting a lift from the BYOD trend. Yesterday, archrival Cisco reported 27% Y/Y growth for FQ2 Wireless division sales, though that's a slowdown from FQ1' 38%. Aruba's FQ3 report arrives on Feb. 21. (previous)

    Online ad services provider ValueClick (VCLK +17.6%) has skyrocketed to multi-year highs after beating Q4 estimates. Management noted on the earnings call its affiliate marketing unit posted 10% Y/Y growth, its highest rate for 2012, and that Europe was "less of a drag" than in recent quarters, thanks in part to a restructuring. Q1 guidance is for revenue of $165M-$168M and EPS of $0.39-$0.41 vs. a consensus of $165.3M and $0.39. Goldmanlaunched coverage with a Buy last week.

    Up strongly over the last 3 months, Cisco (CSCO -1.5%) is off modestly after beating FQ2 estimates, issuing in-line guidance, and offering mixed commentary about product sales and demand trends. Nomura (Buy) thinks there's upside to gross margin guidance, and is encouraged by Cisco's aggressive software-defined networking product launches. The firm also notes commentary on EMEA was "more constructive than in prior quarters," even if regional orders fell 6% Y/Y. However, China (orders -4%) is expected to remain challenging for a few quarters. (transcript)

    CenturyLink (CTL -20.1%) crashes after getting hit with 6 downgrades in response to its Q4 misslight guidance, and dividend cut, and is taking other high-yield rural telcos down with it. FTR -5%.WIN -7.5%CNSL -2%. Citi, which is cutting CTL to Neutral and FTR to Sell, argues CTL's dividend cut shows the need for telcos to maintain balance sheet flexibility during a time of slow growth, strong competition, and eroding wireline voice revenue. The firm notes CTL's guidance now implies 2015 free cash flow of $3.60-$4/share, well below Citi's prior estimates. (transcript)

    Though H-P's (HPQ -0.2%) 2012 legal victory over Oracleextended the shelf life of Intel's (INTC -0.2%) Itanium high-end server CPU line, recent moves from the chip giant show it still wants to gradually de-emphasize "Itanic" in favor of its Xeon CPUs. Intel's next Itanium platform, codenamed Kittson, will rely on an older 32nm manufacturing process, and a plan to make Kittson parts socket-compatible with Xeon has been shelved. H-P, by far Itanium's biggest supporter, reported a 25% Y/Y drop in high-end server sales for FQ4. (Project Odyssey)

    BlackBerry (BBRY +5.7%) has erased the morning losses it saw on news ex-chairman/co-CEO Jim Balsillie is no longer a shareholder, and then some. "Who cares?," National Bank's Kris Thompson (previous) responded when asked about the sale. A lot of investors seem to feel the same way.

    Three lunchtime reads:

    1) Why you should own bonds

    2) China: What I'll be watching in 2013

    3) 10 big worries about this market

  107. Phil – When is Jackie Davis coming back to work? We miss her! :-)

  108. Thanks Peter – that makes sense now.  I got in on the $RUT before the close.

  109. The 10 big worries article Phil posted below will take some of the bull out of you.

  110. 10 big worries article?

  111. got it…. sorry

  112. I don't know…nothing in the "10 Worries" is new news. Rising geopolitical risks (when are there NOT rising geopolotical risks!?) Upcoming elections? Budget fight? I think Phil's bullish arguments make way more sense and the housing market is clearly getting better which has implications througout the economy.

  113. Burrben / ABX – Selling Puts… Thanks I will consider.  I have the BCS in my cash account and 300 shares in my IRA (selling calls against).  Nice day today so time to act on Phils suggestion for the roll since I am taking off work tomorrow.

  114. AYI/Phil,
    Apologies for asking about the non-existing 2015 options, but I guess it just goes to show how much I have adopted your planting trees mantra!  I like your idea of replacing stock with a call spread and a put, thanks for the suggestion.  Let's see if somebody bites on the call, the spreads are fairly wide and can take a while to fill.

  115. MYGN anyone? About to test its 200D MA….waiting and watching for a bounce

  116. So here is a interesting analysis on STZ.
    Here are the skew charts from the past two days.  As you'll see, the skew in the puts really did blow up.  Meaning if you were long puts before, you were well paid in IV terms, if not delta terms.  But maybe there is a trade here.

  117. Is there a consensus on the board with regard using backratio spreads to hedge?  I do not recall anyone discussing this in the near term. I was looking at buying a June backratio (-1/+3) call spread using the 13's and 19's.  The spread was priced at 1.20 and just a 10 point spike by April in the VIX pays us very well without too much decay.  I used TOS thinkback over the past year to look at past scenarios buying these spreads 4 months out and it is very cheap to do this now.  Any thoughts, especially since sequestration could induce some fear over the next month?

  118. Better late than never…

    There is no quitting in the Russell 2000!

  119. I'm having major computer issues.  

    Something was wrong with my laptop and I'm using Maddie's and doesn't seem to have enough memory to run TOS.  Plus it has the amazingly annoying new Windows with a touch pad and touch screen so every time I move the mouse it opens those idiotic tiles.   

  120. Phil possible lost his laptop in a poker game and now he comes up with all sort of excuses!!!(8

  121. possible just witching Fryday???

  122. Sorry you're having "issues" Phil.  My computer is fine, it's the messy hairball my cat puked up in my office this morning that has me distracted.
    Witching Friday indeed…… :)