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March 27th, 2014 at 11:06 am
TSLA/Shadow – That stock is just speculation piled on top of speculation wrapped up in promises – could implode in a very spectacular fashion.
UPL/Albo – Not bad but I do like CHK better.
$101.50/Bruce – No biggie.
Thanks Burr, this was our long premise on /NG at $4.30, inventories much lower than usual. The danger is that massive supply is on-line and, IN THEORY, they will restock very quickly and we'll be at surplus in record time (maybe July). It's going to be an interesting spring for /NG:
You're welcome Jersey.
Fed/Craigs – I'm not going to speculate on them changing their mind. Especially not based on any single report. At the moment, I'd assume they continue to taper through the end of the year and, if that doesn't cause a disaster, then they will, in mid 2015, begin to raise rates. Why people are freaking out about that, one way or the other, is beyond me but Janet doesn't strike me as the fickle type.
Nat gas/Burr – Nat gas doesn't affect /CL except that NYMEX trader's primary job is to keep oil prices as high as possible and, between the oil inventory on Weds, which showed poor demand, they were able to hold out hope that the Nat Gas inventories on Thurs would show strong demand, so they kept bidding oil up into the report, hoping for an excuse to spike it higher and dump out without too much of a loss on their fake orders. Once we get a mediocre nat gas report, they need to unwind a bit of their BS trading of the last 24 hours and the contracts sell off. Even though it's their job to jack up prices, like any job, they have performance targets and the oil companies and Banksters that back them want them to lose as little as possible while screwing over the American people.
And here comes the Dollar, that should be nice for the oil shorts!
SCO/Griffin – You paid net $1.15 for the spread and you can salvage .75 of it – that's the main thing. There's nothing wrong with the short puts at $28.60 on SCO as the April $29 puts are really worth .40 if they expire here, not $1.15 and May $28 puts are $1.20 but probably you'll be able to roll to the $27s (now .75), which would be oil $105. So, rather than doubling down and paying .75 more for calls that expire in 22 days and are .40 out of the money, why not spend $1 to roll down $1 more in the money and buy another 30 days with the May $28 calls ($1.75). Those have a .59 delta vs the .40 delta you have now, so not much worse if SCO goes lower but they only have $1.15 of their value in premium vs all $1.50 of premium if you DD and they have half as much Theta decay and, if SCO goes the wrong way, you lose .80 per $1 on your 2x position vs .59 on the 1x longer play. All in all, a much better use of your money.