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Philstockworld Top Trade Review

Image result for top trade ideasYes, this is Monday morning's Report.

I don't have much to say about the markets, they are back near the highs and we'll see if they hold tomorrow, not today, as it's Monday and Monday's don't matter.  What we do need to do is bargain-hunt in case it is a real rally and the best way to do that is to look back on past trade ideas and see if we can find some that haven't gone up yet.  

We haven't done a Top Trade Review since the end of Sept so it's a good time to do one of those and, as our Members well know, the vast majority of those trades turn positive so, when they're not, it's usually just a matter of time.  As of the September review, we had looked at Top Trades that were initiated in the first half of the year and, out of 27 trade ideas in 26 weeks, we had 21 winners and 6 losers but 2 of the winners turned around by Sept and that left is with 28 wins and 3 losses for a wonderful 90.3% winning percentatge.

Let's start by taking a look at our two losers and see how they are doing:

Tesla (TSLA) had jumped to $390 in Sept and though it was back to $340 by the 30th, we were worried about the 3 short Oct $300 calls we had sold for $30 were $43.50 so we rolled them ($13,050) to 4 short Jan $340 calls at $31.20 ($12,480) for net $570 less than the $9,000 we collected and THOSE short calls expired at $10.02 ($4,080) so we ended up with a net profit of $4,350 on that "loser" trade.  

Chesapeake Energy (CHK) is still a big loser and we still have the adjusted position (30 2020 $4 puts at $1.25 (now $1.56) and 20 short 2020 $2.50/5.50 bull call spreads at $1.25, now 0.85) so we are still down on them and I would now double down on the 2020 $250 calls at $1.35 and wait for a bounce to sell 20 more $5.50s for $1 (now 0.40)

IMax (IMAX) is running out of time to recover as we flipped our 10 short Dec $29 puts to 20 short March $24 puts for a net $1,500 credit (0.75/contract) and we added 20 March $22/26 bull call spreads for $1.65 ($3,300) and those are failing too with IMAX languishing around $21.  

The March $24 puts are now $3.30 but, fortunately, so are the 2020 $20 puts so we'll roll to those and give ourselves more time to recover at a 20% lower strike with our break-even now $19.25.  The March $22 calls are down to 0.10 so a loss of $2,800 there but we still like IMAX though I'd retreat to a long-term play and pick up 25 of the 2020 $18 ($6.20)/22 ($4.20) bull call spreads at $2 for $5,000 more so now we're in this trade for net $2,800 (the loss on the bull spread) - $1,500 (the remaining credit from the short puts) – $5,000 (new money) = $6,300 and we get $10,000 back if IMAX can make it to $22 for "only" a $3,700 profit potential on this broken trade.  

So, one of the 3 losers turned around and two are still works in progress.  This is how our system works because we deploy very little initial cash and, if the position works out right away, we make huge returns on our cash but, if it doesn't, we make more of a commitment with more cash – but only AFTER the stock we like has gone on sale.  It's OK to put $6,300 to work to make $3,700 as that's 58.7% in 21 months – that's a reasonable rate of return and now all we need it IMAX $22, not $26.  

Now, on to the 2nd Top Trades, starting in July:

Monday, July 10th:  IMax (IMAX) - Uh oh, that can't be a good start!  Actually though, that one did work as it was short-term and IMAX was around $25 at December expiration:

Sell 10 Dec $21 puts for $1.85 ($1,850)

Buy 10 Dec $20 calls for $2.90 ($2,900) 

Sell 10 Dec $24 calls for $1.20 ($1,200)

That's a net $150 credit on a $4,000 spread and all IMAX has to do is stay over $20.58 and you break even and holding $21 makes you $1,150 and things get better from there! 

This one worked out and returned the full $4,000 for a $4,150 total profit (2,766%) so you see what I mean about getting a very nice profit if it happens to go your way….

Friday, July 14th: Macy's (M) – I'm very happy we stuck with this one when they were down as they've really turned it back around since.  Our trade idea was:

In the LTP, we only have 10 short M 2019 $28 puts we sold for $5.60 back in Jan and they are now $8.83 so let's:

  • Roll 10 short 2019 $28 puts ($8.83) to 15 short $23 puts ($7,500).
  • Buy 40 2019 $23 calls for $3.20 ($12,800) 
  • Sell 40 2019 $28 calls for $1.75 ($7,000)

That's net $5,800 on the new spread less $5,600 we originally collected on the puts plus $1,330 we spent on the roll is net net $1,530 on $20,000 worth of Macy's spreads!  If M gets back to $28 in two years, we make $18,470 (1,200%) and, if not, we are THRILLED to roll to a lower 2021 strike and sell more puts.  

Even if that doesn't work and we roll it out again to 2023 and we end up in for $5,000 and THEN we hit it – it's still a nice 300% return over 6 years!  As long as they don't go BK, this is a great play.

Clearly, they did not go BK (yet) and now the Jan $23 puts are $4.30 ($6,450) and the spread is now in the money and net $2.75 ($11,000) for net $4,550, up $3,020 (197%) and that's only "on track" for our full 1,200% expected gain so this $4,550 spread is right on track to return $20,000 – that's still great for a new trade, even if you missed our first 197% returns!  

Friday, July 21st:  IBM (IBM) -   We always like to play them when they get lower and IBM was a Long-Term Portfolio play we added as a new trade as they tested the lows:

As a new trade, the 10 2019 $130/150 bull call spreads at 11.30 ($11,300) with 5 short 2019 $130 puts at $10 ($5,000) is net $6,300 with a potential $13,700 (217%) upside potential at $150.  That's a very nice trade for a blue-chip.

They've recovered slightly and now the short Jan $130 puts are $3.70 ($1,850) and the Jan $130/150 bull call spread is $15.30 ($15,300) for net $13,450 and that's up $7,150 (113%) in just 8 months and well on it's way to another $6,550 gain from here if they simply hold $150 into January, so even our leftovers are good for another 91.6% in 9 more months!  

 See?  You don't have to go for spectacular returns to make spectacular amounts of money.  IBM dipped to about $145 and all we did was promise to buy 500 shares at $130 and some nervous IBM shareholder paid us $10 ($5,000) per share for that guarantee on our part and then we made an $11.30 bet ($11,300) that IBM would be higher than $150 in January, which would pay us back $20 ($20,000).  So our net cash outlay was $6,300 and, if all goes well, we get $20,000 back – just because IBM went up $5 in 18 months! 

If you can make that kind of money with solid, conservitive bets – why gamble?

Monday, July 24th: Chipolte Mexican Grill (CMG) – "What a ride we had on this one and it's not over yet as we're still below where we started at $340.  

In the STP, we have 5 short Dec $370 puts at $29.50 ($14,750), now $47 ($23,500) and we can roll those along to 7 of the 2019 $300 puts at $33 ($23,100) for $400 out of pocket and we're about net $20 on the 7 short $300 puts for $280 entries, worst case.  In the LTP, we'll open 10 2019 $320 ($68.50)/$420 ($28.50) bull call spreads for $40 ($40,000).

That was a good roll as CMG took a nasty dip in December.  As it stands now, the Jan $300 puts are now $25 ($17,500) and the Jan $320/420 bull call spread is $30.70 ($30,700) for net $13,200, which is down $3,700 (21.8%) from our $16,900 entry.  As a new trade, the break-even at $16.90 is $336.90 but I'd go more conservative and take the 2020 $250 ($105)/$350 ($51) bull call spread for $54 ($54,000) against 5 of the $2020 $300 puts at $37 ($18,500) as that's net $35,500 with a $64,500 (181%) upside potential at just $350 in 21 months.  As I said – play conservative!  

Wed, July 26th: Ford (F) – Ouch, another one that started well but gave up the gains.  Still, we played this very conservative so I'll be curious to see if it's a loss or not.

  • Buy 500 F for $11.03 ($5,515) 
  • Sell 5 F 2019 $10 calls for $1.63 ($815) 
  • Sell 5 F 2019 $10 puts for $1.02 ($510) 

That's net $8.38/9.19 ($4,190) and we're obligated to buy 500 more at $10 ($5,000).  The dividend is 0.60 ($300/yr) and, if we get called away at $10, that's another $1.62 ($810) profit so a nice 20%+ return on a stock you can pass on to your grandchildren.

We sold the $10 calls when the stock was at $11.03 so we're just playing for those dividends and being conservative did pay off as the stock has dropped to $10.73 ($5,365) but the calls are now $1.35 ($675) and the puts are 0.72 ($360) as they both suffer from time decay so net $4,330 is a small gain BUT we collected an 0.15 dividend on Oct 20th ($75) and an 0.28 dividend on Jan 29th ($140) so net net $4,545 is a pretty healthy net $355 gain (8.5%) in the first 9 months and still on track for the full 20%.  It's good to learn how to make these trades as they can fund your retirement!  

Friday, July 28th: L Brands (LB) – This became our Trade of the Year as they fell lower but, unfortunately, in July, they were at $45 and, in March, they are $42.26 so it looks like we're going to finish July with a loser?  

I'd sell 5 2019 $40 puts ($6 = $3,000) and buy 10 $40 ($9.40)/$50 ($4.80) bull call spreads @ $4.60 ($4,600) for net $1,600 on 10 ($1.60/long contract) and then at $50 you get $10,000 for an $8,400 (525%) profit.  

Worst case is you own 500 shares of LB for net $41.60 – still a 10% discount to the current price for a company making $3/share (p/e 15).  In fact, that's good enough to put in the OOP because who doesn't like to make 525% in 18 months?  

The short time-frame helps and the short $40 puts are now $5.40 ($2,700) but the $40/50 spread is just $3.90 ($3,900) for net $1,200 and we're down $400 (33%) but of course I still like this as a new trade.

That was an inauspicious way to wrap up July but we did have 3 winners against our two losers (60%) in the holiday-shortened month.  The net profit worked out to a lovely $6,425 – not our best work but not terrible either and nothing wrong with either of the two losing trades and plenty more to gain from all of them.

Well, it's time to go to work, I'll try to get to August later in the week but for now, it looks like the markets are going to have a very interesting week!  


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  1. Since about 5am — /ym /es and /nq trending down but /tf is going other direction.

    Anyone see a reason?

  2. I guess we breakout from the triangle thingy on the upside! Maybe….

  3. Meanwhile, back in DC, Trump might now meet with Lil' Kim without any pre-conditions! North Korean leaders have been wanting that for 30 years and so far, no one had been a taker because it gives credibility to the Kim family. If Obama had done that, he would have been branded weak or a traitor by the GOP. But for Trump, it's a diplomacy coup! We live in a bizarro world, 

  4. Making China great:

  5. Good Morning… ABX raised to outperform by RBC Capital Markets.  

  6. FU JO!!!!!!!

  7. Interesting video on Solar Panels.  My friends and I are engineering an intelligent camera system with a perpetual power system that can deployed anywhere on or off grid.  Main purpose is for a visual based safety solutions and surveillance.


  8. NFLX

    Netflix drops following cautious mention from Citron Research  (325.84 -5.60)
    "@CitronResearch: Stranger Things happening at $NFLX. With mkt cap up $17 BIL in a week and short interest. at 10 year low. Citron thinks the stock can be shorted back to $300.

  9. Good morning! 

    Reason/Jeff – Not sure reason is required in these markets.  Europe opens an hour later at the moment (DST) so they started selling our pop but now our traders have the ball and they are propping things back up.  

    2,800 on /ES is the key level.  If we take that out and then 2,800 on SPX – forget being bearish for the duration.

    Big Chart – Still need to confirm with NYSE over the 50 dma at 12,972, now 12,951.  Dow was blasted over their 50 dma this morning and the Nasdaq looks like it's strapped to a Falcon 9…

    Kim/StJ – I have always advocated discussion.  He wants to be taken seriously so take him seriously – what does it hurt?  Not taking him seriously has let a rogue regime fester for 30 years – who does that help?  

    We set up the UN after 2 wars in which we finally realized it was better to talk than not talk but then that wasn't exclusive enough so the "top" countries made a G8 that REALLY decides things and then we decided we didn't like Russia and made a G7 and then Russia decided to screw with our elections.  

    We're still just monkeys who never learn…

    Image result for donald trump putin monkey

    Solar/StJ – It is AMAZING to me how hard the Republicans have been working (since Solyndra) to destroy America's ability to provide solar energy, which is clearly what will power the world in the future.  How much can they be getting paid to sell our country down the river and place us decades behind the rest of the World?  

    Worst/StJ – Is that list saying that only 10 stocks in the S&P were below break-even since 3/9/09?  Talk about shooting fish in a barrel.  

    So how do we pick the next 25 1,500%+ performers?  Not much of a theme to the 25 they have there.  

    ABX/Learner – What???  That never happens!  

    /KC with another great Monday entry opportunity below $120.

    Cadmium/Fel – Very promising stuff but yes, Tellurium is a big problem.  FSLR uses it and constantly have trouble with supply since Tellurium is a very, very small byproduct of copper mining and there's no way to influence the copper mining so the supply remains limited – no matter how much they are willing to pay for the Tellurium.  

    The best panels on the market at the moment are not CdTe but non-toxic, non-rare silicon from Panasonic and SPWR.  Using Tellurium in solar panels is like using gold in stereo wiring – sure it improves performance, but it's too expensive to be a practical solution.  FSRL is catching up but, really, what's the point?

    NFLX/Albo – Was holding my breath on that one!  

  10. UCTT/Phil- was Friday UCTT trade official for LTP text as bold in blue so I was just wondering

  11. UCTT/Dave – My bad, should have been bolded:

    PSA/Yodi – You like those storage trades, don't you?  I like them in general but only making $7.50/share so I'd rather wait for a better pullback.  UCTT is a nice, boring company that's a great value.  I like that for the LTP:

    • Sell 10 UCTT 2020 $20 puts for $5.75 ($5,750) 
    • Buy 20 UCTT 2020 $15 calls for $9.50 ($19,000)
    • Sell 20 UCTT 2020 $22.50 calls for $6.50 ($13,000) 

    That's a grand total of $250 out of pocket on the $15,000 spread that's almost entirely in the money.  Good for a $14,750 (5,900%) gain on cash if it manages to go up $1.42 in 2 years and TOS says the margin is just $1,898 – so a very efficient way to make $15K in two years!  

    Good call Yodi.

  12. CMG/Phil- glad to see a new trade idea for CMG… not going to miss the train this time :)

  13. good luck filling that uctt trade…

    maybe it is only me, but I can't take these virtual portfolios seriously when the trades are almost impossible to fill.

    yes, if you get those prices it will look good. but how can you say a trade is up X% when the likelihood of getting those prices is almost zero?

    Phil-- I am sorry to complain about this again but I can't imagine that I am the only PSW member that finds these trades frustrating? 

  14. Jabo- I almost never get those filled at the dream prices but I guess one can play with 5% off the prices and if not just leave it dont force a trade up

  15. GGP went from 50 to 0.50 in the 4/2007 – 2/2009. Keep that in mind.

  16. Trends For New Home Sale Prices At The Beginning Of 2018

  17. China shrinks steel industry slowly, drawing Western ire

  18. Littler late, but I am also seeing much different pricing on UCTT.

  19. Jabobeast  It sometimes takes 3,4 5 weeks to capture some of Phils suggestions.  It takes patience and working the prices individually.

  20. Phil

     Do you think we should have a trade on?

    Deutsche Bank DB


  21. HOG offers a 3.3% Div. Relatively down possible to Trumps capriccios with Europe as Europe is thinking of putting import tax on motor cycle imports. A stupid kid game the clown is playing. So it might be your decision of enter a) a buy stock sell put and calls more like my armchair trade or even b) set up a Leap BCS. Even combined with a 47.5 April cherry call at .77 it does not look to bad. Just a question does the ASS carries on with his macho ideas or does someone will talk some sense in to him.

  22. Jabob/UCTT

    The trade was a suggestion.  The return was 5900% on cash!  Surely, if you like the trade, you can find a way to make, say, 4900%!  My point is there is a way to make a successful trade if you like the underlying.  Whether you leg in to the trade which Phil suggested Friday, or simply create another trade.  I am not sure it is absolutely necessary to match what Phil wrote in this particular trade.  

    Sometimes, if I like a trade, I will do like you do and just wait.  If it doesn't work in my favor I don't worry about it and move on.

  23. Phil- seems like the market is weak at open with Dow and SPX in red.. looking to short any indexes? was thinking to poke 25000 and 7000 levels on the Futures or should I watch Monday out first?

  24. Qmc I did trade DB but would not tough it any more!!!

  25. Yodi

    Thanks DB

  26. Gateway Tunnel, we hardly knew ye | Sheneman cartoon

  27. guys— my point is why suggest a trade that is impossible to fill at those prices unless it goes up, then goes down, then goes up, and you happen to fill the legs all at the right prices because your crystal ball told you how to piece into each leg?

    the 5900% or 4900% returns are great but NOT realistic when you can't get into a call spread at those prices or sell a put at those prices unless the stock drops. 

    Again, I may be wrong and there could be members filling at these great prices… but I have not heard anyone say that they have. It is always--maybe you can work it in over a period of 4-5 weeks IF the underlying HAPPENS to go your way.

  28. NLY a bid advance since my last comments but still good to trade buy stock and sell Jan20 10/10 p/c or more conservative 10/12 p/c both good money! Phil would take the 10/10!!!!

  29. UCTT/Jabo- I understand what your saying because I too never get those perfect prices for example I've just got filled the UCTT puts @ $5.5 which is 4+% off Phil's price… I'll take that and I working on my Call spread now and tbh I am already slowly making some money as time expires my puts so the most is I don't get a good call spread and I'll just buy back my puts at small profits or maybe just let it continue to lose value. IF the puts work against me = the stock is down so then my call spread should naturally be filled at the price Phil recommended. (Hope this helps)

  30. Phil, GLW looking kind of interesting after their earnings miss. 

  31. I'm not hedged enough.

    Added some LABD (3X biotech short ETF).

    Leveraged way to play exposure to volatile group.

  32. CMG/Dave – Don't overdo it.  A lot of the improvement is based on the HOPE the new CEO can turn them back around.  Not yet proven.

    Trades/Jabob – I never put a trade into a tracking portfolio unless it fills but it doesn't always fill on day one.  For my own account and in the hedge fund, we understand that the concept of the trade is what's important so, for example, the UCTT 2020 $20 puts are now $5.42, down from $5.50 on Friday afternoon.  The bid/ask has narrowed as the stock popped on Friday but now it's coming back down and I wouldn't take a penny less than $5.50 but that certainly won't break the trade, to pay $500 instead of $250.

    The 2020 $15 calls, on the other hand, last traded at $10.24, blasting up from Friday's last trade at $9.75 but, fortunately, the 2020 $22.50 calls are now $6.84 – so those balance out.  

    So, you could have filled this trade this morning (and that's still not being patient) for $1,380 but, at the moment, it's a no trade in the portfolio as nothing has filled since I ask $6 for the puts, offer $9.50 for the calls and ask $6.75 for the short calls – once one of the legs fill (could be next week or next month) THEN I begin to work on the other legs.  

    And what Den said.  

    A big part of learning how to trade is learning how to be patient, not just waiting for a good price on stocks but then waiting for a good price on the options on those stocks.  That's why I prefer to begin accumulating just before the dead bottom, there's a better chance to fill the puts at a good price and buy the calls at a good price and then we wait for a turn to sell calls.  If we plan to be bullish on a stock, then there's no harm in going long to start, right?

    I think you miss the point of the site which is to LEARN to identify your own opportunities rather than chase into the trades which immediately become crowded after I pick them.  Yodi is happy because he learned how to make these trades by following the examples and now applies them to his own selections when he sees a nice set-up.  

    DB/QC – Lots of scandals with those guys and they haven't actually made any money for 3 years and last Q they lose a whopping $2.2Bn on $5.6Bn in revenues.  I guess you could say people will be so surprised if they actually make money that the stock will pop but they've never been a good bank – just a big one.

    HOG/Yodi – My worry on them is that someone will retaliate with tariffs on them, as they are an iconic American brand.  Also they have said the steel/alum tariff will hurt them.  You're not going to get me to bet money that Donald Trump will have sense talked into him.  Cohn just quit and that guy was top management at GS, the most cut-throat company on the planet so it's not like he doesn't have a thick skin and HE couldn't talk sense into Trump.  

    Indexes/Dave – Per earlier conversation, I already pressed my index shorts as they topped out this morning.  Very happy now.  

    March 11th, 2018 at 9:16 pm | (Unlocked) | Permalink

    I’m still half in and will do (DD in answer to Jeff) again if we’re higher, but a bit of a suicide mission at the moment.  Don’t forget, Europe and Asia are catching up to us from Friday and that’s pushing our futures. The real action will come when we open but, then again it’s going to be Monday.   


    As a new trade, I'd go /NQ below 7,150 – they have the farthest to fall if we really correct.  Very tight stops above though as the Nas can fly higher too.

    NLY/Yodi – That's true because I am just thrilled with 12% dividends.  

    GLW/Jet – I do like them but not in the high $20s (actually $30) as that's $25.7Bn in market cap so you are paying more than 2x sales and, even if they hit projections of $1.8Bn, that's still a forward p/e of 15, which isn't that cheap and it's a big stretch to get from -1.2Bn last Q on $2.6Bn in sales to +$500M for the next 4 Qs (there was no Q in 2017 over $400M in profit and a net loss for the year).  

  33. OMG!  Rumors Larry Kudlow may become Trump's Sr Economic Adviser.  

    Time to invest in bunkers!

  34. CMG/Phil- I have only sold the puts so far, I was thinking to wait it out with the puts and hopefully CMG comes down the low 300 before setting up a more conservative trade.
    Larry Kudlow- Well then the MT trade would look better as he predicts Europe to be exempted :D

  35. I do not think I am missing the point. 

    And I am not impatient-- well I am but not with filling orders.

    My complaint is when you say lets do this when it is impossible unless you leg in to the trade and it EVENTUALLY goes your way in order to fill.

    Saying I could have this trade this morning is WRONG, period.

    You couldn't get the call spread at $3 or the put sale at 5.75.

    So maybe you sometimes will get these wonderful prices over time but I still think it would be more helpful to everyone if you used real actionable prices instead of hopeful prices over time.

    I learn a lot from you and appreciate your hard work but when you throw out trades that are basically impossible to get close to those prices I find it unhelpful.

    If others disagree then please accept my apology for bringing it up.

    This trade is just one of the many that get posted that seem unlikely to get done without getting kind of lucky with the stock movement;

    Sell 10 UCTT 2020 $20 puts for $5.75 ($5,750) 

    Buy 20 UCTT 2020 $15 calls for $9.50 ($19,000)

    Sell 20 UCTT 2020 $22.50 calls for $6.50 ($13,000) 

    That's a grand total of $250 out of pocket on the $15,000 spread that's almost entirely in the money.  Good for a $14,750 (5,900%) gain on cash if it manages to go up $1.42 in 2 years and TOS says the margin is just $1,898 – so a very efficient way to make $15K in two years!

    • Japan's big political scandal just got worse.
    • The finance ministry has admitted to tampering with records to remove references to Shinzo Abe, his wife and finance minister Taro Aso that related to a questionable real estate deal which became public last year.
    • Abe has previously said he would resign if he or his wife were shown to be involved in heavily cutting the price of public land sold to a school operator in Osaka.
    Potential disaster below 120!  Demand for U.S. debt falls amid rising supply
    • Bid-to-cover for 10-year Treasury has fallen to the lowest since 2009, as debt fueled tax-cuts increase Treasury issuance to records.
    • Although demand has fallen to 2.46x total amount of bonds being auctioned,(from as high as 3x in 2013) it is still well above the 1x level, which marks a failed auction and has not been hit since 1983.
    • “Treasury supply is further exacerbating what should be a natural move away from the market as interest rates climb, says Thomas Simons – an economist at Jefferies. He adds, "This supply issue is going to cause a lot of pressure on the market.”
    • Other buyers – like banks who are designated primary dealers – have also reduced Treasury holdings since post financial crisis regulations have made it more expensive to hold government bonds on the balance sheet.

    NYC office market is overvalued – Green Street Advisors

    • Manhattan office cap rates are now below those of Los Angeles, implying office properties in the Big Apple are overvalued according to a new report by Green Street Advisors.
    • A slew of deregulation has increased new office supply in NYC vs. a discouragement of new office construction has lifted rents in LA.
    • The report's findings do not bode well for NYC focused office REITS like SL Green (SLG+0.1%), Vornado (VNO +0.8%), and Boston Properties (BXP +0.6%). For the West Coast focused Douglas Emmett (DEI +0.7%) however, the outlook looks rosier.

    A new bitcoin sentiment tracker from Reuters is coming

    • To help investors sift through the clutter, Thomson Reuters Corp will begin tracking and analyzing bitcoin chatter across the web.
    • As part of a new version of its MarketPsych Indices, Reuters and its partner MarketPsych Data will scan 400+ websites to pick market-moving threads and transform them into a tradeable index.
    • Online chatter has become a driver of all asset-classes lately, with Austin Burkett of Reuters saying, “News and social media are driving the investment and risk management process more than ever with the continuing rise of passive and quant-driven trading.”

    Outsized Netflix rally questioned by FT

    • An article by Financial Times' Dan McCrum asks when does Netflix (NFLX -1.3%) crash?
    • McCrum points out that Netflix relies on heavy borrowing to pay for its expenses. "The debt is rated junk, four notches below investment grade. Were credit markets to close, as they periodically do to weaker borrowers in moments of strife, Nextflix would be shut out, " he warns.
    • The piece caught the attention of short-selling firm Citron Research: "With mkt cap up $17 BIL in a week and short interest. at 10 year low. Citron thinks the stock can be shorted back to $300. Content spend unsustainable long term."
    • Shares of Netflix are up 76% over the last 90 days.

    Opening???  Ross Stores plans for 100 store openings in FY18

    • Ross Stores (NASDAQ:ROST) says it opened 23 Ross Dress for Less and six dd's Discounts stores across 14 different states in February and March.
    • The company says the new locations are part of its plans to add approximately 100 new stores in FY18.
    • "With these recent openings, we continued our growth in both new and existing markets. Our newest market for Ross Dress for Less is Nebraska, and for dd's Discounts, we entered Illinois with two new stores," notes Ross Chief Development Officer Jim Fassio
    • ROST +0.31% premarket to $77.25.
    • Source: Press Release

    Valeant launches $1.25B private debt offering

    • Valeant Pharmaceuticals (NYSE:VRXcommences a private offering of $1.25B aggregate principal amount of unsecured senior notes due 2026.
    • Net proceeds will help fund the repurchase of $1.25B of outstanding debt, including its 6.375% Senior Notes due 2020, 5.375% Senior Notes due 2020 and up to $100M of its 6.750% Senior Notes due 2021.

  36. UCTT/Jabob – It's a thinly traded stock.  Someone mentioned it and I liked the idea of a trade so I put up numbers I'd like to trade it at – it's very simple.  Earlier this year I put up a trade for SAN that people couldn't fill so we never put it in the portfolio – very simple solution.  If this proves too hard to fill, it won't end up in the portfolio either.  

    The point you don't get is that we DON'T WANT THE TRADE at "actionable" prices.  I pick prices I think should be fillable and people already jump the gun on those so there's NO F'ING WAY that, to make you happy, I will suggest worse prices and have people taking bad fills right and left.  You don't take "action" UNLESS you get a good price – I've been saying that for over a decade – much of which you've been here for.  If you can't get good prices on UCTT – DON'T BUY IT!

    For God's sake, we have 20-40 trade ideas every month -some won't fill.  Some do fill.  Many of the ones you do fill you could have gotten for considerably less money – hence the "FUs" that clearly indicate you could have gotten the spread much cheaper if you had waited.  So your solution to that is to pay MORE to open a trade rather than wait PATIENTLY?  No thanks…

    No individual spread is worth chasing vs the discipline of getting a good price on all your trades.  

    I can't know, in advance, whether something is going to fill.  Usually I stay away from thinly traded stocks but UCTT is a Billion Dollar company and simply hasn't garnered much option interest so far but sometimes our entry into a stock creates a better market for the options and hopefully that will happen with UCTT over time – but not 24 hours after I call the trade.  

  37. Here's the SAN trade we couldn't fill as they took off right after we picked them but maybe now they can fill:

    Submitted on 2018/01/08 at 12:08 pm

    In the OOP:

    • Sell 20 2019 $7 puts for $1.25 ($2,500) 
    • Buy 20 2019 $7 calls for 0.80 ($1,600) 

    That's a net $900 credit so our worst case is being assigned 2,000 shares of SAN at $7 less 0.45 per share is $6.55, about the current price and, if assigned, we could flip and sell the $7 calls for 0.80 and drop our net to $5.75 on a decent bank – so not much risk there.  

    In the LTP, we'll do the same trade but with 50 short puts and 50 calls.  

    So we didn't chase them, we killed the trade and there's plenty of action in the options.  The Jan $7 puts are now $1.22 and the Jan $7 calls are 0.80 so there, they filled!  Only 2 months later!  Sadly though, it was meant to be a short-term trade because SAN owns a lot of Ripple but the crypto fad ain't what it used to be so I'm not going to re-call it for our portfolios.  

    Point being though, it was "impossible" to fill in Jan but easy to fill in March.  If this were GE or LB or HBI or UTCC – our premise would be the same and we'd be happy to get in now that we're getting our prices but you can tell from the nature of the play (calls and short puts, no covers) that we were looking for the quick money on SAN.

  38. Jabo,

    UCTT I did set up this spread and Phil did make as well his comments. I am amazed that some of you guys like to follow these trade suggestion by the book. The once who make trade suggestions are suggestions you do not have to follow these by the book. Actually it is very very highly commended to ALWAYS do your own research. All trade prices normally given, are set up at the time one looks at the trade and are not casted in stone! You need to look at the trade and decide finally you happy what the market pays, and not what anyone on this board found at the time he or she looked at the trade.

    Finally I filled the trade BUT with 15/25 BCS and a 17.5 put sold, even sold 1/2 an April 18 22.5 cherry call. So as you can see even very much different than Phil suggested. Important I must be happy with my trade, not what someone else suggested.

  39. Again, that SAN trade is NOT official – it was an example of one from Jan that didn't fill.

  40. MT/Phil- I got filled my 2020 puts for $4.2 and 30 calls for $8. I was looking at the 36 calls and then I saw the 35 calls able to fill roughly at 5.1. Will you say that's a much better trade?

  41. A further comment I wish to make in respect to setting up a play.

    In case of a stock buy and the sale of a strangle or straddle, I set up the option play first, then buy the stock.

    Different to sell them single. By selling them single you might fill the one leg but the other will never get filled. However it is mostly much more difficult to fill the option play than buy a single stock. So option first than buy the stock.

    In case of BCS, it is a toss, as Phil says, at the lower range, buy the call and sell the put and wait for the upswing of the stock to sell the call.

    However so often the combined deal of the BCS does well. As what you lose on the swings you make up on the roundabouts.

    Generally it is my experience that the short caller has much greater swings than the long one.

    But not to worry these plays are one or better two years out, so there will be still many ups and downs.

  42. Jabo/ orders

    When I first started here, I took the trades as specific to what Phil said, but now I try and work them for a better price if I can get them,   or a little higher, if that is all I can get and it seems to be working, at least for me.

  43. MT/Dave – Well, we were hoping to sell the 2020 $37 calls for $5.20 but MT has pulled back since last week.  Even on Thursday, the $37s were still going for $5.20 so not sure what happened that you had to drop to the $35s and, even then, the last sale was $5.62 on those.  So no, not "much better" – how could it be when you sell a lower strike for less money?  

    Look at the trading on the 2020 $37 calls (you need to learn how to do this so you have better information):

    Our call was Tuesday morning and those calls went off at $5.40 to $6.10 that morning and $5.20 every day but today since.  

    The $30s were easy to fill at $8.60 or less and now way down at $7.90:

    And, since we went lower, the puts were an easy fill between $4.20 and $4.35 too:

    Given the movement for the week – I'd remain patient and look to get my fills on each leg before capitulating to a worse position.

    Good point Yodi and the wider variation in the short caller comes from the fact that he's paying more premium so he's as much affected by changing volatility calculations as he is by the actual price of the stock at any given moment.  

    Good job Lala, my goal is to teach you how to trade, not how to follow trades.  

    TSLA with a big pop today.   I could see they were doing a big PR push this weekend so this was expected.  Hopefully they make $360 so we can short them again!  

  44. I've been here a long time and learned early on to work the trade within the parameters of Phil's recommendation.  Some trades I've gotten at better prices and some not as good but, good enough to satisfy me. If it's not to your liking, don't make the trade!   I find that its the good ideas that are presented here that are so helpful.  But sitting here and complaining about not getting filled seems a little nit picky.  Yodi has a sh*t ton of great trades but I bet most of you don't do them.  We should all be as successful as he is.  I'm not trying to be critical, but there is usually a way to work the trade and I've always thought the essence of this site was to teach us to make our own trades.  

  45. MT/Phil- the 37 calls are $4.6 at mid with last filled at 4.81. the 345 calls are 5.45 and last filled 5.62. I assume it was a better trade with lesser Net VS potential gain or am I getting something wrong here?

  46. Any feeling that GNC might be a takeover target after they were bailed out financially by the pharmaceutical company?  I see they are expanding into India.

  47. MT/Dave – I'm not comparing $4.60 to $5.45, I'm saying the $5.20 for the $37s was a way better play.  If you just now are trying to do the trade from last Tuesday, since MT has fallen a bit, I'd sell the 10 $30 puts for $4.35 ($4,350) and buy the 20 $30 calls for $8 ($16,000) and sell 10 of the $37s for $4.80 ($4,800) and only if MT fails to hold $32 (which has not happened yet) would I capitulate and sell the other 10 short $35s, now $5.60 for probably $5.30+, since it has an 0.54 delta.  Nothing has happened to change the target so I'm not too inclined to give up $2 of upside for 0.80.

    If you want to be more conservative, you could sell 10 of the $35s for $5.60 ($5,600) and then, if MT fails $32, you sell 10 more and now you have $5.45 avg sale in a more conservative trade.  If MT goes higher, then you try to get $5 for the $37 calls and use the extra 0.80  to pay to roll the 10 short $35s up to the $37s too.  That way, you only accept the more expensive spread if the stock is already moving up (it would have to be about $33.50 to get that price and it topped out at $33.63 on last week's run).  

    GNC/Rperi – Harbin didn't GIVE them $300M, they bought stock and are now the largest shareholder and have a convertible/preferred note that essentially gives them the company (at $5.35) if GNC defaults.  GNC's entire market cap is just $345M at $4.20 so, if there's going to be a takeover, it already happened!  Harbin got a huge bargain with GNC since they spend $1.67Bn on Swisse Wellness in 2015, who are an Australian supplement maker.  So what's the play?  They bring the GNC store brand into Asia to push their vitamins and use GNC's US stores to push their vitamins and they will be very happy and GNC will gain a continent.  

    Nice margins!  

  48. GNC/ Good viewpoint.  Thanks!

  49. How The World’s Billionaires Got So Rich

  50. Crisis Converted: Visibility

  51. Who gave Donald Trump’s secret Vladimir Putin letter to Robert Mueller?

  52. MT/Phil- Yes, right if we are bullish why not wait for the $37 to be back at $5.2… somehow I missed something so obvious! 

  53. 2 packages left on porches in Austin exploded today.   People are dead. 

  54. What a house of cards this market is built on!  

    Amazon's increase in market cap since the start of 2017 is greater than the entire market cap of all but six S&P 500 companies.

    London's house prices are falling at the fastest pace since 2009

    Serious Trump Maximum craziness this weekend – doesn't even make the news cycle today:

    It felt more like a therapy session — with Trump venting and attacking his enemies — than a political rally. I went through the entire transcript and pulled out the most memorable lines. They're below.

    I'm still in love with Liz! 


    Electric vehicles seen kicking traditional cars to curb by 2040

  55. JUST IN: 2 deadly package explosions at Austin homes in the past 2 weeks are likely related, police say: “If you’ve received a package that has been left that you weren’t expecting, call 911.”

  56. Still pushing back up into the close but it's Monday, we'll see what tomorrow brings.  

    NYSE still way under at 12,905 but, of course, everyone else looks very strong.

  57. A little tick down into the close, S&P just about flat and Dow down 150 but Nas up 0.5% and /TF over 1,600 so still a rally.  

  58. Learner/ ABX – I am reviewing my current position ( '20 10 / 20 BCS) for 3.4 and roll it down to a 

    '20 BCS ( 10 / 17 ) for about 2.75 as I think their production levels off to down and all in costs stay flat to up.   You know this stock really well – what do you think of the price target?   the adjustment?

    Any thought on the adjustment?

    I thought a $20 Target was a stretch and still think a $17 target is a stretch. 



  59. Sorry above post should have gone to Phil

    Phil / ABX – I am reviewing my current position ( '20 10 / 20 BCS) for 3.4 and roll it down to a 

    '20 BCS ( 10 / 17 ) for about 2.75 as I think their production levels off to down and all in costs stay flat to up.   You know this stock really well – what do you think of the price target?   the adjustment?

    Any thought on the adjustment?

    I thought a $20 Target was a stretch and still think a $17 target is a stretch. 

  60. Phil,

    What are your thoughts on /CL with the recent announcement that Saudi IPO pushed back to 2019? My understanding was you thought that the pending IPO would push up prices due to Saudi manipulation. Has that changed now?

  61. Trump Blocks Broadcom’s Bid for Qualcomm

  62. Springtime for Sycophants

  63. Dropbox is staring at a downround IPO

  64. Good morning!  

    Indexes up a bit but nothing at all exciting going on.

    ABX/Batman – We're in the $10/20 spread with short $15 puts – just in case it really takes off.  It's all about the price of gold in 2 years – whether ABX extracts it for $775 or $825 is not the main point – unless gold is lower and not higher.

    Buy Barrick Gold, Sell Newmont Mining

    Walker writes that his bullish stance on Barrick comes from his belief that the stock is oversold: He argues that the company's cost guidance and declining production profile are already priced in to the shares, and the current valuation puts them at an attractive entry point.

    Toronto-based Barrick said it expects to produce between 4.5 million and 5 million ounces of gold this year, at a cost of between $765 and $815 an ounce on an all-in sustaining basis, the industry benchmark.

    That is down from 5.32 million ounces of gold in 2017, when costs were a comparable $750 per ounce. Barrick is one of the industry’s lowest cost producers.

    Further out, Barrick, which has mines in the Americas, Australia and Africa, expects to produce between 4.2 million and 4.6 million ounces of gold a year between 2019 and 2022 at costs of $750 to $875 per ounce.

    To help stem the slowdown in production, Barrick expects to increase its capital spend on project development by more than 60 percent in 2018, to as much as $550 million.

    In the fourth quarter, Barrick reported adjusted net earnings of $253 million, or 22 cents a share, largely unchanged from $255 million, or 22 cents a share, in the same period a year ago.

    So, basically, they are the same company now as they were last year when they were at $20/share and gold itself is $100 more per ounce than it was last year.  Q1 should be well above last year, when they made just under $900M against what is now a $14Bn market cap (for the Q, not the year).  

    Oil/Japar – I think the Saudis have, at great expense, been sustaining Brent above $65 and they are having trouble keeping a lid on production (for other OPEC members) and the US is killing them with their production increase and they can't sustain it long enough to make the IPO, so they are delaying the IPO.  If it weren't almost May, I'd bet oil would crash hard but, as it is, I just like the bet from $61.50 to $60 for now and then we'll see if that holds.  

  65. QCOM

    ~~QCOM -5%.    (Qualcomm acquisition by Broadcom (AVGO) blocked by President Trump.