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Fabulous Thursday – Testing our Strong Bounce Lines – Again

Here we are again

I don't even have to write anything new today, I'll just copy and paste what I said on September 15th, in: "Terrific Tuesday – S&P 3,420 Yet Again":

As we discussed last week (when we failed at 3,420), 3,420 is our Strong Bounce Line and the 20% Line so we knew we were likely to re-test it – the question is whether or not the S&P passes the test and we may find that out this morning as the Futures are pointing up yet another 1% – just like yesterday when we made most of our gains in the thinly-traded pre-market session.

Our 5% Rule™ told us 3,420 would be our Strong Bounce line on the way back up but it was much easier to call a short the first time we tested the line, as we did on the 9th in our Live Member Chat Room, because we had not consolidated for a move higher at the time.  Now the markets have had time to digest the bounces and we're above on all the indexes but the S&P 500 as back on the 9th it was:

Another chance to short at 3,420 on /ES with tight stops above.  Lined up with 28,200, 11,475 and 1,540.

That is NOT the case this morning with Dow 28,320, Nasdaq 11,532 and Russell way up at 1,617.  ONLY the S&P 500 hasn't confirmed the move over the strong bounce line so it's no longer wise to bet against that happening.  You have to take these moves in context – looking at a single chart doesn't tell you enough.  And we're making this move WITHOUT stimulus and WITH Donald Trump likely to be out of office in January – so this is a strong move so far.

The Russell's 1,600 line only just turned green yesterday and the NYSE is at 13,100 this morning but, if it goes green too on the Must Hold line, the other indexes are going to have a much easier time making another run back to the top of the range – a range the Nasdaq left behind 1,600 points ago – back in June.  So, as I said in yesterday's Webinar:  This is not a time to GUESS what will happen, this is a time to WATCH what happens and then we can make some intelligent adjustments to our portfolios.

We already think we are bearish enough with our hedges so we'll just have to see how things shake out back at our Strong Bounce Lines and it's Thursday – so we're not looking to do anything crazy into the weekend anyway.  

Stimulus talks are still up in the air with the Airline Industry hanging by a thread.  Yesterday, the Democrats tried to extend the previous aid to the airlines through March but Republicans blocked it – because then it wouldn't have been seen as coming from the President himself, so 38,000 more workers are furloughed through inaction.  

As we can see, the XAL Airline Index is about to run into serious resistance at it's own strong bounce line, which is also the rapidly declining 200-day moving average.  XAL feel from about $115 to $35 and that's 80 points so a weak bounce is 16 points (20% of the drop) and a strong bounce is 32 points so 51 and 67 would be the key lines to watch and you can see the consolidation happened at 51 (very violent) so now it's likely we'll test 67 and we're only at $58.22.

So, if you believe in Donald Trump, who said he wanted to help the airlines, this would be a no-brainer of a bet as the Strong Bounce line is over the 200 dma and the 5% Rule™ beats TA so the move over the 200-day moving average will be interpreted as bullish on the chart and we should get a nice kick higher once they work out some kind of stimulus for the airlines

 

JETS is the US Global Jets ETF and it's got LUV, DAL, UAL, AAL, ALGT, CJT, AC, ALK, JBLU and ATSG as it's top holdings.  As we discussed in the Webinar yesterday, we're about a year away from herd immunity, vaccine or no vaccine and the airline industry is vital to our national security and JETS includes cargo carriers, who are actually doing OK at the moment, with all the shipping we're doing.  

So that makes a 2023 spread on JETS kind of interesting with Trump promising to save the airlines and the Democrats trying to save the airlines.  Eventually, hopefully, SOMEONE will actually save the airlines.  For a trade in our Future is Now Portfolo, I'd go for:

  • Sell 10 JETS 2023 $15 puts for $4.40 ($4,400) 
  • Buy 15 JETS 2023 $15 calls for $6.50 ($9,750) 
  • Sell 15 JETS 2023 $25 calls for $3.65 ($5,475) 

That's a net $125 credit on the $15,000 spread so, if all goes well, it will make $15,125 (12,100%) if JETS is back over $25 in 2023.  Worst case is owning 1,000 shares at $15 (less the $125 credit) and we can always sell calls to lower that risk if we lose confidence but it's a nice, optimistic bet on things getting back to normal – one day.  Ordinary margin requirements on ETFs are pretty low, just $841 for this one so it's a very margin-efficient trade as well!  

In other news:

 


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  1. Good morning! 

    Speaking of the Future is Now Portfolio, it's been doing very nicely (up 67.4% for the year) but it is risky times so let's cash in our short puts, which are over 80% anyway (ALB too) and make room for more Futuristic trade ideas down the road.  

    Since we don't have hedges, cashing the short puts reduces our downside risk and we REALLY want to own our other positions, so we're not worried about those puts but let's see if they are worth keeping:

    • ARNC - This is an $8,000 spread and it's currently net $8,725 so we should really cash those out, right?

    • BYND – This is a $25,000 spread at net $21,985 so I guess there's no point in waiting 16 months for the last $3,015, is there?   

    • SPWR – We liked them so much we played them twice!  We have the $20,000 spread that's currently net $11,170 so that's good for a new play!   Then we have the older $28,000 spread that's currently net $13,640 and that's good for a double too if SPWR doesn't fall below $12 – so both of those are keepers.

    See how I snuck that in there?  We just killed the Future is Now Portfolio, other than SPWR, which my hands got sore from banging the table on early this year but at least we added JETS and we'll look for some more bargains as earnings season comes around again.   

    To reiterate, out new trade idea for this portfolio (from the Morning Report) is:

    Stimulus talks are still up in the air with the Airline Industry hanging by a thread.  Yesterday, the Democrats tried to extend the previous aid to the airlines through March but Republicans blocked it – because then it wouldn't have been seen as coming from the President himself, so 38,000 more workers are furloughed through inaction.  

    As we can see, the XAL Airline Index is about to run into serious resistance at it's own strong bounce line, which is also the rapidly declining 200-day moving average.  XAL feel from about $115 to $35 and that's 80 points so a weak bounce is 16 points (20% of the drop) and a strong bounce is 32 points so 51 and 67 would be the key lines to watch and you can see the consolidation happened at 51 (very violent) so now it's likely we'll test 67 and we're only at $58.22.

    So, if you believe in Donald Trump, who said he wanted to help the airlines, this would be a no-brainer of a bet as the Strong Bounce line is over the 200 dma and the 5% Rule™ beats TA so the move over the 200-day moving average will be interpreted as bullish on the chart and we should get a nice kick higher once they work out some kind of stimulus for the airlines

     

    JETS is the US Global Jets ETF and it's got LUV, DAL, UAL, AAL, ALGT, CJT, AC, ALK, JBLU and ATSG as it's top holdings.  As we discussed in the Webinar yesterday, we're about a year away from herd immunity, vaccine or no vaccine and the airline industry is vital to our national security and JETS includes cargo carriers, who are actually doing OK at the moment, with all the shipping we're doing.  

    So that makes a 2023 spread on JETS kind of interesting with Trump promising to save the airlines and the Democrats trying to save the airlines.  Eventually, hopefully, SOMEONE will actually save the airlines.  For a trade in our Future is Now Portfolo, I'd go for:

    • Sell 10 JETS 2023 $15 puts for $4.40 ($4,400) 
    • Buy 15 JETS 2023 $15 calls for $6.50 ($9,750) 
    • Sell 15 JETS 2023 $25 calls for $3.65 ($5,475) 

    That's a net $125 credit on the $15,000 spread so, if all goes well, it will make $15,125 (12,100%) if JETS is back over $25 in 2023.  Worst case is owning 1,000 shares at $15 (less the $125 credit) and we can always sell calls to lower that risk if we lose confidence but it's a nice, optimistic bet on things getting back to normal – one day.  Ordinary margin requirements on ETFs are pretty low, just $841 for this one so it's a very margin-efficient trade as well!  

     


  2. Marcell  AYX
    Once more I looked at your position.
    I would do the following, If you still have confidence in the stock aand do not want to close the position as I suggested.
    Once more the closing is:
    Sell the stock 500 x 145.20 gives you 72,600.00
    Sell 5 oct  160 opt. @ .78 gives you 390.00
    Sell 5 nov 160 call opt  @ 7.45 gives you 3,725.00
    Close 10 Jan22 150 call opt @ 35.50 cost you 35,500.00
    Close 10 Jan22 160 call opt @ 32.05 cost you 32,050.00
    The total credit is 76,715.00
    Total debit 67,550.00
    However if you still in love with the stock I would play as follows
    Buy 40 Jan 23  125/160 Verticals (BCS) @ 13.00 cost 52,000.00
    Sell 400 of your 500 shares @ 145.20 credit 58,080.00
    This puts still 6k in your pocket you still left with 100 share and the BCS will cover the 20 Jan22 callers.
    Keep an eye on them as the stock might go over 150 or 160 Jan 22.
    Leave the puts as is.
    Hope you come clear with this.


  3. Good morning


  4. good morning


  5. Phil/Jets, on the 10 puts and 15 bcs jets trade, would you sell up to 25 calls and puts to juice up the return? or just less than 10?


  6. Yodi, fantastic… thank you for your attention and patience. As I'm new here I need to understand the terms used and make quick calculations like yours.
    But I don't understand why you considered selling 500 shares as credit?
    The only credit I will have is if the quote is above U $ 145.64, which was the amount paid.
    So I don't understand why you considered it a gain/credit plus.
    In my calculation the 500 shares do not add anything to me, just return the capital.
    Where's the error in my reasoning and calculations?
    I understand that by selling the calls I will be losing approximately $ 30,000 right now.


  7. Good Morning.


  8. 44hrs of green candles in $ES, thats a long streak, might see a pullback.


  9. Phil/IBM Been waiting for a move in IBM to sell 8 more covered calls .. any suggestions?

    32  IBM '22 $120c ($16.52)

    -16 IBM Jan'21 $140c ($7.28)

    -8   IBM  '22 $140c ($11.44)

    -10 IBM '22 $100p  (9.98)

    THX


  10. Marcel, You welcome and we are all here to help each other. Only by questioning can you get smarter. I still learn every day as well.
    The sale of the stock for the Jan23 BCS ( vertical) is just an exchange you can not have the cake and eat it as well!. That you lose some money by getting not the money back for the stock, for the amount you paid for is clear. But in the given situation you cover the 20 Jan 22 naked callers at the moment only covered by 500 stock. You actually need 2000 stock to cover them.
    By having 40 Jan 23 BCS ( Bull Call Spreads) You cover your 20 Jan22 150 and 160 short calls.
    I have not studied the stock and do not know the same, That is why I said close the lot and just hope the short putters will not burn you. Selling puts is in todays situation a more risky thing. I have burned my fingers on the same many times, as the market drops they come to burn you. Margin will go up in leaps and bounces. I do not know your financial position, but take it easy on selling puts as well as calls.
    I have many positions but in small doses, but 20 options on one stock is a lot especially if it is not a home run. Tuesday we discussed the position on ABBV.
    My play could give you a return of 50% over the next 610 days, I did not even go to Jan 23.
    I bought the stock for 86.50 unfortunately before the clown had one of his steroids attacks, could have bought it after his attack for 85.60, however look where the stock is today again. At the same time I sold the jun 22 75 put for 9.95. One day later after the clowns reverse attack I sold the Nov.6 88 call for 2.10 now 2.50. So as you can see the stock went up by 1.45 as the short month call went against me by .40. However the Jun 22 sold put already shows a credit to my 9.95 now 9.75 so 20.00.
    Do not forget the stock pays as well a div. of 1.18 every 3 month. that what I call a better position.
    On top I am trading this stock already since Apr 18. Hope that helps.
    Further just look at stocks Phil has in his demo ports but do not trade in such high numbers. This would give you a better guidance. Other wise you will always get help on this site, for any questions. Many people are much smarten then I am.


  11. Marcel the Oct and Nov. long calls will run worthless so better get the money what ever they still pay!!!


  12. JETS/Stuart – Since we think it may break through the 200 dma and take off on stimulus, at this time I have no desire to sell short calls.

    Pullback/Kustomz – We're really stretched.  

    IBM/Wing – Nice bump today, right on track so why mess with it?  Maybe $140 you want to lock in but you could have/Should have bought back at least half of the $140 calls at $1.50-2 and THEN it would have been a good time to sell more calls.  As it is, I'd just wait to see how it plays out.  

    • House Speaker Nancy Pelosi says there will be no standalone bill to help the airline industry without a larger COVID relief package.
    • "There is no standalone bill without a bigger bill" she says, adding that Democrats have been happy to review an airline relief package recently as part of a bigger comprehensive stimulus deal.
    • Democrats don't want to give the White House a "blank check", but airlines could get funds if there were guarantees for money for state and local governments, money to "crush the virus" and money to address unemployment, she says.
    • As Pelosi was speaking, American Airlines CEO Doug Parker tells CNBC the news looks "consistent", with huge bipartisan support for extending PSP, but "a frustrating process in which we're trying to get it enacted."
    • The S&P 500 (SP500) +0.6% is dropping from its highs as Pelosi holds a press conference at the Capitol.
    • The U.S. Global Jets ETF (NYSEARCA:JETS) +0.4% is also retreating from earlier gains.
    • The broader market and especially the airlines had been rallying as President Donald Trump said earlier both sides were "starting to have some very productive talks" on airline funds, $1,200 stimulus checks and "other things".
    • (NASDAQ:AAL) -1.9%(NASDAQ:SKYW) -1.8%(NYSE:LUV) -0.9%(NASDAQ:UAL) -0.6%(NYSE:DAL) -0.2%
    • Dear readers: We recognize that politics often intersects with the financial news of the day, so we invite you to click here to join the separate political discussion.
    • CBS (VIAC +0.9%VIACA +0.3%) has unveiled its new branding, looking to unify its identity across entertainment, news, sports, studios, stations and syndication.
    • The branding, complete with updated logos for CBS and parent ViacomCBS, made its debut on CBS TV this week ahead of the upcoming fall television season.
    • It will spread across CBS News leading up to the 2020 U.S. election, and across CBS sports by the time the network broadcasts Super Bowl LV on Feb. 7.
    • The new concepts bring back legacy elements (a decades-old "This is CBS" voiceover has a prominent role) along with new touches (an animated CBS Eye logo). The CBS Eye will be used across the brand identity elevating it to a stand-alone logo as well, and a five-note melody becomes a key part of the brand.
    • CBS Television Studios, one of the industry's top programming suppliers, is becoming CBS Studios.
    • Brand attribution will be applied to programming and promotion that drives better connection between the CBS core brand, its sub-brands and our premium content available across CBS-owned and third-party platforms," the company says – more tagging with elements like "CBS Original" and "CBS Presents.
    • Following up on yesterday's announcement, Eli Lilly (LLY +2.0%reports new interim data from the Phase 2 BLAZE-1 study evaluating COVID-19 neutralizing antibodies LY-CoV555 and LY-CoV-016 in patients with mild-to-moderate symptoms.
    • Treatment with the doublet therapy reduced viral load, symptoms and ER visits and hospitalizations due to the respiratory infection.
    • An exploratory analysis showed that 3.0% of treated patients experienced persistently high viral loads at day 7 compared to 20.8% in the control arm.
    • The rate of ER visits/hospitalization was 0.9% in the doublet therapy arm versus 5.8% for placebo. A similar benefit was observed in the LY-CoV555 monotherapy group.
    • The company is working to get the results published as soon as possible.
    • An open-label pragmatic study in patients treated with LY-CoV555 alone or together with LY-CoV-016 should launch in the coming weeks. It will focus on collecting data on hospitalizations, deaths and safety.
    • LY-CoV555 (bamlanivimab), discovered at AbCellera and NIAID, is a neutralizing IgG1 monoclonal antibody that binds to the SARS-CoV-2 spike protein thereby blocking its ability to attach and enter a healthy cell. It was identified from a blood sample taken from one of the first U.S. patients who recovered from the coronavirus infection.
    • LY-CoV016 (etesevimab), in-licensed from Junshi Biosciences, is a recombinant fully human monoclonal neutralizing antibody that binds to the SARS-CoV-2 surface spike protein receptor binding domain thereby blocking the coronavirus from attaching to a protein found on the surface of healthy cells called ACE2 which serves as a "doorknob" enabling the virus to enter and infect the cell
    • Shares of Domino's Pizza (DPZ -7.7%) turned even lower after the company's earnings call this morning.
    • Domino's management warned that international store growth will be choppy for the rest of the year and noted that food costs rose significantly in Q3.
    • Sector watch: Papa John's International (NASDAQ:PZZA) is down 2.22% in early trading, while Wingstop (WING -1.9%), Yum China (YUMC -0.4%) and McDonald's (MCD -0.5%) are all also lower on a positive day for the broad market. DPZ's comments on international growth could be a factor.
    • Previously: Domino's -5% after higher costs take the shine off strong sales growth (Oct. 8)
    • A new call on digital advertising sees Cowen raising targets on ad destinations, including target raises for top dogs Facebook (FB +1.6%) and Alphabet (GOOG +1.3%GOOGL +1.3%).
    • Analyst John Blackledge raised his target on Facebook to $320 from $290 – implying 22% upside – expecting continued digital ad growth for the company from rising monetization of Instagram Stories, remaining a "key driver of impression growth," along with ongoing growth in the core Facebook and Instagram feed.
    • As for GOOGL, he raised the target to $1,825 from $1,785, looking for an incremental recovery after Q2's pullback. Indications are "positive" for Google Search with potential for continued upward pricing pressure, he says. The higher target implies 24% upside.
    • He's raised his target on Outperform-rated Snap (SNAP +1%) to $32 from $31 (19% upside), and bumped the target on Market Perform-rated Twitter (TWTR +0.4%) to $40 from $35 (13% downside).
    • Amazon (AMZN -0.3%) unveils its first custom electric delivery vans, which are one of three models designed and built in partnership with Rivian.
    • The e-commerce giant says the vehicles are equipped with state-of-the-art sensor detection, exterior cameras around the vehicle for a 360 degree view, and Alexa integration.
    • "We are working to advance and implement the technology that will support these vans—ranging from the physical charging infrastructure to enhancements and optimization of our delivery stations," says Ross Rachey, Director of Amazon's Global Fleet and Products.
    • Amazon targets having as many as 10K custom electric vehicles making deliveries by 2022 and all 100K ordered vehicles on the road by 2030.
    • In February 2019, Amazon led a $700M fundraising round for Rivian.
    • Image credit: Screenshot from Amazon's announcement video.
    • Good news for Milwaukee as Harley-Davidson (HOG +5.0%) rallies after Wedbush Securities adds it to the firm's best ideas list.
    • Analyst James Hardiman: "We believe that while yet to be manifested in HOG’s reported financials, the early-2020 quarantines and subsequent increased interest in outdoor products, synced up perfectly with the management changeover, has been beneficial to underlying fundamentals, providing the fuel for a meaningful and sustainable recovery. For this to work, we will need to see retail trends stabilize and ultimately grow, but it should not be much longer before this match is lit."
    • Looking ahead, Hardiman expects new motorcycle sales to move higher in 2021 amid ongoing consumer demand for outdoor products.
    • Wedbush has an Outperform rating on HOG and price target of $36.
    • Harley-Davidson's Quant Rating of 1.75 only ranks 390th out of 442 consumer discretionary stocks.
    • 30-year fixed-rated mortgage averages 2.87% for the week ending Oct. 8, 2020, down from 2.88% in the prior week and vs. 3.57% at this time a year ago, according to the Freddie Mac Primary Mortgage Market Survey.
    • "The year-long slide in mortgage rates seems to be ending as rates have flattened over the last month and the economic rebound has slowed," said Freddie Chief Economist Sam Khater.
    • "But with near record low rates, buyer demand remains robust with strong first-time buyers coming into the market. The demand is particularly strong in more affordable regions of the country such as the Midwest, where home prices are accelerating at the highest rates over the last two decades."
    • 15-year FRM averages 2.37% vs. 2.36% in the prior week and 3.05% a year ago.
    • 5-year Treasury-indexed hybrid adjustable rate mortgage averages 2.89%, slightly down from 2.90% in prior week and 3.35% a year ago.
    • Homebuilders rise, with the iShares U.S. Home Construction ETF (BATS:ITB) +2.02%. By name Lennar (LEN +2.79%), Taylor Morrison Home (TMHC +3.87%), TRI Pointe Group (TPH +2.09%), NVR (NVR +2.17%), and D.R. Horton (DHI +2.13%) register gains.

    • Right now the market loves the word "stimulus" as much as Blue Horseshoe loves Anacott Steel. Futures were already higher, but moved another leg up to premarket highs when President Trump told Fox stimulus talks are "productive".
    • The S&P (SP500) is up 0.5%, the Nasdaq (COMP) is up 0.7% and the Dow (NYSEARCA:DIA) is gaining 0.4%.
    • “Well I shut down talks two days ago because they weren’t working out. Now they are starting to work out, we’re starting to have some very productive talks,” Trump said.
    • "I shut it down. I don’t want to play games. And then we reopened, and I see the markets are doing well but I think we have a really good chance of doing something."
    • Trump referred to cash for airlines and $1,200 stimulus checks, plus "other things". An airline deal looks the most achievable with Steve Mnuchin and Nancy Pelosi talking, but Pelosi has dismissed this week a standalone bill for checks.
    • There's more evidence the employment recovery is sputtering, as jobless claims remain at a high level, +840K for the week. But continuing claims did dip below 11K for the first time since early April.
    • Across the sectors, gains are broad and action is very similar to yesterday. All 11 sectors are higher, with Materials (NYSEARCA:XLB) in the lead and Technology (NYSEARCA:XLK) firmly higher.
    • Crude oil is bouncing back, up 2.8% and above $41/barrel. A warning has been issued for the Gulf Coast for Hurricane Delta, on a path to reach the area Friday.
    • Financials (NYSEARCA:XLF) are higher, led by Invesco, up 5%, after Morgan Stanley said it's buying Eaton Vance. Nelson Peltz disclosed a large stake in Invesco last week.
    • Beyond Meat (NASDAQ:BYND) formally announces the addition of Beyond Breakfast Sausage Links to its line of plant-based meat offerings.
    • The company notes that Beyond Breakfast Sausage Links have no GMOs, bioengineered ingredients, synthetic colors, hormones, antibiotics or cholesterol and have 40% less sodium than a leading brand of traditional pork breakfast sausage links.
    • The brand's fourth new retail product of 2020 follows the launch of Beyond Breakfast Sausage Patties, Cookout Classic and Beyond Meatballs.
    • Beyond Breakfast Sausage Links will roll into grocery stores nationwide, including at select Kroger, Albertsons, Sprouts, Harris Teeter, Wegmans, Whole Foods Market and more throughout October.
    • The company’s products are now available at approximately 26K retail outlets across the U.S.,
    • BYND +2.30% premarket to $193.50.
    • Source: Press Release
    • Airlines are gaining again premarket, with the betting that if any further stimulus agreement can be made, this will be it.

    Treasury Secretary Steve Mnuchin and House Speaker Nancy Pelosi have continued to have phone calls about helping carriers and airline employees since President Donald Trump eased off his moratorium and tweeted his endorsement of a standalone bill.

    Airline executives were supposed to meet with the White House Friday, but that was canceled after the president tested positive for COVID-19. Things looked bleaker when Trump called off any negotiations until after the election, but it’s clear this is something both sides want. Airlines employ thousands and face years before travel returns to pre-pandemic levels.

    IATA said last week it expects the airline industry to burn $77B in cash in H2 2020. This week, Boeing cut its 20-year demand forecast for the first time ever.

    The U.S. Global Jets ETF (JETS+1.4%) is up again premarket.

    JETS is now up 6.5% from its September low and 47% from its lockdown lows of the year. But it’s still about 20% off the highs it saw following a sharp rally in early June.

    On Monday, JETS moved above its 50- and 100-day simple moving averages, both of which are sloping upward slightly. But there is a sharp downward slope still coming from its 200-day SMA at $19.64.

    “The business of actually flying airplanes is surely worth more than zero,” Closed End Fund Tracker wrote on Seeking Alpha. “Loyalty programs provide at least temporary protection against bankruptcy risk and might prove to be valuable assets in a spinoff. Expectations are extremely low, so any truly good news could lead to a sudden reversal in stock prices.”

    Before the bell, American (AAL+1.8%), United (UAL+1.9%), Delta (DAL+2%) and Southwest (LUV+1.6%) are all higher.

    Yesterday, J.P. Morgan analyst Jamie Baker came out with a bullish note and upgrades for the airline stocks, noting “year-end liquidity remains adequate for all, particularly for those that tapped Loyalty in recent months”. J.P. Morgan singles out Delta as the industry leader.

    Still, amid all the stimulus enthusiasm it’s important to note that just last week Democrats and Republicans had a chance for a standalone airline bill that amounted to nothing but the usual finger-pointing.

    House Transportation and Infrastructure Committee Chairman Peter DeFazio (D-Ore.) tried to pass a standalone bill that would extend the airline payroll support program, but was denied unanimous consent. Pelosi has reportedly brought this up to Mnuchin as an example of GOP obstructionism, but Republicans say they had a bipartisan relief bill ready to go that was ignored.

    Sector Watch

    Watch restaurants in Consumer Discretionary (NYSEARCA:XLY) as Domino’s (NYSE:DPZ) hosts its earnings conference call for a deeper look into continued demand for delivery and digital ordering. Shares are down 5% premarket on increased costs.

    See more market-moving events at Seeking Alpha’s Catalyst Watch.


  13. Yodi, I do not know if here I hinder the progress of Phil's works and the Chat that is for everyone. I see that you're Phil's assistant. Is it correct?
    Is there any kind of inbox? Thus, some private doubt could follow a private route.
    My main doubt is to understand the calculations you made to conclude that if I ended the positions I would be in credit. I'm not referring to the algebraic part but the logic.
    After I can understand how you did the calculations showing credit, how would be your answer if for example I didn't have 500 shares?
    However I closed the purchased Calls but I haven't done the rest yet. I want to understand well the alternatives presented before making a decision. Tks very much.


  14. Marcel
    First I am not an assistant of Phil, we all here to help if one can! I am just an other ordinary member.
    I guess after being on this site for more than 10 or 15 years I lost count, one should have completed the 10,000 hours of learning.
    We do not need a private box as we all can learn out of other people´s questions.
    Well the stock has already jumped from 145.20 to over 150.00 so where is the problem with losing on the stock?
    The problem is with the 15 of the 20 Jan22 calls you sold. You cover only 5 with the stock. So if the stock goes up only 5 of these options will stay in proportion to the increase, the 15 are running naked against you, so therefor we suggested the BCS 40 off to cover the 20 Jan22 callers. You buy the BCS from the cash you receive of the stock sale. You need only to sell 400 shares to cover the BCS purchase.
    The BCS I suggested 125/160 has a spread of 35 $ if the stock goes over 160 by jan23 it will pay 35 x 4000 = 140,000.00 less the amount you paid for the purchase of the BCS some 52,000.00. With this BCS you will be able to keep the Jan22 callers you sold in check. They might be trebling you but you can roll them.
    All this needs a bit of experience. I surely can not understand why you started in such high numbers of options. That is where the 10000 hours of learning come in. Trust you follow my way of thinking.


  15. Marcel please not that these numbers change from the numbetrs I gave you this morning before opening.

    If the clown gets a sneeze the market might be up or down!!!!!!!


  16. marcel

    additional information: 

    a few people here got colored chat boxes due to special contributions to chat- mostly in the past

    there are no private chat channels, though some people post an email address if they are looking for something special.   

    Yodi is in Spain and you might have noticed English is not his primary language

    PSW is a teaching site and you are encouraged to learn how to trade, why we make the trades we do, and how to make adjustments …the PSW way.

    Many of us have been here for years, but as Yodi said, always ask if you dont understand since there is always more to learn. 

      


  17. EPD/Phil Trying to slide into your EDS spread. So far have:

    1000 EPD $15.78

    4 EPD ’23 puts ($3.10) (Couldn’t get the other 6)

    Planning to sell 10 $15 calls as suggested but with the move up, would you sell the $17s at about the same price as the $15s were (~$3) or would you still sell the $15s for about $3.80?

    THX


  18. Marcel just about all right members with colors contribute to assist other members or give information like STJ. the lost Frenchman!!!
    I am actually German and officially registered in Mexico. Try to speak English Spanish and Dutch, besides German. But tour Europe for my pleasure. Like Spain because of the nice weather and mostly happy people. Regret they do not have such a good time now.


  19. Biotech Update: Rolling PSNL from Oct 22c to Nov 25c for a net debit of 60c per contract.  


  20. Thank you for the responses and support from all of you. Honestly, this desire to help us has made me very interested in continuing with the group. As I said, I'm new here, and I'm not sure how to proceed or who the participants are. I'm not new to the market. First time in years I was caught with a sharp fall in an action because of suspected fraud. When I joined the action it looked good at the price of $ 155.00 and I sold 5 Puts 150.00 After the abrupt drop I was distracted and was not seeing a way out and to try not lose with the falling put I sold calls. But just as it fell brutally it rose brutally. Summary I made a mistake in this trade since the start. I never did that. I always use Puts a lot out of money when stocks is near the top. 
    I followed some videos of Phil and found it interesting how he always has a creative way to solve.
    I can buy another 1500 and be covered. But I want to take the opportunity to see how to find a good and low risk solution.
    But you did not answer that calculation you mentioned. I understood what you explained. Only that if the paper falls 15/20% you lose on calls and puts. Your solution is good but still expensive.

    My first impression is that your calculation where closing everything would be with credit seems incorrect. So I wanted to understand better. How to leave with 9k credit and without losing what I am losing until the moment? Thanks


  21. Not a hinderance Marcel, it's good to have in-depth trading discussions with my "assistant" cheeky  Yodi has just been on this site long enough to be a very reliable source of ideas himself. 

    EPD/Wing – Nothing wrong with that.  No need to sell more puts unless there's a dip.  Given that move up, I would not be too quick to sell anything but yes, getting the same $3 for the higher calls is the way to go. 

    Calculations/Marcel – As near as I can tell, you came in at $145, the stock went to $180 but then plunged to $110 and you panicked and over-covered and then you got burned when it went back up and now you are stuck betting against yourself.  That's why I suggested simplifying the position and working towards getting even – sometimes not losing is winning.  Having too many legs in your positions can make them very hard to adjust when the market changes – try to keep things simple.  


  22. I wish to make some comments on a trade which was published at one the trading site personal finance.
    The play was entered 9/2/20
    Buy the stock BHP for 56.10 and sell the Nov.20 57.5 call for 2.25.
    Downside protection is 53.85
    Sell the Nov. 50 put for 1.75
    Today the stock is trading at 52.37 . Obviously at todays date the buyer of the stock has lost 3.73.
    Even that I know BHP personal, was in my previous life a supplier to them, at the time Sep 2 I mentioned that the steel industry was not in the best of shape, even they are yielding 4.2 % paid  semi annual 1.10. PE 16.7
    In the above case I decided to buy a Jan22 for 9.30 sell the Nov 20 57.5 call for 1.70 and the Nov. 50 put for 2.00. Even after the present drop in stock price my overall positions shows  still a profit of 34.00 per 1 option play. Even that my leap call now only has a value of 8.00, my loss on the call is only 1.30 in comparison of the stock loss of 3.73. At present my short Nov. call and put might be going worthless.
    Leaving me with my leap option to do an other play in Nov. This is to indicate that using a leap call only and not selling a leap call makes a good play tool, without investing in the much costlier price of the stock. Poor mans trade! Obviously you will not receive any div.


  23. Marcel May be the name PROFIT  in your case is incorrect. The credit of 9K is actually what is left after closing, surely you do not make a profit out of this, but you would get away with a blue eye!

    Obvously buying an other 1500 shares now will solve the problem, but you will spend an other 150 x 1500 =225,000.00 where as with the BCS you will equal out by selling 400 stock. If the market tanks by 20% you will lose much more in stock value than in holding the jan23 BCS. Just look at my exsample trading BHP.

    It is getting complicated which calculation are you refering to “But you did not answer that calculation you mentioned“


  24. Here is a question for all; My son has an Economics class that will have a forum with the CEO of GS, David Solomon AKA  DJ-D-SOL. What questions would you ask him if given the chance?


  25. GME entering into a partnership with microsoft – up 70% or so today. Wish I would've kept some from back in March!



  26. Randers1 – my question to the CEO of Goldman Sachs would be, how would he solve the U.S.'s debt problems – federal debt, personal credit card debt, student loan debt.

    Your son must go to one hell of a school.