Top Trades for Wed, 19 Sep 2018 10:37 – MJ

MJ (ETF) owns some TLRY – not sure at what price but I bet it's not priced into them yet.

The investment seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Prime Alternative Harvest Index. The fund will invest at least 80% of its total assets, exclusive of collateral held from securities lending, in the component securities of the index and in ADRs and GDRs based on the component securities in the index. The index is concentrated in the Pharmaceuticals and Tobacco industries and tracks the performance of the exchange-listed common stock (or corresponding ADRs or GDRs) of companies across the globe. The fund is non-diversified.


Top 10 Holdings (57.46% of Total Assets)

Get Quotes for Top Holdings

Name Symbol % Assets
Canopy Growth Corp WEED.TO 10.72%
Cronos Group Inc CRON.TO

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Top Trades for Thu, 06 Sep 2018 15:08 – SDS Hedge

Very interesting that Tech can't catch a break lately.  MU and other chips getting hit hard.  We'll see what AVGO says later.

Hedge/Gard – To hedge $1M of SPY positions, I'd go with an SDS hedge.  He'd be looking to offset a $200,000 loss and SDS is at $34 so +20% (a 10% S&P drop on the 2x inverse ETF) is $42 and the March $34 ($2.60)/$40 ($1.50) bull call spread is $1.10 and pays $6 in a big drop so let's say he wants to offset $60,000 worth of damage – he can do that for $11,000 and that's the cost of insurance.  

I'd pair that with some short puts on stocks he'd REALLY like to own if they get cheap, like 10 MU 2020 $42 puts at $6.40 ($6,400) which drops the net cost to $4,600 on the $60,000 spread, giving it $55,400 (1,200%) profit potential if SDS is over $40.  


Top Trades for Tue, 04 Sep 2018 12:34 – OIH and DLTR

OIH/EMike – We have them in the Butterfly Portfolio, I like how they are pretty predictable in their channel.  Now bottoming so I like them long:

As a new trade, I'd go with:

  • Sell 5 OIH 2020 $23 puts for $2.10 ($1,050) 
  • Buy 10 OIH 2020 $22 calls for $4.25 ($4,250)
  • Sell 10 OIH 2020 $27 calls for $2 ($2,000) 

That's net $1,200 on the $5,000 spread and, when they move up in the channel again, you can sell 3 Oct $26 calls for $1 (the price of the $24s, so a $2 move up) which are now 0.27.  That's $300 and if you pick that up every other month for 16 months, that's $2,400 while you wait – nothing to sneeze at!   Just the straight trade has an upside potential of $3,800 (316%) but I'd sell the calls for another 200% upside potential.  

Let's add that to the OOP as it's a good thing to work on!  


DLTR/Soma – Oddly unloved considering they have good top and bottom-line growth.  56,000 employees is a problem as they are generally minimum wage so say they have to pay them $5 more per hour x 56,000 x 40 x 52 = $116.5M or 10% of the profits – that's the fear but so what?  

Year End 03rd Feb 2013 2014 2015 2016 2017 2018 TTM 2019E 2020E CAGR / Avg
Revenue $m 7,395 7,840 8,602 15,498 20,719 22,246 22,757 22,884 24,116 +24.6%
Operating Profit $m 920.1 970.3 1,040 1,050 1,705 1,999 2,011     +16.8%
Net Profit $m 619.3 596.7 599.2 282.4 896.2 1,714 1,714 1,313 1,462 +22.6%
EPS Reported $ 2.68 2.72 2.89 1.26 3.78 4.85 4.84     +12.5%
EPS Normalised $ 2.69 2.72 2.99 1.38 3.80 4.92 4.73 5.52 6.11 +12.9%
EPS Growth % +33.2 +1.5 +9.6 -53.8 +175.4 +29.5 +16.7 +12.2 +10.8  
PE Ratio x           16.4 17.0 14.6 13.2  
PEG x           1.34 1.40 1.35 1.24

At $19Bn, the company isn't overly cheap but it's a nice, steady stock and should do well in a downturn.  Certainly I like selling 10 DLTR 2020 $70 puts for $5.75 ($5,750) to add them to the LTP as that's nice cash for another 20% discount to the current price. 

Top Trades for Fri, 31 Aug 2018 13:59 – HBI

Dollar over 95.  /KCN9 @ $110.

DIS/Yodi – DIS is a 20-year hold to me.  They are in a very heavy spending cycle with the Star Wars parks but if they do half as well as Universal's Harry Potter Park, they'll add Billions to the bottom line.  Meanwhile, ESPN will keep struggling and that will keep a lid on growth as they really have to figure out how to remodel their revenues against cord-cutting.  Sounds like you nailed your targets for the Q and I think $110 is still the right line for next Q, though DIS would not be exempt from a crash so I'd go lighter on the short puts.

HBI/Tangled – Certainly they are undevalued at $17.50 as that's $6.3Bn with $7Bn in sales and $635M in profits (10x).  They did some restructuring last year and took a big hit in Q4 but should come out with $1.75 per share this year so a good, steady thing to own whenever it's low in the channel.

Year End 30th Dec 2012 2013 2014 2015 2016 2017 TTM 2018E 2019E CAGR / Avg
Revenue $m 4,526 4,628 5,325 5,732 6,028 6,471 6,631 6,772 6,850 +7.4%
Operating Profit $m 440.1 515.2 564 595.1 775.6 723.1 739.2     +10.4%
Net Profit $m 164.7 330.5 404.5 428.9 539.4 61.9 38.8 634.8 672.2 -17.8%
EPS Reported $ 0.58 0.81 0.99 1.06 1.40 1.41 1.36     +19.5%
EPS Normalised $ 0.58 0.81 0.99 1.06 1.40 2.29 1.96 1.75 1.89 +31.6%
EPS Growth % -5.1 +40.0 +22.2 +7.2 +31.4 +64.1 +16.4 -23.7 +7.86  
PE Ratio x           7.64 8.93 10.0 9.28  
PEG x           n/a n/a 1.27 3.22

In fact, we do not have HBI in the LTP so let's add it!  

  • Sell 30 2020 $18 puts for $2.70 ($8,100)
  • Buy 50 2020 $13 calls for $5 ($25,000) 
  • Sell 50 2020 $20 calls for $1.45 ($7,250) 

That's net $9,650 on the $35,000 spread that's $4.50 ($22,500) in the money to start and, of course, when HBI gets up in the channel again, we can sell some short calls to whittle down the basis but the upside potential on just this is $25,350 (262%) and that's just 17 months away!  

LB/Jabob – If AMZN bought LB it would add 33% to their earnings.  I guess that means LB is worth $330Bn?  

Top Trades for Thu, 30 Aug 2018 14:23 – WPM

Speaking of /SI, WPM is in the toilet thanks to /SI prices.  The last 3 Qs they beat earnings by 18.8%. 6.7% and 14.3% and they should have no trouble hitting 0.60 for the year on a $17.49 stock (p/e 29) in an off year.  

Year End 31st Dec 2012 2013 2014 2015 2016 2017 TTM 2018E 2019E CAGR / Avg
Revenue $m 849.6 706.5 620.2 648.7 891.6 843.2 857.2 823.4 920.5 -0.1%
Operating Profit $m 600 387.7 202.9 -157.3 223 74.7 328.9     -34.1%
Net Profit $m 586 375.5 199.8 -162 195.1 57.7 315.1 271 318.7 -37.1%
EPS Reported $ 1.65 1.05 0.56 -0.41 0.45 0.13 0.71     -39.8%
EPS Normalised $ 1.65 1.05 0.68 0.22 0.56 0.46 0.69 0.58 0.69 -22.3%
EPS Growth % +6.5 -36.0 -35.6 -67.2 +151.4 -17.0 +13.2 +25.6 +18.2  
PE Ratio x           38.1 25.8 30.3 25.7  
PEG x           1.49 1.01 1.67 6.63

They won't recover unless /SI does but it's a slightly safer way to play silver than just risking the Futures.  In the OOP, we have the 2020 $15 calls half-covered with the $25 calls and we sold the $20 puts for $3.30 so net $16.70 and we're getting close, but this is below where we came in in Feb – so another chance to play. 

As a new play on WPM, I like:

  • Sell 10 WPM 2020 $20 puts for $3.70 ($3,700)
  • Buy 20 WPM 2020 $15 calls for $3.85 ($7,700) 
  • Sell 20 WPM 2020 $20 calls for $1.55 ($3,100) 

That's net $900 on the $10,000 spread that's $5,000 in the money at $17.50 and your worst case is owning WPM at net $20.90 but the upside is a nice 10-bagger at $9,100 and it's not like we're asking for much.

In the OOP:

  • Let's buy back the 10 short 2020 $25 calls for 0.62 ($620)
  • Let's add 10 more 2020 $15 calls at $3.85 

In the LTP:

  • Let's buy back the 10 short 2020 $25 calls for 0.62 ($620)
  • Let's roll down the 20 2020 $17.50 calls  at $2.40 to 40 of the 2020 $15 calls at $3.85 

Top Trades for Tue, 28 Aug 2018 15:42 – AAPL


As a new spread on AAPL, I'd go for:

  • Sell 15 June 2020 $185 puts for $11 ($16,500) 
  • Buy 80 June 2020 $180 calls for $54.50 ($436,000) 
  • Sell 80 June 2020 $240 calls for $22 ($176,000) 
  • Sell 40 Jan 2019 $210 calls for $18.20 ($72,800) 

That $480,000 spread that's $320,000 in the money nets you in for $170,700 but, hopefully, it will produce a pretty steady $40,000 per q in profits while you wait and whittle that $170,700 down quickly.  If AAPL goes lower, the short calls go worthless and you sell more for another $80,000 and then you have $10 per long to roll down $20 and widen the spread.  If AAPL goes higher, just remember to stop 1/4 over $20 and 1/4 over $25 so you would only be 1/4 covered (easy DD roll) if AAPL made a big move up.

I prefer the smaller, more manageable size to start as you can easily DD on these if you have to and they'll still make over $300,000 (200%) in two years with not much of a move from AAPL required.  

This is a HNW trade for large portfolios, of course.  You may want to divide the amounts by 5 or 10 to size it for a more modest portfolio and, don't forget, you have to REALLY want to own AAPL for $185 to sell the short puts!



Top Trades for Thu, 23 Aug 2018 11:01 – LB

LB/Batman – You're right, they are not instilling any confidence, down to $28.50 now.  I don't think there's much they can do or say though as they are still transitioning and a new CEO is coming in for Pink, and they don't want to step on her plans.  The outgoing CEO made some really crappy statements too – I get the impression she's not leaving by choice.  Victoria's Secret is 2/3 of the business and Body Works 1/3 so I'm sure there's always been a rivalry and, essentially, they are replacing Denise with Amy BECAUSE Amy was putting up better numbers in her, smaller division. 

FNSR/Albo – Up 7% now, hopefully some other joker can downgrade them! 

Image result for russian underwear model womanLB/Batman – Analyst day?  Hopefully they can stay out of the spotlight for a Q or two and simply hit their numbers without any more "adjustments".  Sales were there so the bulk of the problems are internal yet people are trading off the narrative that Victoria Secret is no longer a thing.  I'll tell you that Pink is very much THE thing for young teens and the women I know still buy Victoria Secret stuff, despite the "Me Too" movement.  For some reason, they want to be empowered but not if they have to wear these.

Founded in 1977, Victoria’s Secret has long been the leader in the women’s lingerie market, with $1.1 billion in revenues in 2015. IBISWorld analysts put Victoria’s Secret share of the entire lingerie market at 61.8%.

So it's hard for them to grow share from there yet, somehow, revenues do keep rising, though slowly:

Financial Summary

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Top Trades for Fri, 17 Aug 2018 13:15 – MU

Welcome VKat!  Good target Dave! 

At $47, they are at $54.5Bn in market cap and, although they did $5Bn in profits last year on $20Bn in sales, they paid no taxes and we can't assume that keeps going but profits are fantastic, $7Bn for the first half on $15Bn in sales so, even considering the cyclicality of the business, $54.5Bn is a fair price.

RAM should be a growth industry going forward – if you are an artificially intelligent being, what would you want for Christmas?

So, for the Long-Term Portfolio, let's:

  • Sell 15 MU 2020 $42 puts for $5 ($7,500)
  • Buy 20 MU 2020 $40 calls for $13 ($26,000)
  • Sell 20 MU 2020 $55 calls for $6.65 ($13,300) 

That's net $5,200 on the $30,000 spread that's 1/2 in the money to start.  Upside potential at $55 is $14,800 (284%) in 18 months and TOS says net margin on 15 short $42 puts is $5,797, so it's a very margin-efficient trade as well.

And what Yodi said! 

Good group effort on that one….

Top Trades for Thu, 16 Aug 2018 10:54 – PZZA

Aretha/Jomp – She was so great! 

PZZA/Yodi – We picked some up for the hedge fund, mostly short puts – I think they've suffered enough.

For the LTP, I like:

  • Sell 15 2020 $42.50 puts for $7.90 ($11,850)
  • Buy 20 2020 $35 calls for $15 ($30,000)
  • Sell 20 2020 $50 calls for $6 ($12,000) 

That's net $6,150 on the $30,000 trade that's $17,000 in the money to start!  Upside potential at $50 (not ambitious) is $23,850 (387%) which will pay for a nice cruise next summer!  

Top Trades for Mon, 13 Aug 2018 10:38 – SPWR

GNC/Japar – Long, slow turnaround for them (if it works).  I think $3 is a good price ($250M) with $2.5Bn in sales and $19.5M (0.44/share) made in the past two quarters.  There's really no logic to this price – it's just going to take the markets a long while to accept that. 

SPWR/StJ – The Trump Administration is still waging a stealth war against solar and other renewables, despite their falling out with the Kochs but I don't see how it affects the long-term trend towards solar on a global scale.  They may have a rough patch on trade issues but, in the long run – it's the future.  

I like the long-term play at this price though we already have them in our portfolios.  As a new trade I'd go for:

  • Sell 10 SPWR 2020 $7 puts for $2.25 ($2,250)
  • Buy 20 SPWR 2020 $5 calls for $2.65 ($5,300)
  • Sell 20 SPWR 2020 $10 calls for $1.15 ($2,300)

So that's net $650 on the $10,000 spread that stars off $4,000 in the money – not bad!  Upside potential is $9,350 (1,558%) if solar power manages to survive the Trump era. 


Phil's Favorites

Honourable Theft


Honourable Theft

How one young woman broke down the gates of knowledge

By George Monbiot, published in the Guardian 13th September 2018, Scientific publishing is a rip-off. We fund the research – it should be free

Never underestimate the power of one determined person. What Carole Cadwalladr has done to Facebook and Big Data and Edward Snowden has done to the state security complex, the young Kazakh...

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EU Justice Commissioner Quits Facebook In Disgust, Doubles Down On Regulatory Threats

Courtesy of ZeroHedge. View original post here.

The European Commissioner for "justice, consumers and gender equality" abruptly closed her Facebook account this week, describing her account on the social media platform as a "channel of dirt" after she told a Brussels news conference that she received an "influx of hatred" on the network, reports Euractiv

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Bitcoin Update - Bullish pressure present

Courtesy of Read the Ticker.

If Venezuela or Argentina conducted business in bitcoin then their savings and wealth would be a lot better off. Yes Bitcoin and Litecoin have been volatile over the last few years,  but nothing like Bolivar (Venezuela) or the Peso (Argentina). 

You say they could use the US dollar, yes maybe so, but those who use the US dollar have to the yield to the US Federal Reserve where as bitcoin is decentralized and those who use it yield to no one.

In the next 12 to 18 months the lightning network and atomic swaps logic will forge Bitcoin and Litecoin together as the go to crypto decentralized currency. Of course massive risk, so the investor should be warned you can lose all your funds.  

Time to review the demand ...

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Blackstone President Jon Gray Talks About C Corp Status

By Jacob Wolinsky. Originally published at ValueWalk.

CNBC Transcript: Blackstone President Jon Gray Speaks with CNBC’s David Faber Today

WHEN: Today, Friday, September 21, 2018

WHERE: CNBC’s “Power Lunch

Image source: CNBC Video Screenshot

The following is the unofficial transcript of a FIRST ON CNBC interview with Blackstone President Jon Gray on CNBC’s “Power Lunch” (M-F 1PM – 3PM) today, Friday, September 21st. The following is a link to video of the interview on

Blackstone president Jon Gray says company is open to, but still studying whether it should become a C-c...

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Members' Corner

Why obvious lies still make good propaganda


This is very good; it's about "firehosing", a type of propaganda, and how it works.

Why obvious lies still make good propaganda

A 2016 report described Russian propaganda as:
• high in volume
• rapid, continuous and repetitive
• having no commitment to objective reality
• lacking consistency


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Doc Copper breaking out after large decline, says Joe Friday

Courtesy of Chris Kimble.


Doc Copper over the past few months has been hit hard, as sellers drove it down nearly 25%.

This decline brought it to the price point (2), where four different support lines came into play, which looks like a support cluster. As the decline was taking place, momentum was hitting oversold levels.

Joe Friday Just The Facts Ma’am– This week Doc Copper is experiencing its strongest rally this year, as it breaks above steep falling resistance.

Should Doc Copper contin...

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Cantor Fitzgerald's 7 Buys For 7 Biotechs

Courtesy of Benzinga.

Cantor Fitzgerald has high hopes for patients with rare and orphan diseases. 

“We believe that biotech has entered a golden age of innovation and productivity across many therapeutic areas,” the firm said in a Friday note. Cantor expanded its portfolio with seven new neuro-innovator and platform-enabled therapeutics companies.

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Mania to Mania


Mania to Mania

Courtesy of 

“Russell rarely played the stock market and had little investing experience when he put around $120,000 into bitcoin in November 2017.”

This comes from a CNN money article, Bitcoin crash: This man lost his savings when cryptocurrencies plunged. From January 2017 through the peak in early 2018, Ethereum gained 16,915%.

Any time you have something go vertical, you just know that some peopl...

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Reminder: Pharmboy is available to chat with Members, comments are found below each post.


Gene-editing technique CRISPR identifies dangerous breast cancer mutations

Breast cancer type 1 (BRCA1) is a human tumor suppressor gene, found in all humans. Its protein, also called by the synonym BRCA1, is responsible for repairing DNA. ibreakstock/

By Jay Shendure, University of Washington; Greg Findlay, ...

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Mistakes were Made. (And, Yes, by Me.)

Via Jean-Luc:

Famed investor reflecting on his mistakes:

Mistakes were Made. (And, Yes, by Me.)

One that stands out for me:

Instead of focusing on how value factors in general did in identifying attractive stocks, I rushed to proclaim price-to-sales the winner. That was, until it wasn’t. I guess there’s a reason for the proclamation “The king is dead, long live the king” when a monarchy changes hands. As we continued to update the book, price-to-sales was no longer the “best” single value factor, replaced by others, depending upon the time frames examined. I had also become a lot more sophisticated in my analysis—thanks to criticism of my earlier work—and realized that everything, including factors, moves in and out of favor, depending upon the market environment. I also realized...

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Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.


This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...

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Free eBook - "My Top Strategies for 2017"



Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:


·       How 2017 Will Affect Oil, the US Dollar and the European Union


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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.

To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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