Thanks Burr.
/RB/Craigs – See that silly spike into the close. As we thought, they REALLY wanted to print $1.65 at 2:35.
That's about the easiest money in the market – play for /RB long into a 3-day weekend. We get 6 or 7 a year – really we could just do that and take the rest of the year off.
Congrats Craigs, glad it's clicking for you.
CBI/Scott – I like them, they are great when infrastructure spending comes back. They had a one-time loss last year that makes them look worse than they are and it's actually a good thing as they wrote off losses from their nuclear construction business they "sold" (gave to) to Westinghouse. There was an indemnification against contamination but that window has closed so now they are free and clear and that makes them a great play.
They certainly should be back on track to make $400M+ with the $4Bn valuation so certainly in my sweet spot. At $37.79, they don't pay a dividend but we can add them to the LTP:
- Sell 10 CBI 2018 $32.50 puts for $5 ($5,000)
- Buy 10 CBI 2018 $35 calls for $8.50 ($8,500)
- Sell 10 CBI 2018 $50 calls for $2.80 ($2,800)
That nets us into the $15,000 spread for net $700 so the upside is $14,300 (2,042%) at $50 and ToS says the margin on the short puts is just $3,000 so massively margin-efficient as well! Good find.
Futures/Latch – They are fun if you use restraint and avoid GAMBLING on the middle of ranges – especially when you are trading just because you are bored or "need" a win. Forcing trades is how you go broke. I can go weeks without trading oil and then there could be a week I make 10 trades – it depends on the news and whether it's in an obvious channel and what part of the contract cycle we're in. If ALL of those factors aren't favorable – it's much smarter NOT to guess.
Have a great holiday everyone!
– Phil
