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Mon/Tues Virtual Portfolio Moves

By phil
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Sorry this is late but I chose to pay more attention to fluid earnings this week:

Posted April 16, 2007 at 9:30 am | Permalink (Edit)

GOOG is a go btw – better news than I thought with new radio deal.

Posted April 16, 2007 at 9:54 am | Permalink (Edit)

BSX – I think it’s undevalued by a mile, the question is when to sell a position against it and perhaps we’ll sell the May $17.50s if we get a nice run-up but if we get to $16.50, we may have another good run to go.

200 dma is $16.30 rejection there is OK but we need to hold inverted 50 dma at $15.85 otherwise we need to sell May $15s.

Posted April 16, 2007 at 10:14 am | Permalink (Edit)

GOOG – I can’t do more than write an entire article with charts and graphs to indicate TAKE OUT YOUR CALLER!!!! A little late now and you can expect a little pullback here but really get out if it holds $470 through lunch.

Posted April 16, 2007 at 10:42 am | Permalink (Edit)

Oil puts – not the best time with inventory looming and an unexpectedly cold week behind us and a snowy weekend in much of the country. It’s tough to call, much less driving but much more heating.  Still if you start off light with May puts and plan on DD, Roll to June, DD, Roll to July and can afford to give up in July (because it’s crazy to short end of summer into fall when they start to switch over refineries) then now is a good time! 8-)

I’m naked on INTC into earnings. If they go down it’s time to go on vacation anyway… That being said I will be lightening up a little as I’m way ahead.

Posted April 16, 2007 at 10:51 am | Permalink (Edit)

TSO, oil puts – the hardest thing to do after you DD on a play is to take half off the table even at the adjusted basis but if you intend to puirsue that strategy it is a mathematical necessity.

Posted April 16, 2007 at 11:01 am | Permalink (Edit)

WOW – DNDN May $15s still $5.20 with the stock at $15.70, buying the stock and selling those calls is another XXX in the $10KP for 100 shares and one contract and for any virtual portfolio!!! XXX Oh, buy the stock and wait a bit, it may bounce!   That’s a great play no matter what – buy it for $10 (net) get called away at $15 for a 50% monthly gain… If it goes to $9 you can still sell the $10s for $5 picking up another $3 (apx) of downside protection so you’re now in with a $7 base and if it drops to $5 you can sell the $5 calls and get out even.  This has nothing to do with my faith in the stock, this is about the idiots paying a 40+% premium on a 40-day contract.

Posted April 16, 2007 at 11:15 am | Permalink (Edit)

GOOG – selling Apr calls is never a bad idea because they are so overpriced as long as you can afford to deal with the potential buyout (if you roll you are really boxing yourself in of course).

Posted April 16, 2007 at 12:03 pm | Permalink (Edit)
  • TM May $130s for $1.25
Posted April 16, 2007 at 12:21 pm | Permalink (Edit)
I’ve been holding the AMZN naked Jul $37.50s for quite a while and I’ll be cashing those out at $9 if I can ($8.50 if we run out of steam) and moving to the Oct $45s for $4.45 and selling the 2/3 May $45s for 2.15
Posted April 16, 2007 at 1:01 pm | Permalink (Edit)
They have a rough number to hit, it will be impressive if they pull it off but I’ll be a buyer if they miss and dump down.
Posted April 16, 2007 at 1:12 pm | Permalink (Edit)

SIRI – If you can afford it, just set it aside for a couple of years and forget about it, put a sell in at an acceptable loss, say $6 for this year (wouldn’t you be thrilled to get $6?) and just hope it comes back. Right now this stock isn’t even worth selling calls on as even the premiums have evaporated. The Jan ‘09 $2.50 is $1.12, just a .65 premium for 20 months.

Actually, I changed my mind. I would (and will) trade all my shares for those and I will wait for earnings, which should be a loss but far less of a loss than last year. Mel is a great CEO and I will trust him with my money so I’ll hope for a nice run so I can start selling some calls down the line.

Posted April 16, 2007 at 2:39 pm | Permalink (Edit)
INTC – If INTC has problems we’re all doomed so you’re better off taking QQQQ puts to cover a positive Intel play
KO is tomorrow and I am going to buy 50% protection on the $50 puts for .38 since I’m up a lot, not because I really think they’ll do badly, but if they do well I will be selling calls at a lot more than .38 more for 2 years! XXX
Posted April 16, 2007 at 3:04 pm | Permalink (Edit)
FSLR – sure, the current p/e of 948 and the forward p/e of 75 just scream for another 10% gain in market cap (that would be one of those places where I need the sarcastic font).  This is a $4.6Bn company with $140M in sales and $5M in profits. Unless they are buying TSO, I don’t think I’d be playing this one!
Posted April 16, 2007 at 4:07 pm | Permalink (Edit)

YHOOs earnings are TOMORROW and I’m certainly willing to toss .95 at the May $32.50s as expectations are very low and I’ll cover that with the $30s for .35 XXX I think earnings are tomorrow pm so I’m taking small (20%) positions and will wiggle into a 40% position as it swings around tomorrow.

TSO – I would DD on the May $100 puts at $1.80 and sell half the total position against the current $110 puts at $1.90+ with a stop at $3 but it could be a nasty play with inventories coming up and all.

As an alternative you can bracket up to the $105 puts for $1.30 more and then DD at $3.10 for a net of around $4.75 on 10. You would need a $5 drop to get out even and, if not, another $4K would let you do it all over again a month later with the Jun $110 puts. Don’t forget that while this is going on (if you have the margin for it) we would get another opportunity to sell calls into a big run.

Tuesday:

Posted April 17, 2007 at 10:07 am | Permalink (Edit)

I will absolutely be covering most of my tech with QQQQ puts this afternoon no matter where we go. The SOX are down 3.80 so it’s amazing the Nasdaq isn’t in the toilet anyway. The Dow is only up because KO is up 2% and JNJ is up 3% (both are heavy weighted), most of the Dow is red: http://finance.yahoo.com/q/cp?s=%5EDJI

Posted April 17, 2007 at 10:13 am | Permalink (Edit)
TSO getting on the button support at the same level at the same time as yesterday. This is a very good time to sell the $110 puts for $1.80 against your longer puts or taking the $110s for $1.50 as a mo play – quarter stops as this is very risky, if it falls below $109 they’ve got big trouble but you can follow XOM, VLO, SUN, XLE and OIH for signs of a reversal.
Posted April 17, 2007 at 10:20 am | Permalink (Edit)

ICE is being jammed down at $130 but may make a very nice spread now with the Jun $140s at $6 selling the current $130s at $2.25 because the May $135s are $5.40 already so they make a great roll if you have to (no matter what your April caller loses $1.75 of premium and the May $135s have enough premium to take them through your bracket already). XXX but buy first and wait a bit, maybe get $3 or more on a nice bounce today for the Aprils. This is a nice $10KP play for 3 contracts if you can make the spread!

Possible top for ICE at $132 but let it run if it breaks out from there (you can always just sell the May’s for a $1 spread).

Posted April 17, 2007 at 10:33 am | Permalink (Edit)

MCO – $70 puts at $1.20 look very tempting at the moment! XXX mo play for the risk takers!

Posted April 17, 2007 at 10:58 am | Permalink (Edit)

WM – excellent bank beaten down on fear, not fundamentals. I’d go long on a 5% dividend payer with a p/e of 10 and be happy to buy more if earnings are bad. The Jan ‘09 $40s are $4.70 and the May $42.50s are .50 so I like my potential rents.

This is complicated logic but, rather than buy 20 Jan ‘09 $40s for $4.70 ($9K) I will buy 20 May $40s for $1.52 and sell 10 $40s for $1.30. The .80 premium cuts my May calls down to just $1.10 (a .60 premium) and cuts my capital at risk to $1,700 out of my intended $9K position.

If it goes down, I will be thrilled to buy the Jan ‘09 $35s for $4.70 or the ‘09 $40s for $1,700 less than I was willing to pay today. If it goes up, I sell into the initial excitement and roll into the position I really wanted but, if we get a really good run, perhaps I will end up taking the ‘09 $45s in the money for an addition $2.

Posted April 17, 2007 at 11:13 am | Permalink (Edit)

TSO – stopped out of that call already!!! (.25 stop)

Posted April 17, 2007 at 11:49 am | Permalink (Edit)

12,789! Record high! Buying 1/4 posiiton (150) in DIA May $128 puts for $1.50 just for kicks since Europe is not joining our party so far. Will buy another round at EOD to protect gains. XXX

Posted April 17, 2007 at 12:07 pm | Permalink (Edit)

WFR – I’d try to time the May sale as I still think they can break up from here. They had a huge $10 gap up last earnins to $55, then a pullback to $50 and now at $65 (they had run up from $40 to $45 ahead of last earnings from a base at $35 in prior months). I’d call this base $50 so $60 with a run to $65 ahead of earnings is a copy of last Q.

IF they hit their mark, which is pretty much a double of last year’s earnings, then they are way undervalued. If not, I still love them long-time and would be willing to take my lumps.

Posted April 17, 2007 at 12:45 pm | Permalink (Edit)

Picking up AAPL $90s for .95 as a fun mo play. XXX

Posted April 17, 2007 at 1:30 pm | Permalink (Edit)
Oil puts – well my favorite put is down $4 from yesterday, just $1 from the 5% rule. XOM is holding up well but shorting them has been suicide. SLB would be my top choice at the moment with the May $75 puts just $1.35 XXX

No long-term oil puts other than DD on my XOMs, which is a large position.

DD on my Apple $90s at .80 for a .90 avg, stop at .75, half out at .95 to drop basis to .85 otherwise I don’t risk it overnight.

Posted April 17, 2007 at 1:59 pm | Permalink (Edit)

QQQQ – taking the Aprils is a gamble while taking the May $46 puts is an investment you can use to aggressively buy techs against if we get a push tomorrow. You could take Apr $45 puts but it’s an all or nothing earnings play at .25. The May $46 puts are just $1.21 and the May $45s are .70 while the May $47s are $2 so you have a return of .80 up and .50 down on the same position, that’s a good risk/reward and, if momentum goes against you, you can always sell the Apr $46 puts (now .95) to offset quick losses on a jump tomorrow as they will lose money relatively slowly on a spike.

AAPL – 1/2 out at $1 for a net .13 gain (was .875 avg entry) which I apply back to the basis for a .75 position. I set a .75 stop now as I’ll be sick of it if it falls back again at this point.

Posted April 17, 2007 at 2:33 pm | Permalink (Edit)
If AAPL doesn’t make $91 before $90.50 that’s plenty for me (out at $1.25)
Posted April 17, 2007 at 3:06 pm | Permalink (Edit)

Looks like they are taking the market up. If they fail I will DD on the DIA May $128 puts for $1.50 and either way I will pick up the QQQQ May $46 puts for about $1.20.

Posted April 17, 2007 at 3:19 pm | Permalink (Edit)

I’m sorry to say but it is irresponsible to leave the INTC May $20s in the $10KP at $1.25 (up 184%), that’s not what this folder is about guys.

Also, in the STP, Mays have to come off the table and July’s cab be moved to 2X the $22.50s at .54, taking the original bet there off the table and letting the profit ride.

Posted April 17, 2007 at 3:56 pm | Permalink (Edit)

IBM – the price is right on the May $100s, you can sell the Apr $100s for .48 too, which won’t hurt your gains too much but will cut your losses in half. XXX (big gamble though).

Mattress – as I said I am DD (200 contracts) on the DIA May $128 puts at $1.52 (avg) and in for 100 QQQQ May 46 puts at $1.19. This is still a very bullish overall posture as I have a LOT of naked leaps but we’re up 300 points in 4 days so Que Sera Sera if I have to go back and sell the Mays for what I could have sold them for last Friday.

 

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