Almost time for my daily TSO puts… $3.50 is a great price for the $110 puts, at $3 I won’t be able to resist it. $1.50 is my magic number on the $105 puts but let’s watch VLO to hold over $69 and cancel all oil puts for now.
AMZN up 20% – puts are toast but who cares!
AMZN spread – well the June puts will take care of themselves but the May June $45 calls are going to be a pain as we are too far in the money. I’m showing June $45s at $8.80 and May $45s at $8.20 and, if you can afford it (and I said when we set this up you needed to be able to) the proper move is to roll your caller to the $52.50s for $2.10.
Note that we already have a double off the .30 net we invested so this is a brand new gamble but you are effectively buying the June $45 for $6.40 and you have to actively roll your caller down (generally whenever the next level down gets a $1.50 premium) if we start to fall and up (same logic) if we continue to rise which is very tricky to manage.
You can also just take your money on the Junes and play a pullback of your caller as a mo play but he has no premium so you have no cushion but it might make the most sense if the market pulls back (Dow already got rejected).
Posted April 25, 2007 at 10:00 am Permalink (Edit)
SU May $75s? Rather than DD you can roll to the $80s for $1.70 (you don’t have to roll to the same # of contracts) or the June $75s for $1. I’ve got a buy in at $1.50 on the $80s but the damn thing is diving on me already!
AMZN Oct May is much easier as your caller lost his premium and you didn’t. You can roll him to the Jun $52.50s for $3 or the Mays for $2.38, effectively selling another $2+ of premium but, as above, you must stand ready to roll your guy down or up. AMZN seems to still be having a huge short squeeze and this could last a while with 48M shares shorted.
