Wednesday Virtual Portfolio Moves

Posted April 25, 2007 at 9:42 am | Permalink (Edit)

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!

Posted April 25, 2007 at 9:56 am | Permalink (Edit)

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!

Posted April 25, 2007 at 10:06 am | Permalink (Edit)

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.

Posted April 25, 2007 at 10:18 am | Permalink (Edit)

SOX are tanking again so CY will be suspect. If they OR SPWR miss, they will go nowhere. If they both miss, very bad. So since the chance of a market moving beat is 1/4 and since the June $22.50 caller is willing to pay me .90 on my $2.40 holding, I’m going to sell those!

Posted April 25, 2007 at 10:39 am | Permalink (Edit)

Oh well, not much you can do about it though… If VLO holds $69 the puts are in big trouble, even COP perked up so let’s watch oil at $65 and VLO at $69 and TSO at $112 but even HES is coming back now..

Posted April 25, 2007 at 11:17 am | Permalink (Edit)

TSO $110 puts for $2 (Beep beep (that’s my ‘mon back sound). I will happily DD at .1…

SUs are coming in at $1.60 and I don’t want to miss them for a first round..

Posted April 25, 2007 at 12:46 pm | Permalink (Edit)

Dilemma – price is a terrible reason to buy an option! I would have said BA before as that sell-off was just too dumb for words. Maybe SU $75 puts for .35 but that is literally an all or nothing earnings play. I like the T $40s for .45 but I’d feel safer going out a month for .90.

GE $35s are .54 and make a good mo play but a shame you didn’t ask me that yesterday at .35.

TXN Jun $37.50s are just .40 but they just had a nice run so they’re dangerous.

TSO bid – yeah, not worth chasing it when it’s on a tear like this, insane though it may be. They just added $350M in market cap because there was a draw in gasoline based on low refinery utilization. I thought they were a refiner but I guess they milk their gas out of cows or something.

Now I’m thinking about the June $110s for $3.50

Posted April 25, 2007 at 1:11 pm | Permalink (Edit)

AMZN $37.50 puts – no way do you put more money in there, they are NOT coming back. If you have the ability, the best thing to do would be to take the June $60 puts for $5 and sell the $55 puts for $1.50 so you need a finish at $55.50 or lower to get your $1 back and you are even on the new trade up to $56.50. If the stock stays flat you can just close it out or sell the June $55 puts for $2 (maybe $1.50 by then) and reduce your basis to $3. XXX

HAL $32.50s are .50 and might be interesting in a “rising tide lifts all ships” scenario. Earnings for them are tomorrow.

Posted April 25, 2007 at 1:40 pm | Permalink (Edit)

AAPL:

Oct $100s for $7.65 / Jun $95s for $4.85
Oct $95 puts for $7.85 / Jun $95 puts for $4.25

You are in for $15 and only owe your caller/putter moeny at $85 or $105 where you should get about a double on your put or call. Anything in between leaves you in the long position for about $3 on each side and 5 months to pick up a nice move (or sell calls and puts).

PS – you can even bracket the trade with a few June $105 calls and $85 puts for about $1.10 each.

Posted April 25, 2007 at 2:10 pm | Permalink (Edit)

TSO – now you have to factor in that they have made monkeys out of a ton of analysts that downgraded them last month at $95 – it will be very interesting to see how this plays out. My LVS (the prior Moby Dick) experience tells me that the Aug $100 puts at $2.92 is a good place to roll my losses on lower puts since the June $100s can be sold ofor $1.32 but I’m going to wait a bit – maybe we’ll get $120!

Beige Book not so bad:

“Modest or Moderate growth”
Energy prices not passing along in full
Wage gains modest
Manufacturing slow

Not too bad and the Dow likes it!

Posted April 25, 2007 at 2:21 pm | Permalink (Edit)

Now XOM makes a nice spread! June $85 (.48) and $75 puts (.60) for fun and July $80 puts and calls for $5 as a more serious play. There are not many months when XOM doesn’t move up or down $5. Starting with puts, no hurry for calls as they are way up today. XXX

TSO – selling $115s for $5.50 is a good move if you have the position/margin for it! XXX

Posted April 25, 2007 at 3:07 pm | Permalink (Edit)

XXX on those T $40s! VZ just jumped.

Posted April 25, 2007 at 3:11 pm | Permalink (Edit)

XOM – switching to May $80s for $1.55 on the spread – no sense in paying $3 for the Julys when they are already so high. XXX

Posted April 25, 2007 at 3:15 pm | Permalink (Edit)

AKAM $50 puts! Very risky

Posted April 25, 2007 at 3:20 pm | Permalink (Edit)

AKAM – LOL – in at $1.30, getting half out at $2 and I have no idea what is happening!

Seems like earnings were accidentally released early but no confirm.

Posted April 25, 2007 at 3:33 pm | Permalink (Edit)

AKAM – As far as I remember that’s the first time I ever posted an emergency mo trade but I was that sure based on the pattern I saw. Meanwhile done at $2.30 – that was so much fun!

Posted April 25, 2007 at 3:47 pm | Permalink (Edit)

DIA puts – I am losing my appetite for them! STRANGELY my $130 puts are still $1.02 so I will spend .35 to roll to the $131 puts but I will pull the plug earlier tomorrow if it doesn’t work out. It’s baically costing me .35 x 30,000 for each 150 point Dow rise as that is 1/2 of my full protection (I would take the next layer on momentum but now, at $1.35 vs. a $2.15 basis, I may just DD this level rather than ladder down).