AAPL –
Rule number 1: ALLWAYS sell into the initial excitement
Rule number 2: When in doubt sell half.
Breaking one commandment is forgivable but breking two often brings down the wrath of the markets!
AAPL – May $100s opened at $4.40 and you really should have taken $4 as any profit on a spread needs to be taken off the table ahead of earnings unless you have huge mo. If you’re still holding at $3.40 (puts are .25) then you may as well watch the $100 line and get out even if we lose it or you could DD on the puts and ride the month out but with a spread you need to be thrilled to make 25% – you are lowering your risk by immediately sacrificing what would be a double so a 25% gain on the spread is a 125% gain on one side – expecting better is going to lead to disappointment.
For those of you looking to get out of AAPL on either side, try playing the spikes, we’re probably going to have them in both directions today and I will be looking into working my way into a strangle, starting with an offer of $1.50 on the $100 puts and either getting the $100 calls for the same or grabbing the $105s as a mo play.
TM (5/9) – We took the loss on the $130s on Monday at $1 but now is the time to go for the $125s at $1.50 XXX.
MU – Very greedy to not take at least half at the critical $12 mark – that’s a huge move since our pick. Oops, I stopped out now anyway.
MCD/all other stop questions – Don’t think, set 20% of the profit stops. That means that you take the highest price paid for your contract and, if the price paid goes 20% below that you should sell at least half. 20% below that you should sell antother half or, if you still love it, then buy back some more as you just saved yourself a fortune by not holding that first half too long.
If it turns around on you after you sell your first half and gains another 100%, you will have still given up less than 50% of the maximum possible gain while every 20% down that you take no action costs you a full 20% of your gains while time eats away at your premium.
If you want to be in something for the long haul and ride out the dips – DON’T PLAY OPTIONS WITH LESS THAN A 90-DAY WINDOW!
LOL – EWJ got crushed! Stopped out there too. If we hold up today I will buy them back.
FXI too – if you guys don’t have mattress plays I strongly suggest them.
TSO – I sold the May $115 calls for $5.50 yesterday to some sucker (at least I hope he’s the sucker..)
Will sell the $120 puts for $6.70 if oil turns up (gas inventory out soon). Depends wheich side of $65 we’re on, still $65.36
SNDK may be grossly underestimated so the $45s are a pretty good gamble. I’m no longer happy with my Jan $40 leaps as they are too in the money at $9 so I’m rolling those to the Jan $45s for $6, taking $3 off the table and leaving the puts I sold in place – hopefully I won’t get gapped out…
SU – I don’t know what’s keeping them up! Average production was BTE but they lowered forecasts for the year by 5Kbd ($118M). I’m not complaining, the $80s are a double from yesterday now and the June puts are still $2 so I’m tight stop on the calls and then tight stop on the puts on the turn.
Build in gas 18Bcf – good for SU.
VLO now catching TSO fever!
CME heading back down. NYX $90s for $1.45 as mo play – was $2 yesterday and $4 on Monday XXX
TSO – Even if they hit their number, it only puts them in-line with last year’s earnings and can’t possibly justify this premium to VLO. I still have the June $110 puts from yesterday, holding $3.30 so I’m out of the current $110s if I should be lucky enough to hit $3 but I won’t DD there now.
Plan is still to roll losses to Aug $105 puts (up from $100s) at $3.90, hopefully $3.50 and then sell puts against those for a while.
I also like the spread of the Aug $120 puts for $9.70 and selling the Aug $130 puts for $15.85 – you make money as long as TSO doesn’t finish between $124.15 and $130 and if it looks bad going into July the loss should only be couple of bucks vs. a $6.15 potential gain. XXX
67% of the S&P has beat so far – keep that in mind when you short! Anybody who exports anything is in good shape but domestic companies remain very questionable.
JWN – tough one because earnings are 5/17 but I suppose taking the .70 profit off the table an moving to the Jun $60s for .90 is the best way to hedge this one. To do this you can get out here (since this looks double toppy for the week but always trying to get a little more and buy for a little less) and wait for a dip or buy in at $1 if you have to on a breakout over today’s high. That way you are only risking .30 or less on earnings. XXX
BIDU Flying! We have 3 June $105 calls and sold 2 June $105 calls against them in the $10KP and those $105s have an insane $5 premium. I think they should do as well or better than Google since they get help for a lot less money and aren’t acquisition happy but they may also get the ho-hum Google reception on great earnings.
TSO – LOL you’re right – I was thinking as an upside cover and forgot my downside! I’m watching way too many things if I’m going to start missing things like that! I was thinking about protecting my heavy Aug put position against catastrophe but that does not work as a new play for people other than the uber bullish. Sorry!
Knot waking up. Oct $20s are still $3.90 (same as 4/4 entry + .2)
GRMN (5/2) – $55 puts are $1.30 and TomTom just gave good close of europe results so there should be some panic about price competition and market share for garmin – just a mo trade (.30T)
UNH getting killed here. Taking out May $55 caller for .35 – have to consider selling $50s for $2.90 as a mo play (selling at $2.75 with a .25 stop). Nonetheless, doing a DD on Jan $55s at $4.35 as I just made .65 on my first batch so it’s good cushion and earnings were pretty good with all the weaknesses fixable.
