CCJ – very good, I was just looking over those! CCJ is not like other commodities as there is an ACTUAL shortage of uranium and my current thinking is that they are just being pinned at $50 for expiration. I have the Jan $60s at $3.60, now $3.30 and I’m going to sell the May $50s for .50 . Even if they go up, it’s just a bonus .50 as I roll my caller to June tomorrow afternoon. XXX
TSO I am out and hoping they get a nice pop into gas inventories so I can get back in.
CCJ – so much for that plan! No one would give me .50 so I guess I’d better sell the June $50s for $2 before this gets ugly but now I have to do that with a $2.50 stop (and treat it like a mo play with a .35 trailing stop.) XXX
I picked up the DNDN Jun $7.50s for .35, just for fun – could be worth nothing or $10 over the next 4 weeks… XXX as a craps roll but I would buy 7 for the $10KP
MEE – that’s a keeper for me as they are fundamentally screwed by this lawsuit. As I said the other day, this is no XOM that can spend $10M a year delaying and appealing until they buy enough judges to get a better ruling. These guys government face fines bigger than their net worth and THEN they will be sued in a class action case. The timing of the case brings them right into a Clinton presidency. One of their best defenses is that some of these violations occurred befroe they owned the mines that were clearly in violation – that’s not very encouraging…
Big test for MEE is the rising 50 dma at $25.60 and below that they should get some kind of bounce off the 200 dma at $24.50 but $27 was the 10% rule and they blew that yesterday as they got rejected there so expect them to get rangy between $27 and $25.50 into expiration and probably a breakdown next week. With the July $25 puts we can afford to run it with a .30 tstop but if you didn’t take advantage of selling the May $25 puts to reduce your basis, you might want to get half out to knock your remaining basis down 40% so the stop makes more sense. XXX
95Bcf build – right in line. 2Bcf miss should give us a nice fake rally and another chance at our TSO and VLO puts but not for the feint of heart!
CCJ – naked selling the may $50s at .50 which I wanted to sell in the first place, stop at .80 and boy will I be pissed if it happens! (this means no stop on my Junes as I can’t afford to stop out both – if it goes bad I’ll just have to roll and roll).
TSL – those Chinese companies terrify me although if you can actually sell the May $55 for $1.40 naked today, why not? Worst case is you end up owning it and sell the insanely priced June $55 for a $5 premium so XXX as long as you have plenty of money to buy the stock and roll your caller if this thing flies up but the plan is to just pocket the premium tomorrow and be done with it. You could also buy the June $60s, sell the May $55s for $1.40 and roll him into the June $55s, now $5.15 at EOD tomorrow but it’s a tricky play…
GOOG – if you are even or ahead on expiration week you should kill the trade, too easy for things to go bad. Having missed my chance to go long on Goog at $460, even though I meant for a week to re-up last month’s plays, I’m not going to sleep on it over the weekend and see where we land as this whole run to $475 could be just pinning up for expiration (as there were very few $460- calls (14K) but 32,000 $460+ puts. Also, if you are going to take Google down, you might want to give it a good goose first so you can dump a ton of June calls on suckers as selling $460s for $21.15 gives me a lot of room to dump out of my position next week.
In the $10KP, I have decided to let myself get called away on the stock position I sold the $470 calls against if we finish above it. XXX
SWN – selling June $45s for $1.50 against leaps in LTP XXX
Nigerian rebels have unions? Who will attack the pipelines? 
AAPL – I sold 1/2 my Apples yesterday as it was too much to leave on the table. That being said I wouldn’t want to be deep in the money as IPhone release in June so my play is going to be Oct $115s for $7.45 (which give me possibly 2 earnings) and sell 1/2 the June $110s for $2.75-$3 and the rest for $4 or better but selling the $105s for no less than $4 if it goes the other way. XXX
BA – thank goodness I only sold 1/2 the June $95 calls! I’ve been waiting for them to go to $100 for ages and I still think they may get a rejection there so my most likely path will be to roll my June $95 caller into 2x June $100 callers as we get close but I’m not going to take out my june caller and leave myself naked on that position as this stock is good for at least one good sell-off per month. My basis on the Jan $100 calls is already negative so all sales are pure profit so it’s really only a question of how many rolls I do before I cash in. I’m also considering rolling my Jan $100s to Jan $110s once we break over but let’s get there and hold it first!
SWN Sept $45s – that was a 3/4 sell but they got stopped yesterday at $3.20 (up from $2.70).
Once BA breaks $100 it’s going to be time for Boeing Buddies TIE, ATI, AIR and BEAV again.
TSO and VLO getting close to our buy prices: TSO Aug $110s at $4.90 worked well and June $115s are attractive at $4 but may be a DD/roll play. VLO Jun $72.50 puts were $1.90 when we picked them up last time and were sold for $3.25 yesterday so I’m grabbing them any moment as I expect a rejection at $73.50. XXX
Exchanges – all rumors during expiration week should be ignored (or bet against). NYX must by ICE or something like it down the road, they need the commodities to be a real global force and they need to be a real global force to justify what they’ve already spent.
SU – so you guys just don’t believe in stops? I’m going to be jumping on the Sept $75 puts at $1.40ish so you may be better off rolling there than DD if you have the margin to sell against your position. XXX
POT – that does it, I’m putting a lid on these stoners! Taking the $210 puts for $4.50 with a $1 tstop as a mo play. XXX but risky.
Wow, remember when YHOO was at $33? Just 2 weeks ago. Since then no gain has not totally erased the very next day… The 200 dma at $28 is back where we started and I’m thinking of going long there as they are a very juicy $40Bn acquisition for someone.
Wow, COP took down 69Kbd and the crack spread hit $37 a barrel, that’s a 58% mark-up on a barrel and close to 4 times the old standard spread of $10 (even if a barrel was $40 then it was 25%). How this is not considered price gouging just baffles me.
Meanwhile whatever is up at ADBE caused me to buy $42.50s for .40 but I’m just hoping to get to .60.
Speaking of Water (I think that was last night), WTR is on the move today. I thought they were pinning $22 but they suddenly popped. I’m going to take some Dec $22.50s at $1.50 and sell the Jun $22.50s at .50 if I can. XXX
COP – that’s a question near and dear to my heart as I have them too. I sold half at $1.50 yesterday and have 50 left so it’s DD for me here at .75 XXX
ADBE $42.50s back in at .30 and I still don’t know why, this time I’m out at .45.
NYT – we are sitting on Jun $25 puts for $1.30, now $1.12 and we’ll be in good shape if they fall through $24.25 with real support at $23.75 so at least 1/2 out there.
UNH still doing well.
USO Jun $49 puts for $1 if I can get them. Just testing the waters here but there’s still that contract rollover to contend with. Taking USO $50s for .15 as a mo play for fun.
Posted May 17, 2007 at 1:29 pm Permalink (Edit)
HAL rockin’ and rollin’
NMX – that was a good entry point yesterday. All exchanges moving suddenly.
CHK $32.50 puts were a stop out yesterday but I like playing them for a bounce off $35 but the June $35 puts are .90 so you are buying yourself $2.50 in positiion for .70 so that’s the way I’ going XXX
VLO – no I’m running a .25 trailing stop but I will buy by eod. Same for TSO and SU but it seems like madness to short these guys right now.
Welcome Rajee! Very important that you read strategy section as well as at least 2 weeks of posts and comments so you can get up to speed – makes for a fun weekend! Hopefully those are the June $70 COP puts you are talking about and those are not a momentum play and our next real decision (after a DD at .75 brings the bases to .90) is at about .50 where I am likely to DD again as I think there will be a correction after memorial day weekend but the risk is that we will set some kind of demand record.
DNDN – they just hit .50 which is half out for anyone but the most greedy traders and the rest (basis .20) I’m happy to gamble and see what happens. As a general rule of thumb – once you make 20% on a trade you should be setting a trailing stop at 20% of the profits but with a .35 option that is silly so the way to go is to take 1/2 off when you make .15 and set a stop at .25 (.25 tsop) so you can’t lose on the trade. All this is unless you have something particular you are targeting or some event you are waiting for but my general goal in day trades is to make 20% on some, lose 20% on others and every once in a while get a nice double.
MOT – that was not a day trade but since we hoped to make 50% (and that is the most you should ever hope to make or your expectations will kill you) and it’s already up more than 50% then not taking half at $1 is just greedy and dangerous.
SBUX – someone needs to show me where they had some catastrophic failure of their business model. They’ve been in-line for the past 3 qtrs but that’s in-line for 20% growth and they are a major importer forced to use weak dollars to buy coffee and milk and 85% of their customers pay them in the same crappy currency. They are trading at their ‘04 high when earnings were $400M while last Q was $200M. They have 12,000 stores vs 31,000 McDonalds but you might be surprised to know that MCD has better margins (because on the whole, selling Coke is a better scam than selling coffee). Still MCD is your best comp and they are busting the ATH every day in this rally and if they don’t collapse then SBUX should rubber band at least to the low $30s (they were $40 last fall).
VLO – this is my spot yes. I have the June $72.50 puts for $2 avg and the June $70 puts at $1.10 as a pre-roll (ie, the second I make $1.10 on the $72.50s I take it off the table for a free ride on the $70s).
TSO won’t cut me a break so I’m in for $4.20 so far on the Jun $115 puts.
SU Jun $85 puts at $2 still seem expensive so just a few so far.
SUN Jun $70 puts for .80 are also good for a fun play.
I couldn’t decide which service company was more overbought so I’m going with OIH July $160 puts at $4
CROX – I wouldn’t short them as I finally understand their business. They don’t really “make” shoes, they inject plastic into a mold and people put it on their feet. That’s a huge difference in both profitability and expansion potential. The MVL deal is step one for them but I bet you’ll see custom shoe stores in malls from these guys in the future.
MOT – they are on a roll and now the market is turning positive (despite oil up $2) so how can you play the bear on anything? I’m taking oil puts in lieu of cashing out everything I have even though I really think that would be the smarter move but how can you fight this insane rally.
Per previous post – I am still waiting on triggering more oil puts as everything just broke up while I was trying to buy it.
ACLS – I talked about them last week. They are a good co but AMAT couldn’t catch a break from earnings that were good and ACLS did not have good earnings or outlook. While the sell-off may be overdone, I don’t want to be the guy who tries to save this stock.
GE – there is pretty much never a time I won’t take a chance on these guys but I think at this point I’m going to DD Jun $37.50s at .25 to 100 but sell 50 Sept $37.50s for $1 which will pay for those calls (I have 50 Jan $37.50s) and I should be well protected against an up move and in good shape for a down move to (flat is my enemy here).
That’s it for oil I think, I’m locking it down here, happy to DD if I’m wrong. XXX
DNDN (looks real but nothing on the wires): http://seattlepi.nwsource.com/business/316158_dendreon17ww.html
SBUX – there are 3 times more McDonald’s than SBUX. It costs 1/3 as much to open a SBUX as a MCD. SBUX generates $650K per store in revenues and $47,000 per store in net profits (this seems low because of their very rapid expansion of 3,000 stores a year). MCD generates $696K per store and 114K in profits (again, far less building costs) so if we extrapolate SBUX our 5 years and assume the $500M they are spending per year on building remains constant, that number will drop from 1/2 of their profits to 1/3 of their profits and the comany will bring in a net of $900M with 17,000 stores or $52,000 per store net (ignoring inflation etc.). Current market cap is $21Bn with a p/e of 36 but even with a p/e of 25, if they maintain growth at 22% per year they are worth at least $30 right now, arguably $35. I have a position in them now but should they actually go down to $23 I can assure you my daughters will have a good portion of their college accounts transferred to that stock!
GOOG $470s – I would have sold the $470s today while they had some premium you can’t get too badly burned, just caps your gains if they spike. With a 50% gain and nothing to sell I would keep a ready trigger finger on selling the $460s on any downward momentum (as it should hurt them more than it hurts you) and do my best to time it out that way or just take my original off the table and set a $3 (25%) Tstop on my profits. The reason for this is that you are only up $4 and setting a $1 Tstop on Google is pointless. A $3 stop is pretty pointless too as it does that most days so I guess I would either use it to daytrade the $460s (but that can get annoying) or get out the second it popped below $470 – EVEN THOUGH I THINK IT’S GOING TO $480+
JWN – I have an Oct/June spread from yesterday. As I expected it’s a small beat which should kill my poor June $55 caller (I could have been more aggressive and sold $50s) but also good enough to make me comfortable with my very cheap Oct $60s. They guided Q2 lower but raised 2007 guidance so expect some churn tomorrow.
WYNN – If you sold the May 95s you should be just a little bit ahead and my assumption is that the stock is being pinned here and may go again next week. I’m still on my caller as he still has .75 in premium and I’m not giving that up lightly.
YHOO – my suggestion to those with Oct $35s is a 4 step program:
S – Set Stops
T – This means you
O – Oh, you thought I meant him, no – I mean YOU
P – PLEASE!!!
A stop doesn’t mean you have to get out of a trade but it does mean at a certain point you have to either cover or roll. Oct $35s are down to .70 from $1 on Monday and $2.50 during the MSFT madness. The reason I dumped out of mine was becasue it was too far out of the money to sell against and the stock didn’t look worth spending $1.30 to roll to the $30s.
Since you are down .30 with 5 months to go and we know at $33 you get $2.50 for the Octobers I like buying an equal number of July $32.50s for .60 and selling the Jun $27.50s for $1.70 but I would wait until next week to sell on the hopes this is a pin (notice the late rally on Weds that got crushed at today’s open). You are risking perhaps an extra .30 on a steep loss in the Julys and maybe another .20 on your Octobers (if the stock goes down $1) but that’s cheaper than a DD and if the stock recovers next week you will be very happy and, if not, you can pick up a .70 premium selling the June calls and, with your double position, you should not suffer much in a run-up. At the end of June you have your .70 plus whatever is left in July and hopefully you’ll be in a good spot to roll from there. XXX if you have these things.
NBR – part of a DD strategy is to sell half once you get even! You’re in the money so selling Jun $35s for $1.10 in premium against your $4.30 position is great to do but you might want to do it more like a stop and say, sell it for no less than $1.50 with a .50 trailing stop as this run-up may continue. There is also the rule – when in doubt, sell half to fall back on…
DNDN – the assumption is that “THEY” want to make as many options as possible expire worthless so we look for a price, called “Max Pain” that would cause that to happen.
Day trade – I usually say as a mo play but during expiration week I do tend to assume its obvious that I’m not taking a May contract as a long-term investment.
CCJ – nothing, but only because I wasn’t watching becuase I probably would have killed it on that run! I still think they pin $50 and .50 is a pretty good buffer either way, has to go $50.75 for me to lose a quarter.
IBN – if GS is the underwriter anything can happen! YHOO should hire them.
YHOO – to be clear you are only selling calls against 1/2 your total posiiton and they are paying you $1.70 with a $2.50 gap between their calls and your Julys so in a buyout you would still get everything but .80 of the buy price from your Oct Calls (which you would sell into the initial excitement or I will hunt you down and kill you) which should, in a worst upside case, get you out at least even. On the downside, you may wipe out your .60 calls but you gain $1.70 against the sold June calls which covers your net on the Octobers plus the new calls and whatever is left on your 2 positions is profit.
