Friday Virtual Portfolio Moves

Expiration Day Game Plan

$10KP – This is the end of this $10KP, we start a new one on Monday, open positions will go to the STP with the exception of DNDN which will go to my stock virtual portfolio.

The STP and LTP moves are assuming a flat market.  If we have some insane rally I may be more inclined to just raise my DIA protects to $134 or $135 puts but in a drop I will continue to use 20% of profit stops to cut back positions.  Positions not mentioned are not changing.  Obviously I will try to get a little more or pay a little less for each position but these are the numbers I see right now (6am):

STP

• AUY – DD on Jan ‘09 $15s at $2.90
• BBY – sell Jun $57.50s for $1.30
• BIDU – cutting it close on $130 caller, since I will roll not too worried about a run so unless there’s a big move I will ride him out.
• CCJ – I still think it’s pinned
• COP/Other oil puts – I am hoping for a big drop after the holiday weekend so I’m inclined to DD when I get to 1/2
• CSCO – DD at .22
• DIA June $134 puts – I find it very strange that these have not lost more value.  I’m inclined to stop out on mo at $1.25 and try to buy $135 puts at the top (maybe $1.50 or less)
• DNA – waiting for a comeback to sell (I hope)
• FIZ – buying Oct $15 for $1.35
• IGW DD at .55
• MRVL – sell June $17.50s into excitement (if any)
• OSK – cutting it close
• QCOM – right on the money
• RIMM – spending $1 to move to June $145 put
• SHLD – selling June $180s for $5 against June $190s ($2, now $1.50) but protected by Sept $195s and Jan $200s (earnings on 5/31)
• SNE – pinned?  Buying a few more June $55s at $1.40
•  TM – possible roll down to $120 putter?
•  TSO – very strange Aug $110 put did not lose money yesterday.  Might scalp quick sell of $115 puts if we get a good dip and the premium is > $1
• VIX – selling June $17s for .65
• WFR – spending $2 to move to Jan $60s, selling June $60s for $2.95
• WYNN – need to watch May $95 caller closely
• XOM – might make mo play out of selling $85 puts if it goes higher (I have dead $75 puts)

 LTP

• AIG – very unhappy with premiums on short calls – considering killing leaps
• CAT – rolling Jan ‘09 $60s to Jan ‘09 $75s and selling 1/2 June $75s for $2
• CC selling 1/2 July $15s for $1.45
• COF selling 1/2 June $75s for $3.50 (notice I am in doubt so I’m selling 1/2)
• FXI – must take out May $114 caller – will roll if we close down but not up
• GDX – selling June $40s for .65
• GE – Plastics!
• KO – rolling 10 May $50 at $2.20 caller to July $52.50s at $1.40
• MOT – selling June $19s for .55
• MTU – DD at .50
• PGR – taking out May $20s but waiting for a bounce
• TXN – rolling Jan ‘09 $30s at $7.90 to Jan ‘09 $40s at $4 and selling June $37.50s for .45
• UNH – selling Jun $55s for $1
• USG – selling June $50 for $1.15
• XOM – forgot I had so many leaps, definately will try to mo play $85 puts on a run (should have done this yesterday!).

Google Virtual Portfolio

• Letting my stock get called away (tying up too much cash)
• May put spread will die with a .50 profit
• That just leaves Jun $500 and Sept $510s, might sell $490s on a run up but have to be > $10

Mich consumer sentiment is 88.7, better than expected, market has no excuse to pull back so I’m going bearish (selling my covers, tight stops etc.) on a light pullback here (1/2 of today’s gains).

FXI trading down because China bank news came after their markets closed. Also Asian super-Billionaire called markets there a bubble so sounds like a coordinated effort to take the market down over there so, again, do not trust this rally over the weekend – worst comes to worse you’ll miss 100 points on Monday and get to laugh at me….

Remember, if your calls finish in the money you must buy the stock at the strike next week, no matter what the stock does. So if I’m totally evil and controlling the market and I want to dump my hyper-inflated stocks I would jam them as high as possible into expiration pushing a lot of callers into the money, forcing shorts to cover and allowing me to sell June calls against my shares, which I will dump next week with abandon while all the suckers are forced to buy them. This will certainly wipe out my callers (perhaps I would pick up some puts too!).

MSFT Jun $30 calls for .33??? I’ll take 100,000 contracts M! Unaware of your special discount, I grabbed a few Oct $32.50s for .90 but I’m waiting to see what happens.

SWN – can’t short this chart, just have to deal with the gains. When in doubt, sell half of course.

NEM – I like GG and ABX better. ABX looks pinned and India could erupt in riots over the weekend so I like the ABX Oct $32.50s at $1.30 XXX That takes you into wedding season in Asia plus another earnings.

GE – If you DD’d then you absolutely have to get half out otherwise you are risking too much. I expected them to do better than $37.50, which is why I couldn’t bring myself to sell those calls against my Jan $37.50s but at $1 I would certainly turn around and sell them against the leaps.

VCLK, never had momentum to buy. Make sure they hold $30.

Check out YHOO finally.

MSFT – not really in a hurry to sell against unless we get a real turndown (but I will stop out with a 25% loss) but I do like to have the option open!

JNJ – Warren Buffett thinks so but I sold the June $65s against my leaps as I think they are still weighed down by stent problems. I’d really like to see them either get out of that business or take control and make some radical design changes.

Feels like everyone is waiting for everyone else to buy up here. What the market really needs is for Goog to take the lead again, a nice 15-point pop would scare the crap out of all tech shorters..

SHFL – good timing Dday!

INTC caught a MER upgrade.

Exchanges trading down, nice break for me with my ICE caller.

BA fighter jet problem is immaterial but they are using it to take stock down.

WYNN continues to suck.

HAL and SLB turning down, GSF topping. OIH June $165 puts for $3.25, stop at $4 XXX

QQQQ puts – good weekend protection but I wouldn’t toss more money in unless another index crashes (or APPL, GOOG…)

CME – pinning $520 makes sense so you’d be playing for a very small spike and fighting the clock.

SEPR – good catch Dragon, what a disaster that is. May as well grab the $45 puts for .45 XXX

Posted May 18, 2007 at 11:37 am | Permalink (Edit)

JWN – that was a free trade now that my caller is gone so I left them but I have Oct $60s so I’m just hoping for a nice market rally at some point. CCJ I’m trying to sell them for .10 but I’ve got a stop at .30 now. EBAY – I hope they are pinning but $35 is getting far away!

BSX is moving – now we know it’s a buy program!

UPS – not with oil at $65

S&P – LOL, let’s break 1,520 first but yes, we can expect fireworks if it keeps going.

Digital displays will all be made by OLED one day (but that day may be next decade).

SBUX moving – now I know something’s wrong!

SEPR – don’t be too greedy! $44 may hold and makes a good spot to take half off.

VCLK – no way I’m paying $2.32 for the $30s, when I said that they were .75 pre market and I was thinking a buck… Just a stay away now unless we can find a good math play.

SHFL – we need to watch them more closely!

SEPR – gotta take a buck for half – that was a scary bounce! Stop .70 (.30 trail) on rest.

ELN flying, massively shorted buying $17.50s for .05 XXX

IBN – oh I forgot about them! Selling June $45s for $3.50 as I don’t want to leave them unprotected after India bomb news. Nice $1 premium and more than 50% downside protection on my leaps.
XXX

HGSI – really on the cusp of something but has been a huge disappointment. I’d go Jan ‘09 $12.50 for $1.80 and just forget about them, maybe sell 1/2 Jun $10s when they get to a dollar so you have a return while you wait for something to pop.

ELN – theres nothing careful about spending a nickel on that call – it’s an all or nothing play but whatever it was seemed to have fizzled.

SEPR done at $1 buy what a play! And Dragon called it way early – Mega Kudos!

JWN – oh sorry, I don’t usually stop out covers until they get within 2 weeks or if I get more than 66% ahead. As long as I feel that his premium is going to decay more than mine and unless I want to go uncovered or roll, I have no reason to move him.

Oil pump – I’ve been totally wrong but I’m not seeing how they can close at $65 with the barrel overhang they have on the June contracts. I do see massive trading volume at NYMEX but I can’t see the totals yet.

SEPR – $40 is possible but $45 wiped out all callers and there are a ton of puts in the money now so it’s a hard $5 to add. $42.50 puts are “just” .15 but I can’t justify risking 1/4 of my gains on it. Had I been smarter I would have taken them as a pre-roll which would have made it easier for me to sell the $45 puts at the top.

EBAY – $32.50 puts the last 7,000 callers out of the money but I would have thought $33.50 was going to be better because there are a lot of $35 putters (14K).

TSO – have to take the $120 puts for $1 but that’s just my Ahab nature…

DJI/oz – could just mean that gold is underpriced, which is is if the Dow is, as I have said, simply another inflated commodity. There are oceans of money in the world and people will buy anything that is rare and, in an odd sort of way, the certificate of ownership of a corporation is a finite commodity that is desired by many people due to it’s percieved value and expectation of appreciation over time.

Wow, it looks like the shorts just went home at lunch – almost nothing is going down! We may get an S&P record if this keeps up but we also may get the hammer dropped after lunch. I still think that Goog needs to lead us to the promised land.

FDX around here, not more than $107 but if oil stays over $65 I doubt FDX will be breaking out. His premium is dead so now it’s really like a .25 trailing stop mo play on the $105s.

UA – I’ve always dismissed them as a Cramer stock but there might be some real value there. The 200 dma is right here at 45.50 so this is a critical spot for them but they need a catalyst to really get going. I like the Oct $50s at $3.15 and you can sell the Jun $45s for $2.50 if they have trouble breaking the 200 dma.

SBUX – I wrote this yesterday, they simply benefit from a strong dollar as they buy commodities (coffee, milk, sugar, paper).

NYX is a great LTP so I’ll endorse the Jan ‘09 $95s for $13.85 and we can wait to sell calls, hopefully the June $95s for more than $1 but the June $90s for $1 if we have to. XXX

Russell – that’s what we’ve been waiting for. If we can wake up the SOX and the Transports like that I may just have to dump my covers!

SHLD – I sold 1/2 the 180s more for a weekend cover than an earnings cover. We have until after Memorial day to make the next decision.

TSO – these oil puts are just some hedge against a very bullish virtual portfolio in case anyone happens to notice that the world isn’t using more oil than they produce or something obvious like that. Sadly, no one seems to notice anything is wrong with anything in this market and it will be a bears paradise IF it ever turns down.

7 more S&P points and I think you will actually see some short funds implode. I’d feel better about the rally if someone could help me understand how the concept of core CPI can still be valid after 4 consecutive years of rising energy prices or what the heck is wrong with casino stocks all of a sudden.

Solar and alt energy companies are having a rough day and that makes no sense with oil at $65 and I see UTX rolling over, which I don’t like. LEN looks ripe for a fall too but what the heck are they doing at $44 anyway? What did LEH do wrong or are they the canary in the Broker mine? LLL is tanking and RIMM just looks like it might make me happy I bumped my puts – each by themselves no big deal but it gives me a “something’s rotten in Denmark” sort of feeling.

Of course it’s expiration day so you can’t read too much into things….

ADBE – you’re right, greedy not to at least cover into the weekend after a $2 run. June $42.50s are $2.28, which is a $1.35 premium, nice against our $3.40 leap. XXX

SWN – if Z is half out I am all out as I’m pretty anti oil anyway (and look, there goes $65!). XXX

TSO – LOL, you’d better cover or you own em! $118.50 is the magic number – if they fail that I think $117 is a reasonable expectation but the time decay is a huge factor. $119 on the upside means we need to be ready to bail.

GOOG is the king of the last second moves but I should really just sell each side into expiration as much more often than not everybody expires worthless. I’m going to take the puts for .22 and buy the calls if they dip down just in case there’s a pop at the close but, much more likely than not I would be better off lighting a cigar with a couple of $100 bills.

SEPR, maybe if they fail $46 but the play isn’t the same because it’s a long way to $45 and we’ve lost momentum and velocity that made the $45 puts a good play earlier. The day’s volatility has driven up the price of the June $45s to $1.70 so that’s not a good deal either.

LEH – looks like someone is working hard to hold $72 but I don’t see any particular reason they should be treated worse than the other brokers so the June $75s at $1.25 seem like a good gamble. XXX

LOW – LOL – no I had the May $32.50s and I can’t believe I got .20 for them! It was just a fun play, nothing to do with thinking they were a great bargain although I do think they are reasonable at this price.

MNST – fun takeover rumor play but a lot of that is baked in. Chart looks good and everything will look cheap if we continue this rally next week.

MNST – I have no opinion on them. They make a very viable buy candidate but I wouldn’t hold them with a 187 p/e (I’m funny that way).

I’m wondering if copper cos are being held up into expiration. Too scary to short but flying in the face of fundamentals at these prices.

Getting a real laggards rally, lots of stuff coming back from the dead – very strong sign!

STX taking off – I mean come on, it’s like someones going through my virtual portfolio and buying everything that hasn’t been working! Even FIZ is finding buyers.

Rates are kicking up again. FDX is going the wrong way. UPS too so I guess it’s one of those rallies where everyone is selling stuff but nothing is getting shipped…

Don’t forget Asia still wakes up to bad news on Monday no matter what we close at. Oil, of course, managed to get a pump at the close but there are still 100M barrels set for delivery into Monday’s close but perhaps the contract doesn’t close ’till tuesday otherwise this makes no sense. No barrels were added to July though so people just ate 33,000 contracts today.

Builders are falling and IRBT is going nuts, no time to find out why I am buying the june $15s for $1 XXX

BA now going down. The party is over for today!

Asia – as I said earlier, China announced a rate hike after the Friday market close over there. They are also raising the float on the Yuan, bad for exporters (although really, where are you going to go that’s cheaper) and the price of oil is a big deal for them as well and the richest man in China said the market looks like a bubble. Other than that, we only have to worry that the Indian Muslims may not be happy about 3 bombs being placed in a mosque that holds 10,000 people right in the middle of Friday prayers – last time Hindus and Muslims had a big tussel in India 3,000 people died…

It does look like evey attempt to sell something is met by buyers though – totally amazing.

FXI – changed my mind and I am going to cover by selling June $115s at $4.20, not worth not doing. XXX

TSO – hasn’t hit .75 yest and I just got $1.60 from some nut job on that last spike so I’m pretty happy here but if I were smart I’d kill this trade at $1.15. XXX (if you’re smarter than me).

T going down – Come on!

YHOO over 4%

UNG falling apart?

GOOG – this is all you need to know if you ever wonder if markets are manipulated. This stock goes up and down a dollar or two every 5 minutes, every single day EXCEPT expiration day where it magically runs into a band where it doesn’t move more than .50 for 4 hours. Coincidence? Nope…

BSC moving down.

SOX having trouble holding 490. S&P blew 1,520.

DWA is zooming up so someone likes that Shreck idea.

Madness – that’s all I have to say about this stuff… Art Cashin on CNBC feels the same way and he’s very smart.

SOX back over 490, S&P back over 1,520 – everyone holding levels with 30 mins left.

OK, now the bears have to throw in the towel – XMSR is moving up!

SNDK getting bids – starting to look like a massive buy program picking up everything that hasn’t moved yet.

INFY – they’re probably just worried about the mosque thing too – makes the June $50s an interesting gamble.