Very busy covering this morning, selling some AAPL $130s and,of course, taking out my SHLD $175 caller and possibly rolling to the $160 but I want to wait a bit and see if they hold here (I think they will).
I mentioned in the previous post I’ll be accumulating GM puts if they really pop up.
If this is just a mile sell-off that will be amazing but let’s watch our levels very carefully – no reason to be the first ones to panic.
Welcome Dek! Step one is cash out your caller at .20 since your broker probably won’t let you sell 2 at once and you want to have your options open. The .20 isn’t going to break you after killing this poor guy for a couple of bucks. I’m in the same boat as you but with Jan $180s which I will roll down to the $170s for $3.50 and DD there, selling calls on a good run but not too quickly as I expect a bounce here unless the whole market tanks. I also have some worthless Sept $195s (which have very low basis as I sold $170s against them) and I will be selling Aug $160s, now $6.35 against them as a buffer to my leaps in case I’m wrong and it keeps going down. This is essentially a bear call against 1/2 my leap position and can be replicated by taking an Aug $180/$160 spread for a $5.60 credit but you have to have the margin for it. Obviously I’m hoping to sell the $175s for the same price but I’m not going to miss an opportunity if the stock is having trouble at $160.
LOL – so much for selling AAPL calls – hasn’t gone down since I started looking….
Oil recovering fast, gotta take that and run.
FAF (yesterday’s short play) with a great gap down.
XOM Aug $90 calls back at $1.25 and may get a chance to add Aug $85 puts for $1.25 or less today (I still had the Julys but they are cahsed and I will roll into an even spread). XXX
AAPL – Earnings not until 25th, you can roll your caller into the $135s, now $2.62, which carry an insane premium I think they will have trouble getting to over $135 and $140 would be truly crazy. Meanwhile, I’m sure your gains on the leap are taking out some of the sting…
Oil is once again spiking up over $72.50 in completely irrational trading. VLO puts are geetting tempting again at .43. XXX for the truly committed (or those who should be!).
BIDU, VCLK, GOOG – web looking strong. I think there’s an ETF for that but I forgot which.
Brokers having trouble, LEH awful. COF and AXP off on consumers but MA holding up so far. MA Aug $155 puts seem expensive at $6.70 but you can sell $165 puts against them for $11.75 for a bull put spread if things recover and boy could these guys take a tumble so not a bad play if you need to bet on a dead consumer. XXX Also 2:1 ratio spread on 2 July $155 puts at $1.62 against 1 July $160 put at $3.50 for a quick drop, buying the puts first and maybe never needing to sell the other puts.
SLB – I see a seller into every rally. I think costs have exceeded revenue gains for the drillers – as Z points out, labor shortage coupled with any kind of demand slowdown spells doom for these guys.
The amount of money pouring into the oil sector is stunning. Huge volume for 2 days driving them up and up against the market. Hopefully a blow-off top because if they deserve these values then what is going to be left for the rest of the economy?
VLO with a refinery outage, BP with refinery outages…
CVX $90 puts will be tempting under $1 ahead of inventories.
I’m back to buying the XOM Aug $85s as the spread is the only thing I’m comfortable with right now. I’m starting VLO with some Aug $75 puts at $1.50 and hopefully I can get $80 calls for the same a little later. XXX
GM – Aug $35s not too bad at .82. I would DD on those at around .55 as it will be hard for them to go 45 days without someone noticing they are still GM. 
July oil puts – I’m not liking any but I will gamble on CVX $90 puts if it ever stops going up and VLO $75 puts (maybe $80 puts at this rate) and SU $90 puts into inventory tomorrow. If they have a build like last week these guys could all drop 5% in one day but right now we just need to let them run.
Gold kicking back up but the market is placing a big bet on big Ben at 1 – it will be very funny if he says there is a problem but most likely the fix is in.
VOLV taking off (predicted yesterday). Gapped up on us but the Aug $22.50s are just .40, not a bad gamble.
TSO – looks more like blotter to me. I’ve seen this before, might take them a while to come down…
DNA – I still think they get bought. At least they have a pipeline. Short-term, they are likely to lower guidance but that is somewhat baked in at $75. I’m holding 50 Aug $80s naked at .90 and my 20 Jan $85s are covered with July $75s at $2.50, which is really a cover on my Augs.
SHLD goes down and down, rolling to sale of $155s at $4.60 as mo play, premium is huge so I will hold it for a while unless the whole market kicks up.
Europeans are selling off RDS.a, TOT, BP not too strong. Let’s watch this into the close in 20 mins.
NYX with a nice move!
CCJ – you can sell the $55s out of principle for .50 as that’s a $3 premium on the price for 8 trading days. I’m naked on mine but will probably sell the Aug $50s if they drop below $3.50 if they drop that far, that’s perhaps at $51.50 on the stock price. The Augs have a $2 premium, and $2 of intrinsic protection – that’s a lot better than selling the Julys.
mSquare – IBN is finally topping out. Now you have my blessing to try a short! I would rather sell the Aug $50s at $2.95 than buy the puts but you need margin for it. You could bear call them but that takes the fun out of it. July $55s are just .10 and you can sell the $50s for $1.73 for a $1 premium and they have to make $51.60 to hurt you and that’s .30 from the ATH (which was a spike yesterday). XXX
Gold kicking up again because rates are down due to death of housing which just leaves dollars sloshing around with nowhere to go. If nobody wants dollars they get less valuable, which leads to inflation even as the value of your single biggest asset declines. This is a formula for an economic catastrophe, especially since we run this budget on a deficit that dwarfs the entire economy of all but 20 nations. I can’t wait for Uncle Ben to tell me how I shouldn’t be concerned about this…
CMI coming down, FSLR turning down. This is what I said to look out for in the morning, profit taking on the high flyers. Apple may be next, then GOOG, then all hell can break loose. Oil puts looking better to me now.
X is still a good play, nice buying opportunity down here.
NYX up and up and up (finally).
RTP on 8/2 should be interesting. Stock is at $318, down from $327 last week. I like the Aug $280 puts for $3.55 and selling the Aug $350s for $4.95 as they have only moved more that $40 in a month once since May ‘06 and that was this May so I think they’ve had their fun. I suppose you could also do this play as a butterfly with the inside puts and calls but if you have the margin for it, the naked play needs a $46 move to the downside or a $42 move up for you to be out of pocket. XXX if you have the account for it.
Now is the time for TSO puts! $60 puts are $1.15, out by day’s end but I dare them to take them higher!
GOOG – here’s the advantage of buying those puts yesterday. I now get to double dip to the downside by selling the $540s, now $14.10 as a mo play. XXX
QQQQ – still hollding our levels I set in the main post. Watch the S&P to break 1,515 as a get out sign but it’s not looking good. When you do a July this close to expiry you need to keep very tight stops.
OOPs there goes S&P… NYSE broke too. If one of these don’t pop back up it is more likely the Dow or the Nas will join them.
SHLD down 10%.
DNDN making a big move!
DNDN – $7.50s are .60 XXX dangerous mo play.
DNDN Aug $10s are still .35 XXX pure speculation.
MSFT – yest I very brilliantly sold the $30s against my $32.50s that were dead but it’s late for that.
I love this. Dylan just asked a guest isn’t it a bad sign that HD has nothing better to do with capital than buy back their own stock. What hypocrisy! They tout COPs buyback like Prometheus brought fire to them but if a retailer does it it’s a sign of weakness.
No DNDN news, just the weekly nonsense but if you are good and take your dimes when they are offered, then you get a lot of free looks on longer plays – like the Aug $10s and, one of these days, it really won’t stop until it’s back at $12. I wish this stock were different because it would be even more profitable to sell calls to people when this happens but it’s way too dangerous so we just try to scalp a quick dime or two when it pops.
