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Friday Virtual Portfolio Moves

By phil
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Posted August 31, 2007 at 9:30 am | Permalink (Edit)

DIA Mix:

150 OCT 133.00 DIA CALL (DAWJC)
100 OCT 131.00 DIA CALL (DAWJA)
300 OCT 132.00 DIA PUT (DAWVB)
200 SEP 133.00 DIA PUT (DAWUC)
300 SEP 133.00 DIA CALL (DAWIC)
100 OCT 130.00 DIA PUT (DAWVZ)
200 SEP 132.00 DIA PUT (DAWUB)

Dont’ forget the virtual portfolio is very bullish otherwise with few put positions (although lots of covers) and I’m not too worried about the Octobers so it’s more about my 400 Sept puts vs my 300 Sept calls than the 400:250 October mix.

CVX will be a DD and XOM I’m buying the $85 puts as it was a premise oil would go down after the weekend, not today. Again, scaling will save your virtual portfolio!

Posted August 31, 2007 at 9:33 am | Permalink (Edit)

Selling 1/2 Sept DIA calls into the initial excitement (and the Qs) will rebuy to cover on a dip. XXX Selling by the way means setting .10 stops, not just randomly selling!

Posted August 31, 2007 at 9:48 am | Permalink (Edit)

I am so mad that I have to go! Obviously holding 133 is critical but let’s really make sure our lagging indexes stop lagging. At 13,325 I’d start getting concerned that the Dow can’t hold it. The Qs need to get back to $49 to be bullish from here but it’s all about Bush/Bernanke and I hate to lay something out so far in advance but at this point I’d be tightening my puts up (that I am doing) ahead of Ben. If Ben rallies the market, Bush can only add to it so dump the puts then.

If Ben kills the markets, then I would stop out of the calls, mattress the puts and wait for George. If George reverses the decline then just do the reverse (and don’t forget you can mattress up and down).

Gold is shooting up ($684) and the dollar is crumbling as there are few combinations of these two guys talking that will give foreign investors a reason to think we’re not driving this economy straight to the 7th level of Hell with all this idiotic tinkering…

Posted August 31, 2007 at 9:51 am | Permalink (Edit)

XLE is a mo play, XOM I have to start with a 25% buy (100) here as I’m leaving and I really want them. I’m still mad from yesterday and may buy all of Mr. 3000s $85 puts out of spite, now $1.30!

Posted August 31, 2007 at 11:47 am | Permalink (Edit)

Hey guys!

Wheee, that was cool. I guess Bernanke’s plan was to bore us to death with that speech but he got my major points in so I’m happy (and the markets aren’t too unhappy either). We could have done without: “global financial losses have far exceeded even the most pessimistic projections of credit losses on those loans” but I loved: “It is not the responsibility of the Federal Reserve — nor would it be appropriate — to protect lenders and investors from the consequences of their financial decisions.”

On the whole, I’m currently comfortable with my top call earlier and now I’m watching to see if we break out of the upper range of 13,300 to 13,400 the other way. Qs need to break $49 and I would take a turndown very seriously going into the weekend because usually we close a month out at least a little positive.

OIH $180 continues to be a call I will sell those short on the next attempt at $180 (last stoped at $179.70)

XLE diasppointing so far, XOM $85 puts got more expensive despite the stock dropping (always buy the opposite direction into the initial excitement!). I’m offering to take another 100 off Mr. 3000’s hands at $1.40 and then I’ll see how it goes.

This is the critical juncture and I don’t see what’s going to punch us up between now and the close, struggling at 13,350 is not cool.

Posted August 31, 2007 at 12:09 pm | Permalink (Edit)
Favorite Apple play every day is ride my leaps up and roll my caller to the (now) $140s if they hit $7. I killed my close callls yesterday and doubled my main leap.
Now rolling.   AXP is a laggard if we keep going, they are the least exposed of the CC companies and I so doubt they will fall below $55 outside of a major catastrophe (which the government will certainly avoid through the election next year) so the Jan ‘09 $65s are a good deal at $5.55. The current $60s are already $1 and the stock has $2.50 levels, which are great to sell against. XXX
Posted August 31, 2007 at 12:31 pm | Permalink (Edit)

Mattress plays – this is where the mindless following of a simple strategy saves your ass! I’m up to the DIA $135s at $1.90 and gertting ready to cut the $133s loose if they even hint down as $3.20 is a great price. If the $136s hit $1.75 I will cut the $133s regardless and roll to those, getting (I assume) 1/2 off the table. I’m really concerned here at 13,400, especially with the Qs also having trouble at $49 but they might all decide to break out to end the day (and turn the month positive for the funds!

Posted August 31, 2007 at 12:46 pm | Permalink (Edit)

Have fun Peter! A case of Bradors would do me just fine thanks…

This rally does nothing to dampen my enthusiasm for the DIA squeeze but now we need to do the Octobers since the Fed meeting is on the 18th, a little close the the expirations on the 21st for comfort (althought that week should be mega-fun to play the short and deadly game of last minute positions!).

Posted August 31, 2007 at 12:55 pm | Permalink (Edit)

BDC – I love biz plans! Remind me on the weekend.

AAPL and Qs are straining, if Google can’t take out $515 it might be time to cover the downside (and isn’t 200 points plenty for one day?). I’m starting with the Oct $135 puts at $3.85 on the premise that I may as well since they will only drop .45 on another 100-points up and there is NO WAY I don’t want plenty of puts for a retest of 13,500. Plus, I can sell closer puts against it twice due to there being 9/21 and 9/30 expirations on the index puts.

Posted August 31, 2007 at 1:16 pm | Permalink (Edit)

AXP – nope and now that they didn’t break $59 I’m goign to wait to see if they test $58.

DIA puts, there are .25 stop rules on September index puts while the Octobers I just roll up to a tighter level each 100 point (costs about .30 per 100) as above. Effectively, with 50 days to go, I’m always happy to gain $1 in position for .35. This is a logic that should apply to any longer position you believe in, if you have a 2:1 advantage in a roll (strike vs. cost) then it really doesn’t make sense to stay more than one bracket out of the money unless you are employing a specific spread strategy (like I had RIMM Jan $300s just to give me something to sell $240s against).

Mattress plays – by the way, by definition, if you keep rolling your puts or calls at each level then the last rolll you make will be a loser and the second to last will be just about even! As I said yesterday, these are plays we make to scalp dimes and the big win is when I take of my $133s at $3.20 and swith to the $135s at $1.90, I’ve already taken $1.10 off the table so I’m risking 25% of my profits…

Posted August 31, 2007 at 1:57 pm | Permalink (Edit)

XOM – I have no desire to be the next Mr. 3000, I’ll content myself with a 50% entry at $1.35 since it is questionable so far. The OIH $180s were good to sell at $5 but CVX (I have 50 at $1.18) are tricky as they are a little far away for a DD at .80 and it doesn’t really reduce my basis enough to excite me so I’ll probably leave them well enough alone and just be happy to get even.

BX and FIG still in the toilet, interesting that they’re not buying the rally.

Every friggin’ break CNBC says “there is a storm forming in the Atlantic” it’s a 7 MILLION SQARE MILE OCEAN – of course there’s a storm forming in the Atlantic – if there wasn’t this planet would be dead! This is most annoying and blatant media manipulation I’ve ever seen. I’m going picking up the XOM Oct $85 puts at $2.30 here as that really pissed me off…

Posted August 31, 2007 at 2:26 pm | Permalink (Edit)
XOM is my favorite oil put at the moment. I wanted them yesterday at $1.75 but my best friend, Mr. 3,000, wouldn’t let me buy them so I got them today for $1.33 now!
Posted August 31, 2007 at 3:12 pm | Permalink (Edit)

SPX all-time high in 3 weeks? Well let’s say the Fed decides the economy needs emergency aid and lowers rates .5% – who are we jumping into? The guys they are bailing out? The energy sector that’s making us broke? Maybe retail and manufacturing but if so much damage has been done that the Fed needs to step in, I’m not sure I’m going to be buying companies at the ATH, that’s usually a level we buy at when things look good.

To put this into perspective. I’m sure many of you know a home you looked at a couple of years ago that is now 20% cheaper and you still don’t want it. If the Fed cuts half a poitn, will you run out and pay the top of the market price? Why should stocks be treated differently by rational investors?

Oil – yes I’m playing for the long weekend to be a dissapointment but also I think there are too many barrels of oil on order at the NYMEX so I’m willing to roll to October if next week doesn’t work out (and then November). Hopefully I’ll be right before I have more than 3,000 contracts!

FXI – rather than buy puts, which are very expensive, I’m selling calls. This is not for everyone due to margin requirements but they are willing to pay you $5.22 for the $156 calls. That’s $7 over (the magic 5%) the ATH.

DIA – I got out on the rise but rolled some up as well. Going into the weekend still 60/40 bearish as I still have to protect my upside calls.

Posted August 31, 2007 at 3:59 pm | Permalink (Edit)
AAPL, I am 50% hedged and I dumped everything other than my ‘09 and ’10s. I still like the leaps around $150 as it’s hard to imagine you can’t sell enough calls to cover them in 16 or 28 months.
Posted August 31, 2007 at 5:41 pm | Permalink (Edit)
VIX – armeggedon signal on the markets is when the VIX DOESN’T jump up when the market goes down. I think we could get a good early warning signal if we quantified the VIX to Dow reaction (ie. -100 points of Dow = +1.5 points of VIX then 1.45, then 1.4) and watch for the VIXDex ™ to narrow which would indicate a market turn. We’d need to track the abolute VIXDex as well as the 2 directional indicators. I don’t know if it would always work, but I am pretty sure it would work right now.
CY Jan ‘10 $25s at $5.80. Can sell $25s for .85 but I think It will pop. XXX on Monday.

 

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