October 11th, 2007 at 9:30 am | Permalink edit
Long Puts – I take 30% of my profits and buy puts in whatever seems most ridiculous (RIMM, BIDU, SU, XOM, DIA spikes), mainly I’m getting killed but the 70% of the profits I let ride, rather than cashing out, more than makes up for it. It’s a tough way to go compared to just buying and riding the rally up but I really think we could wake up one morning down 500 points, on the way to down 1,000 in 2 days at any time and for any of the dozens of reasons that currently don’t matter.
October 11th, 2007 at 9:31 am | Permalink edit
Speaking of rides. CROX Nov $70s at $4.90, selling Oct $70s at $2 OR getting out at %4.50 XXX
October 11th, 2007 at 9:46 am | Permalink edit
IRBT – I’d say if they’re not flying along with the markets, that’s a warning sign of sorts.
CROX – that’s the price at which I would sell it, not the current price.
XOM – looking to roll to Nov $95 puts for $1.75 (now $2.05)
October 11th, 2007 at 10:00 am | Permalink edit
Where are the brokers? What kind of rally is this?
GOOG – I’d keep the protection through earnings or at least until his premium is down to $4. You don’t need to protect yourself, you locked in your profits when you sold, you only capped your upside. If it were me, I’d roll him up to 2X the $630s and roll myself up to 2X the $630s but that would cost about $20 per current share so a more revenue neutral roll to keep your eye on is pushing him to Nov $620s when that roll turns even and rolling yourself to the March $620s for $5 per share, which adds 1 month to your spread and moves him into a $22 premium without you giving him any of the $16 you owe him now.
GM – Well let it stop going up. UAW quick settle with Chrysler means they can put labor problems to rest long-term so it’s a bad time to bet against them. I really like the Jan ‘09 $40 puts and that’s where I’m heading as I can sell Nov $37.50 puts for $1.31 (current price) while I wait for sentiment to change on this stock. Even if I get just .50 per month (Nov $35 puts are .65) I will pay off my whole position in 10 months while keeping a $5 spread on my putters so XXX but only on the downturn so you pick up the long on the turn and then sell the closer puts as the mo fizzles out.
October 11th, 2007 at 10:19 am | Permalink edit
All cash – maybe take me to Nobu?
Happy 100 – no it’s still going but Happy hasn’t found that many trades for it, I’m concentrating on the $25KP and the $10KP, the Happy 100 was supposed to be his showcase as a public promo but we’ve been so busy I can certainly understand how it’s hard to focus on it. IMCL is doing very well and HXL made a good comeback. IBM is being IBM, testing the $120 mark today and AMGN is doing fairly well. That’s a decent amount of picks for 3 weeks out of the quarter with $38K put to work.
If you didn’t buy out that IBM caller on my general comment to take out callers yesterday then there’s no point now as they still have $1 in premium and you’re going to have to roll anyway. Better to keep the protection and earn the $1 as it expires.
BTU at irrational levels – I’m going DD on Nov $50 puts at $1.30 XXX
SNDK – sector downgrade but the SOX is holding up at 494, still the weakest index we have though.
FSLR $160s – it suggests people are insane!
Here comes INTC finally.
October 11th, 2007 at 10:35 am | Permalink edit
Draw in crude – bad bad bad!
Rolling SU Jan $95 puts to Nov $100 puts, will then sell Oct $100 puts to pick up premium if it keeps going up.
Not sure that inventory report will sustain these prices but too scary to short as well.
October 11th, 2007 at 11:03 am | Permalink edit
NEM – Good idea Vishal. Let’s sell those NEM Oct $47.50s for .85, it protects our gains and, worst case, we just sell both at the end of next week with another .85 in profits. XXX
October 11th, 2007 at 11:06 am | Permalink edit
BTU – I hope you got more! That was my favorite put of the bunch, coming back now. Don’t forget, if you DD and then you go even or ahead on the new basis, you take 1/2 out on a flinch against you! No way do you want to give up on that recovery!!!
IBM – nice job DM, I take it you didn’t cover. I’m fairly sure IBM will break out but we’ve got to take $2.85 for the $120 caller so XXX to that play in the Happy 100.
October 11th, 2007 at 11:08 am | Permalink edit
INFY looking tasty down here. Nov $55s are a good gamble at $1.20 so let’s get 10 for the $10KP with a $1 stop and 10 for the $25KP as well. XXX
October 11th, 2007 at 11:28 am | Permalink edit
QQQQ – I was very please with my diagonal on them, now rolled a few times but take the $1.13 for the $53 calls against the $3 Jan $53s and we will roll them to $54s once the premium (.35) wears down. That’s 10% in 6 days, pretty good return to start with 33% downside protection. XXX
As a put play you can go with the Jun $54 puts at $3.20 and sell Nov $52 puts, now .60 but hopefully for $1+ on a dip. Little danger in waiting as you can always sell a higher put if it breaks $54 with 8 months to go. XXX
RIMM – I will have such an amazing week if they hit $110!
SYX – Also no point in being greedy, you can sell the Nov $25s for $1.65 if you still have that position. That’s a lot of money and a lot of protection…
“The market can stay irrational longer than you can stay solvent.” – John Maynard Keynes. What was true 100 years ago is certainly true today!
FSLR – selling puts? Playing with fire.
Prez has been the world’s largest buyer of oil since he took office, added over 250Mb to the SPR at a cost to taxpayers of $12Bn which, if evenly spaced, would have caused about a 750K barrel a week draw in crude stocks over and above regular demand. Since the crude market flies on a 1M barrel drawdown, imagine the cumualtive effect of 250 weeks worth of them.
GM – well you know $40 is going to be tough but consolidating up there is not a bearish sign for GM (irrational though it may be).
Betting against big oil – I must emphasise that my plan is to take 30% of my daily profits and bet SOMETHING down. Whether it’s oil or BIDU or RIMM I’m chasing things that can snap back but the focus of the virtual portfolio is bullish (irrationally so!).
HMY – I got like 10/30 yesterday at .15 but I’m not chasing. Looking at the dollar sprialing down the toilet I’m not willing to give up any of my gold positions right now but maybe I’ll give up if they can’t break $10.50.
IBM – the bigger a stock or index is the more it’s going to respect hard numbers like $120 and the more weight you should give to breakouts on those levels. With a large enough sample the basic human tendancy to round things off to even numbers causes things to settle at regular whole intervals.
IRBT – faling $18 is lame.
October 11th, 2007 at 11:45 am | Permalink edit
BA – all covers. This is why we took covers off yesterday afternoon. We should be re-covering into this rally, not waiting for it to correct on us! XXX
October 11th, 2007 at 12:36 pm | Permalink edit
Man those LVS Jan puts hold their value well!
CAKE – if you didn’t sell callls against on Monday then it’s best to just wait for a bounce I think. There is no specific bad news from them, just a sector panic.
FXI over $200! Can BIDU catch Google? To protect that bear put spread it’s best to roll your $210 puts to the Nov $200 puts for $1 and roll your caller up to the $200 puts for $5.45 (+ $3.15), since you sold him for $6.20 and are gaining $4 on this buyback and have $6.20 left, that puts you in for net 10.60. We just have to hope it doesn’t keep going up or we have to roll again! Next stop would be rolling your caller to the Nov $205 puts for $15 and rolling yourself to the Jan 205 puts for $22.50, a pretty even roll and a positive once the premium on the $200 putter wears down a bit and it gains you a month of spread. XXX
BA – love the longs, don’t like selling tight calls but I would take the Oct premiums for now.
IBM – I regret the cover already but spreading the $120s is still a great play with all that premium for the week.
CYNO – I don’t watch that one but all of BTK looks good.
DRYS – Ramana posted trends for Dry Shipping in previous post, the fundies are too strong to bet against them. Unless the global economy cools off, these guys are a buy on the dip play.
CAT – I’m back on the Oct caller – nice premium if nothing else. With the Jan’s you can always roll back to a longer play but you don’t want to risk 70% (I’d roll up to $80s and take some off the table or roll for length).
IRBT – I still like them and we’re ahead on the trade (barely) If they didn’t look so sad I’d DD or roll to the $17.50s but they are just pathetic and I’m giving them a day.
INFY – I hope not but I do really like these guys with IBM etc doing so well.
October 11th, 2007 at 1:28 pm | Permalink edit
BIDU finally falling – I’m in the $360puts now!
October 11th, 2007 at 1:34 pm | Permalink edit
BIDU – nice mo play on 320 puts, now $4.70, stop at $4.25 XXX
October 11th, 2007 at 1:41 pm | Permalink edit
That was a big china dump by soemone. I wonder what the emergency was at 2am in China?
October 11th, 2007 at 1:55 pm | Permalink edit
Condo – who are these people giving this guy $35?
CAT $80s – yes, $1.60 for 6 days, SELLSELLSELL that premium!
October 11th, 2007 at 2:02 pm | Permalink edit
Rolled my BIDU $300 puts to $310 puts for $1.80, tight stops now as I’m way ahead.
October 11th, 2007 at 2:04 pm | Permalink edit
This is fantastic! Rolled my Nov $360 puts to Dec $350 puts and they gave me a $2 credit! XXX if you have that.
October 11th, 2007 at 2:11 pm | Permalink edit
Sorry to go nuts on BIDU but I just made a stunning amount of money…
Next move it to sell the current $330s for $11.50 (no less than $10 but whatever by EOD) then roll myself to the Jan $340s and capture than $10+ premium and roll that caller to Nov puts that are even further down the line. My $310 puts act as protection in case this thing goes back to $250.
Lower rev #s on BIDU – Really? You mean they aren’t worth $350 a share? I AM IN SHOCK! (mock shock but shock nevertheless). Notice the sucker rally that led up to this, this is a great example of how you have to relentlessly short and roll with conviction on these things.
$330 SHOULD make some kind of floor. If not, look out.
October 11th, 2007 at 2:33 pm | Permalink edit
GM – ah but now it breaks down! Like I’ve been saying about this whole rally – house of cards…
Check out BTU!
Nice oil pump into the close.
RIMM – LOL, my other big short hit it’s target!
XOM – I always see a short there, we were in on that from this morning.
FXI – a little late but yes…
CAT covered.
Stops are good!
AAPL down $6 – crazy!
I’m wondering if GOOG is going to pull a BIDU now.
October 11th, 2007 at 2:45 pm | Permalink edit
BXP Nov $105 puts are a DD again at $1.05 XXX NO FILL
FSLR Oct $130s are totally irrational at $7.50
LVS and WYNN haven’t gone down yet. I like the WYNN Dec $155 puts for $11.60, you can sell the Octs $155 puts for $2.60 (but I’ll chance it) and the Novs for $8.95 XXX NO FILL
October 11th, 2007 at 2:58 pm | Permalink edit
Take profits on those puts folks, complacency is bad on either side! If it’s a real downturn, we have 1,000 points to short into…
PTR – good overnight China short. I’d hold that into the weekend. That selling clearly started in Chinese stocks so something might be wrong over there that we don’t know about yet. Since we can sell the current $195 puts for $5.95 and the Nov $595 puts for $12.85 I like the Dec $185 puts at $12.40. If we decide to sell the current $195 puts, that $5.95 is enough for us to roll up to the Dec $195 puts.
VMW – don’t panic – market coming back a bit. Never sell like that unless you can afford to ride out the premium to the bitter end.
China sector heading back down. This may not be over! If BIDU breaks $320 downside, I like the $290 puts as a mo play, probably $5, stop at $4 XXX
October 11th, 2007 at 3:10 pm | Permalink edit
ECB may raise rates – that’s a market killer.
October 11th, 2007 at 3:15 pm | Permalink edit
Pre-Rolling BIDU puts to $280 puts at $3.50 (which means very tight stops on $290 puts), will keep laddering every $5 if it keeps going.
October 11th, 2007 at 3:16 pm | Permalink edit
Oops that was $270 puts of course.
October 11th, 2007 at 3:25 pm | Permalink edit
Condor – ROFL – that’s why we bought out the putter yesterday! If you still have both ends, you have to take it out.
FXI going off a cliff! Don’t get tricked off BIDU puts unless FXI turns.
October 11th, 2007 at 3:44 pm | Permalink edit
Up 120, down 120, whee! It’s like being in China…
INFY – still a bargain tomorrow IF Asia weathers this mess.
Cool day Flim but, like I said, it’s just as bad for shorts to get complacent as longs. If you are up big today as a bear – you need to hedge to the upside – perhaps Nov DIA calls…
October 11th, 2007 at 3:58 pm | Permalink edit
Buying back callers – As we said yesterday, your stops on Oct and Nov callers should be automatic unless you are dealing with deep in the money callers that require special handling. It’s always good not to be greedy, when we get 100 points in a day and it starts to turn, we need to always think about taking whatever profits off the table.
FP – sorry, I’m way behind but I hope you got stopped out by FXI turn. At this point, staying short on FXI and BIDU is speculative. I’m leaving some in of course but it’s only about 25% of my profits (which, with BIDU, is more than I had at the beginning of the day in total!)
Gotta love those silly puts!
HXL – DD at $2 if you can, we can sell calls tomorrow if there’s a good run. NO FILL
