October 23rd, 2007 at 9:45 am | Permalink edit
I’ve rolled 1/2 my apples back to April, rolled callers up to Nov $185s and $180s so far. Plan is to roll them to a lower Dec once the premium wears down but I may roll my other Jans to 2x Decembers $180s (current target) and then double up my callers at the same price to grab that premium.
October 23rd, 2007 at 10:02 am | Permalink edit
OXPS – Very nice numbers, poor reaction so far but got .70 for 1/2 at the open! Now it’s a free ride.
AAPL – ALWAYS sell into the initial excitement. The number of times you regret it will never equal the number of times you’ll be glad you did! I rolled my $165 callers to $185 callers for $15.35, how is that ever a bad deal? Then I rolled my Jan $165s to Apr $175s for $1, also not a bad trade and it protects me from a drop while my caller takes the hit.
LVLT – big loss and cut forecasts. I still like them long-term.
October 23rd, 2007 at 10:08 am | Permalink edit
GOOG $666!
DRYS uncovered – ouch! I only entered the trade BECAUSE we could cover, not covering kind of defeats the purpose.. At this point I’d roll them to the $125 puts for $11.80 (+ $2.50) and hopefully you’ll get your pullback. If you have to spend $2.50 to roll again, that would be the time to DD (assuming it’s less than 10 day’s from now). XXX on the roll, even if you did cover!
October 23rd, 2007 at 10:16 am | Permalink edit
DIA – I missed my put entry yesterday and I will buy something ahead of tomorrow’s uncertainty but I’m not betting against a 140-point gain today.
October 23rd, 2007 at 10:39 am | Permalink edit
T, OXPS, EVERYBODY – cash, cash, CASH! We are very lucky to be able to get out of calls after Friday’s sell off. 13,650 is no reason to push your luck. Notice we stopped right at 2,775 on the Nas and 1,515 on the S&P, if we don’t break these levels on today’s news then what news are you expecting that will get us to 14,000???
October 23rd, 2007 at 10:43 am | Permalink edit
Oil plays. I’m loving the SU Dec $105s as well as the current $100 puts (I have a spread of the 2 and the current puts are a major souce of account stress). The COP calls stopped out which means the XOM $90 puts are proably a good play right now. I’m thinking of getting back into the BTU $50 puts if they come down a little more, they were very good to us yesterday. xxx
HXL – as expected but I have no tlerance for a dip after that stressful ownership. If you have the Jans, this is a good time to sell the current $22.50s for $1.25 XXX
October 23rd, 2007 at 10:52 am | Permalink edit
DRYS now a $125/$115 put spread. Will stop out putter if DRYS breaks below $123.50 but will sell him again if it doesn’t break $120. XXX My slightly bearish premise is based on the possible global slowdown and pricing blowback from customers, whose earnings are now being impacted by shipping costs. Something has to give in that equation, either DRYS lowers prices and takes a hit or the customers eat the increase and produce poor earnings and guidance or they pass it on to their clients and cause inflation which will hurt everyones earnings and guidance. Many bad outcomes, not too many good so I take the bet (as I am being given good odds since no one else seems to see it that way).
CSCO – IF the rally is real, they are a great deal. IF, IF, IF.
GSK big turndown. Out of the uncovered part of that play. XXX
October 23rd, 2007 at 11:02 am | Permalink edit
Transports are leading this party as oil falls to $85 (which is a bigger fall than it seems as we’ve rolled to December and backwardation is holding up).
LVS murdered? I have the Dec $125 calls at $13.33 against the Nov $120s at $12.68 and currently the $6,000 posiiton is down $400. If that kind of fluctuation (6.5%) is uncomfortable for you then you should not play spreads as they go up AND down 20% regularly. The trick is to take the 20% and be happy when it’s offered…
Tide turning, time to take a stab at the DIA $135s at $2.10 XXX
October 23rd, 2007 at 11:04 am | Permalink edit
Homebuilders dropping. Possibly whatever magic thing they thought was going to happen yesterday, when they went up 7.5%, is not going to happen.
October 23rd, 2007 at 11:05 am | Permalink edit
BA – sadly I must sell $95 calls for $3, the premium is too good to turn down and the market is too shakey. XXX
October 23rd, 2007 at 11:07 am | Permalink edit
AAPL roll at the open. Well I didn’t know it wasn’t going to keep going up, where I could have done another roll for another $5. Having that option was worth the $1 I could have saved (and I only rolled 1/2 so it’s .50).
DRYS – kill the putter!
October 23rd, 2007 at 12:00 pm | Permalink edit
INFY – hoping for a turnaround in India. I like them as long as IBM stays positive.
MTB – that DD is a shot in the dark on a random bailout but I do like them in general.
OXPS – that’s why the rule is “always” and not “sometimes” sell into the initial excitement and that’s why rule #2 (for people who don’t understand the concept of always) is “when in doubt, sell half.” I’d always rather be 1/2 wrong with an early cash out than all wrong with a worthless position but that’s just me… Anyway, if you’re still in it you may as well wait a bit but not too long because if it can’t break $27.50 the premiums will drop fast.
AMZN current butterfly:
Buy @ $2.40 $110s
Sell @ $5 $100s (credit $2.60)
Buy @ $4.40 $90 puts
Sell @ $9.70 $100 puts (credit $5.30)
That’s a $7.90 collection with a $2.10 risk, the closer to $100 the better of course. You make money between $92.10 and $107.90. They look like they’re flatlining here so there’s no great way to enter it but just try bidding .20 less for each leg and cut your risk down.
You can even hedge that position with:
Buy at $7.10 $95 calls
Sell @ $9.45 $90 calls (credit $2.35)
Buy @$2.59 $85 puts
Sell @ $4.25 $90 puts (credit $1.66)
This one puts $4.01 in your pocket and risks .99 but pays you between $85.99 and $95 with a sweet spot at $90 so it’s downside protection on the first play with only .99 of risk.
If it breaks over $107 or under $86 you lose both legs but otherwise it’s a fun spread.
October 23rd, 2007 at 12:12 pm | Permalink edit
AAPL – I firmly believe in any roll that brings you premium while maintaining decent coverage. There is no reason here for them to sell off below $170 (not that it can’t happen, just it would be strange).
SNDK – for me, this is the part where I roll down if possible for less than $2.50 per $5 and wait for it to bounce back.
October 23rd, 2007 at 12:24 pm | Permalink edit
TXN – that is an insane sale! I’m willing to go back in them now with the Jan ‘09 $30s at $5.50 XXX No sells against it for now but dont’ let the $30s go below $1.20.
October 23rd, 2007 at 12:34 pm | Permalink edit
Check out FSLR… again!
YHOO – with the Aprils you should cover your gains. By covering your 30% gain by selling $30s that have a $1.20 premium, you are well on the path to a 100% profit by April with good downside protection. I like the YHOO Apr/Nov $30 spread for $2.25 with 10 in the $10KP and 10 in the $25KP XXX
October 23rd, 2007 at 1:06 pm | Permalink edit
I’ve never hear of Paul van Dyk either… Foto, that’s a great gig!
Mattress play – when in doubt with the Dow, I just grab whatever is close to $2 in the current month. There’s no intense logic to this other than, because I do it consistantly, I’m able to quickly glance at my plays and see how well each one’s doing and know if I should be getting out without much thinking. Also, you’ll notice that the $135s are $2.16, so it does work out quite well. Also, when in doubt, I always buy closer to the money. Right now the $134s are $1.84 – .16 the other way but that triggers my “roll for less than .35 rule” so there’s no sense in initiating a position I would roll out of….
As a rule of thumb, once a mattress play goes bad on you and you are about to roll it, you are committing to a course of action that is unlikely to be rewarded unless you get a 200-point drop. That is what this play is designed to guard against. I cannot say often enough that this play is NOT designed to make money – it is designed to let you leave your callers on the talbe longer than would otherwise be prudent.
AAPL Apr $170s/Nov $170s – since you shaved $20 on the roll you might want to consider rolling your caller into 2x the $180s (+ $3.40 to you) and putting $15 back to add a set of Jan $180s. It might not seem like much but you’re taking an in-the-money caller and putting him into a $5 premium position that’s only $5 in the money so you are effectively rolling your caller up $10 and adding $10 per current call in premiums to him. With your layeded position, you have many rolling opportunities, even if the stock starts to go down (as you can always roll 1/2 back to a lower strike in Nov or Dec to collect more money and premiums.
CCJ – I love that company! They are like SNKD, great for selling calls into the initial excitement. Unfortunately, it does spike you out sometimes, the trick is to have more faith on the dips and wait for these spikes to sell. There’s no reason for you to buy out your caller with $1.50 of premium remaining, you’ll want to put in for an even roll to the Dec $50s hopefully/eventually.
October 23rd, 2007 at 1:39 pm | Permalink edit
IMCL moving again!
BA – selling calls against leaps, not naked shorting.
AMZN flying.
BIDU taking off.
WYNN – I wouldn’t bet against them but too high for me here.
Markets rallying on 99% probability Fed will cut again. Doesn’t leave much margin for error…
AMZN new high!
Welcome Ray! CAKE – The problem with chasing is you missed a profitable sell which was 1/2 the reason we took the stock. The spread of the Jan/Nov $22.50s is still a good one but I would fully cover as you don’t have the buffer we have from the sale. When I put in a trade amount XXX means a trade that is generally recommended, as opposed to some crazy thing I am doing myself or something I am discussing with someone. The amounts I put in are last sale price and I usually try to do better as every penny does count (especially in the $10KP). Only on a mo trade am I likely to chase but never in the $10KP (we try not to day-trade there as it triggers restrictions).
Oh yeah – go HMY by the way! Moving up for no particular reason is a good thing! As I often say, as long as you are in a position for good fundamental reasons, sticking to your guns is a good strategy!
DIG is an oil up ETF (oil and gas) DUG is an oil down. I like DUG at $41.70 as a concept but they don’t have options so I don’t bother (too boring).
Transports have been a rock, holding up the rest. S&P at 1,510 makes whatever the Dow is doing pretty meaningless. AMZN still on fire, hope they don’t miss! Russell not happy at 810, SOX at 473 is TERRIBLE but no one seems to notice.
October 23rd, 2007 at 2:25 pm | Permalink edit
Charts – I very rarely look at anything less than a 10-min chart to determine an entry or exit.
RIMM flying up puts tempting but scary. Whole market flying, incredible moves.
NFLX – best to roll to Dec $25s for -$1.80, costs $1.10 but I doubt it’s going down at this point. Can roll up our own position to $25s too for +$1.60 XXX
October 23rd, 2007 at 2:46 pm | Permalink edit
BMY – great deal down here.
AAPL Apr $170s/Nov $170s – I’m happy to talk about these when we’re slow but it’s a 2 hour discussion and I”m still tyring to catch up from lunch!
INTC is absolutely a buy down here. If we’re going to have a real rally, then SOX must join and they are way behind. I see HOT and COST not doing well which is strange if life is so good.
IBN is doing well, that’s a positive indicator for INFY.
October 23rd, 2007 at 2:52 pm | Permalink edit
RIMM $120 puts for $4.75, stop at $4.25, look for $6+ XXX
October 23rd, 2007 at 2:53 pm | Permalink edit
CY following SPWR to ATH!
Fed is Next Tuesday!
October 23rd, 2007 at 3:30 pm | Permalink edit
Gotta roll DRYS up again!
October 23rd, 2007 at 3:41 pm | Permalink edit
Finally RIMM goes down! Don’t be greedy, we need to get out of this trade…
CAKE – I don’t know why down.
Gold is flying, dollar is dying, this is a very dangerous kind of rally.
