October 25th, 2007 at 9:36 am | Permalink edit
POT missed on currency and that’s a very silly reason for them to get sold off, let’s keep an eye on that one for a bottom and perhaps get the Jan $110s, which will give sanity a time to return on that one.
BIDU going down again possibly, always fund to play.
Whole market looking ugly already! Mattress down just in case!
October 25th, 2007 at 9:39 am | Permalink edit
Took SLB $95 puts for $1.80 rather than sell my calls, will DCA my calls to match, figure I’ll get both ends eventually.
October 25th, 2007 at 9:50 am | Permalink edit
AMZN – that would be known as the losing end of your spread.
Now in an SLB strangle, see above note, will get out with a small profit on the call side if they can’t break $101 and then give my puts a little time before giving up with a minor loss overall.
October 25th, 2007 at 10:06 am | Permalink edit
DCA = Dollar cost average, in other words DD for less money and hope to get even on a bounce. In other words, I don’t sell, I buy 2x puts to stop my losses then try to time a low and DD – If I’m wrong, no big deal as I have the puts, then, on the way back up, I try to sell the puts even and play the upside as a mo play where I take 1/2 off as we cross my new, lower, break even point, leaving me back in the original trade with a lower basis than I started with.
The problem with the SLB calls is someonw bough 1,000 at the close yesterday and now they are trying to shake him out. This is why we scale into trades, there is always someone (we had “Mr. 3,000″ messing up our XOM trades a couple of months ago) who buys too much and tips our position off, causing the people who sold the contracts to do what they can to get us out. If you are scaling into a position, that’s no big deal as you get to buy rounds 2 and 3 cheaper but if you buy your whole position at once, it can be very painful.
Oh no, new home sales are revised lower last month which makes this month’s pathetic number look BETTER! August is now down 8.3% (it was much better and we rallied off that) and September is up 4.3% from that so they’re going to act like that’s a good thing. INSANE!
October 25th, 2007 at 10:08 am | Permalink edit
POT recovering already. Jan $105s, now $11.20 XXX
October 25th, 2007 at 10:20 am | Permalink edit
IRBT – I have a bid to roll down to the Dec $17.50s for .70, see if I get a bite.
Here we go again to the upside! Dow going vertical!
October 25th, 2007 at 10:22 am | Permalink edit
Let’s watch 13,750 for resistance but I’m more worried about holding 1,520 on the SOX than anything else. Nas 2,775 is critical too but things are flying!
October 25th, 2007 at 10:43 am | Permalink edit
Sellers coming back – crazy market, I’m cashing out what I can, tightening up the DIA strangle and building it up trying to avoid temptation until we hit some real levels.
Transports giving up a lot, down half a point.
MSFT – didn’t we do that yesterday? I think I said buy the $32.50s as a pre roll and sell the Nov $30s but now that they are up again, better off selling the Dec $32.50s against 3/4 of the new total and setting tight stops on the exposed $30s.
October 25th, 2007 at 10:59 am | Permalink edit
AAPL and GOOG NOT up??? The world is truly upside down today…
CELG – they lowered outlook but the sell-off is a little extreme. Good long-term buy down here but you have to play it safe by taking the Apr $65s for $7.80 and selling the Dec $65s if they fall to $3 but hopefully selling the $70s for that much or better. XXX
HXL – you expect them to have trouble at $25. I’m not concerned unless they break below $24 again, not that I’m concerned anyway as I’m still covered and the roll-up is – $1.50 on both ends. I’m considering a roll to 2x Mar $25s, now $2.78 and rolling caller to 2x Dec $25s, now $1.48 when that roll costs me less than $1 per current share so that’s my upside plan. Downside, I’m very comfortable and I can pick up $1.48 on a roll to the Dec $25s for a nice income on my $2.95 entry. The way to roll up is to buy 1X the Jan $25s as a mo play, then roll the caller to a 2X cover when it runs out of gas and then roll the existing calls up for a credit. Once this breaks $25 it could really fly.
NYX – still a good deal at $91
BSC still dead.
AMZN – we bought the $90s yesterday but that’s a lot of premium for you to give up fro no reason. If your leaps are way out in ‘09+ then better to collect the cash (and consider rolling yourself down).
October 25th, 2007 at 11:45 am | Permalink edit
WM looking ugly. Watch the regional banks for Fed rescue sentiment by the people who should know something…
$10KP:
FNF – Terrible report! This led to my bearish outlook. These guys write the insurance on 1/3 of the real estate in America and business is way off AND they had to increase reserves to cover losses due to bad mortgages! BUT – they are a cash machine that pays a $1.20 dividend on what is now a $15 stock and you can sell the June $15s for $2 so that play is a BUYBUYBUY as the retun at June is $1.53 + 3 dividends of .30 = $2.43 on a net $13.47 investment = 18% in 8 months. XXX As far as the Dec $17.50s go… I’m rolling to the Mar $15s at $1.65 (+ $1.40) and selling the Dec $15s for $1.25 (hopefully a little better) as it’s worth .15 to give this time to recover.
HMY – We have the Jan/Dec $10 spread at .20 (now .10) with our $12.50s acting as upside protection.
INFY – Now the Nov $50s. India looks good and they should at least get us back to our $2.10 basis.
PFE – Had .20 this morning, now $25s are back to .10 I’m going to DD for that price!
T – not worried.
CAKE – Bad same store sales, holding on but will be happy to get $2 on the 3 open calls but the covered ones are fine.
TSO put – I will DD at $2
LVS (10/31) – have to be patient for now.
YHOO – those are fine.
TSO Put spread – hold against DD on naked puts.
$25KP (same except):
MTB – Almost ran up today. Roll to $100s for $1.70.
NEM – no worries.
SHLD – waiting but not happy. 5/8 uncovered will cover rest if below $135 for the day.
LVS puts – If WYNN breaks $160 we can’t afford to risk these.
MSFT – taken $32.50 calls per earlier conversation
NFLX – fine
October 25th, 2007 at 12:08 pm | Permalink edit
TLAB – no I didn’t get them (too many positions). Earnings were not bad, revenues were off on US sales, just like everyone else. I’d roll down or improve and stay long.
POT – you don’t have to be quick, it’s coming back down and I still like them at $100.
AMZN – I know I didn’t make a naked AMZN trade. Dec $105s, now $1.39, are not coming back. You can use your current postition to set up a Jan $95/Dec $90 spread for a .22 credit and roll your $105s down to the $95s for $2 to cover. That puts $3 in your pocket and, if AMZN does come back, you can also sell the Nov $90s or maybe the $95s for $3 but ask again if you get so lucky.
PNRA – good job locking in profits! They’re not going anywhere unless the Fed does something goofy (sadly likely) but they don’t have $42.50s which makes rolling unattracive down here. I’d offer $1.40 to roll to May $45s, that way you can wait out the last .90 of your caller and decide if you want to collect $1 per month on the position or kill it.
CMI got killed on US sales (kind of theme).
DRYS – no more rolling! Basis is $14, now $12.80 if it doesn’t go down by Friday we can’t afford to risk the Fed.
October 25th, 2007 at 12:13 pm | Permalink edit
SPWR – I agree BillBig! No reason not to reenter that one! It was the Nov $110s at $4.50 originally so may as well ask for it. XXX
As predicted by me yesterday, ICE not faring as well as NYX.
AAPL – If you sold the $185s and didn’t follow my brilliant call to buy them out yesterday you are better off holding them through expiration but looking to roll them down if they lose 50%.
MON is done here, be careful. Following BG down.
October 25th, 2007 at 12:31 pm | Permalink edit
AIG/Other insurers – they are selling off on fire news. Great buy opportunity once the selling stops.
Welcome Sutree! TIE – No sale! We’ll sell the $35 if they can’t break through (maybe if they break below $34) but not unless we have to now on this lovely gain.
CROX on the comeback trail.
Transports now down 1.5% with oil at $89.15 (can it possibly matter?), SOX down another 2% so the Q puts are a nice play (unless they don’t make stuff out of semis anymore). Still, I’m sidelining other than tightening up positions and pressing my DIA strangle (now $136 calls/$136 puts buying more of either at $2.20).
20% in 10 mins – what does that annualize at?
CNX – good logic but logic not working in this market so be careful.
CME off to the races today! New ATH.
GOLD (the stock) at ATH – be afraid, be very afraid!
If energy stocks weren’t doing well we’d be down more although XOM isn’t helping the Dow.
October 25th, 2007 at 12:31 pm | Permalink edit
CELG popping!
October 25th, 2007 at 12:50 pm | Permalink edit
Nas 2,750, NYSE 10,000, SPX 1,510, Dow 13,600, SOX 450, Rus 800 – we lost the SOX, I’d say if we lose 4 it’s time to run for covers…
AIG – if true that would be a crushing blow to financials and, since they are not tanking, it’s very unlikely to be true.
EDU at ATH
BAC – I like C better but either one would rocket on a rate cut.
IRBT – just clearing out the suckers I think. Check out the volume, 10x volume on the way up, trickle down sell-off.
Rumor drives a bubble market. I had a great video of Cramer explaining how he used to manipulate stocks back in the 90s, it’s great stuff, so easy to do. Just last week we sat here and altered the bid/ask spread on BXP for fun, it’s so ridiculous sometimes…
MU 52-week low!
October 25th, 2007 at 1:05 pm | Permalink edit
NFLX – I would roll to 2x the Jan $25s at $2.38 (+.95 per current share) and roll the caller to 2x the Dec $25s at $1.45 (-$2.50 per current share). It costs you $3.45 per current share but flips him to $2 per current share in premium. If the stock flatlines, you’ll drop .50 and he’ll get nothing which is a lot better than paying him $2 now. You can then quit or sell decembers for another $1.50. You can also do something similar with the Jan $25s and the Mar $27.50s which will cost you less.
AIG – the longer they don’t deny the lower it goes. My guess is there is some loss and they are sitting with PR trying to figure out what to say but the best rumors always have a grain of truth.
$90 oil just .50 away!!!
October 25th, 2007 at 1:11 pm | Permalink edit
Check out NVDA!
So much weakness.
LFG (title like FNF) falling through the floor, they are all caught up in the same concerns as AIG.
PNRA still goign down, COH still falling, BG not snapping back.
Dare I short FWLT? I swore I would leave them alone but the $140 puts are just $5…
FNF – I have no idea what $1.53 was at the time but I love these guys at $15 but, if you are taking up a new position, better go way long.
October 25th, 2007 at 1:22 pm | Permalink edit
CFC – the whole financial system IS screwed, no one’s willing to admit it yet. I did say as C goes so goes the nation and look at it go today (and all week since I said it).
Strangle – you want to stay as close as possible but don’t get suckered into buying calls again until we start holding some levels. Right now, you should get interested in the $136 calls at about $2.20 but only if we are slowing down by then. Your puts will cover a mistake but why make it if you don’t have to and, remember, When in Doubt – Buy Half!
POT with a nice comeback now, fantastic way to enter leaps!
Transports almost down 2 points, SOX down 3%
October 25th, 2007 at 1:47 pm | Permalink edit
The problem with selling BAC $45 puts short is that if they hit $45, something must be so horribly wrong that you don’t want to own it!
XOM heading for $90 again!
POT Beaking out! Could be a Daily Double on the leap!
FNF did break below – good call Film! They are not “playing it safe” with reserves. The title industry, as a whole, has been very sloppy for years and many title defects have slipped by at closings (the result of cost cutting on the search end). In a bull housing market, this is not a problem as everyone has money and, ultimately, someone has to pay (not FNF). In a dead market, each foreclosure uncovers all the defects and, if the homeowner or previous homeowner is at fault and has no money, you can be damn sure the bank makes the title company pay. FNF alone wrote about 6M policies last year and we are talking about the last 5 years of work that will be called into question.
BAC more downside. C has Asia exposure, more investment banking. BAC grows through aquisition and who knows what crap they picked up along the way.
AIG 52-week low (5% rule)! C at 52-week low!
RIMM must have a lending division!
POT I wish we had bought closer calls!!!
CME out of control!
SPWR testing yesterday’s lows.
AIG (-5%), C (-1.3%), CAT (-2.6%), DIS (-2%), JPM (-2%), T (-2%), UTX (-1%), WMT (-1%) and XOM (-1.3%) killing the Dow.
BA (+1%), DD (+%), KO (+1%), MCD (+1%), MRK (+1%), MSFT (+2%), PFE (+1%) holding up. That’s a flight to quality, consumer staples over discretionary.
POT 1/2 out at $16, stop at $15 XXX
October 25th, 2007 at 1:50 pm | Permalink edit
SPWR – $4 is a number I’m willing to risk .50 on so stop at $3.50 if we can get it.
I smell a market turn coming so be careful with shorts. Let’s set tight stops on DIA puts, we can always buy them back if we’re wrong. XXX
October 25th, 2007 at 1:56 pm | Permalink edit
POT effectively declaring force majeure as a competitor in Russia had a flood, which will cause a global shortage so we weren’t smart on this one, we were lucky! Looking at selling $115s for $7.50 if possible against remaining calls. XXX
October 25th, 2007 at 2:24 pm | Permalink edit
Here comes the Fed rumor (or whatever for today) BSC, GS turning up. BA doing great, sellers losing their nerve…
October 25th, 2007 at 2:59 pm | Permalink edit
AIG $65s for $1.30 XXX
October 25th, 2007 at 3:11 pm | Permalink edit
AMZN taking off. CCJ moving. COP up huge, should have stuck it out from yesterday…
YHOO – well he still has $1 in premium but we’d like to move him to the Dec $32.50s, now $1.65 but maybe for .40 so you can offer that for the roll in case it triggers.
October 25th, 2007 at 3:27 pm | Permalink edit
AIG – watch $62.50, I’m 1/2 out there if it even hesitates as that was LOD yesterday.
LULU down of all things…
October 25th, 2007 at 3:32 pm | Permalink edit
Bah, gave up on AIG at $1.50, too tedious.
Escaped SLB too, I’m starting to think this rally is BS.
Back in DIA puts, now $136 puts for $2.30 XXX
October 25th, 2007 at 3:43 pm | Permalink edit
ISRG is going to be a mega short as Cramer keeps piling people into it at higher and higher prices so be careful. If I wasn’t so busy shorting BIDU, I’d be short on these guys in a similar play.
BA – according to the Durable Goods Report, BA is carrying the entire economy! Not one I would give up on…
October 25th, 2007 at 3:47 pm | Permalink edit
WFR – fun play in this anti-SOX environment. I’m still nervous so I’d go Jan/Dec $60s for $1.75 or just take the Jan ‘09 $65s for $12 and cross my fingers.
FNF – the sell premise was similar to AIG (plus the adjustments). This company is one of the greatest cash machines on the planet, I am very much against a short position on them.
