November 13th, 2007 at 8:19 am | Permalink edit
AAPL – I wouldn’t cover down here, it should get back to around $170 or so, then you can just consistanly sell $10 out of the money calls every month. The Dec $170s ($15 off the money) are $5 so, even if they finish in the money, if you roll them up $5 every month APPL would have to hit $230 after 12 months to really call you away. Meanwhile, picking up an extra $60 on the holdings doesn’t suck…
November 13th, 2007 at 9:31 am | Permalink edit
SBUX – it’s a long way to $25. If there’s a V crush that’s worthwile you might want to take him out and be patient but I wouldn’t want to leave them uncovered if the markets head back down (mine are still uncovered on the ‘09 $30s).
GoogleFly – let’s see what numbers we get this morning, perhaps we can sell into some initial excitement, absolutely take the money and run on the $670s if we can get even there (down $2.3K at the moment). The December roll is our most likely escape if we can do it for low or no cost. Nicely played Edro, in concept if not in calculations!
AAPL – It can go up $11 as fast as it went down but I would take advantage of a good run to start selling some Decembers, that’s an XXX for all positions where you can make a nice sale 5-10% above your current position. We can always roll them down if the market turns south but let’s take advantage of high volatility to make some nice sales. As a rule of thumb, assume you will recover 50% of the recent drop in November and sell accordingly. If we do better than that, paying back our callers will be of small concern.
Buying back callers – I’m in no hurry, I’m just going to roll people to higher December calls and I’m willing to spend some to knock them out of position but I’m still not ready to go naked.
Thanks Scott! We all do that, I went for premiums on a few positions and got burned for it but there is nothing wrong with taking prudent risks over the long haul as long as you allow for the occasional burn. Going from being up 50% to up 40% really hurts but you’re still up 40% so it’s no time to give up on a working strategy just because it doesn’t work every single day.
DIA puts – I wouldn’t buy them at the open (I’ll be rolling Decembers up) but let’s see how we handle 13,100 and 13,200 as rejections there would be telling.
November 13th, 2007 at 9:37 am | Permalink edit
I did advocate going for open GOOG calls in the $10KP, we uncovered the bear call spread and rolled our $690s down to $670s and now we are able to get our close to even (after killing our poor caller). It was a gamble but one I didn’t mind taking as I was reasonable certain we’d get a bounce. Again to $10KP players – even is fantastic let’s be thrilled to take $6 and run on this one! We’ll see about the put side later. XXX
November 13th, 2007 at 10:00 am | Permalink edit
Dow not breaking 13,100 – that’s not good. GOOG couldn’t take $650.. These are not supposed to be heavy resistance!
Short calls up 90% – once they are up 90%, unless they are way out of the money with no hope AND I have nothing better to roll to, I tend to take them out and lock the profits. It moves my long call onto my open list which reminds me I need to cover again and gives me the flexibility to do so at a moment’s notice. Commissions should be no more than $13 per trade (many platforms offer that) and should not be a factor in your decision making. I will spend $13 to get $100 in premiums on an expiration week – why not?
This goes back to the old James Bond investing model, you have to be ready to dump a position on a moment’s notice and even buy it right back if circumstances change. There’s no room for regrets, it’s all about maximizing gains, loyalty to a position – even one that’s been so good to you – is not an option.
November 13th, 2007 at 10:15 am | Permalink edit
AAPL ‘09 $180s – I take it you got a scare yesterday but your $10 roll down is just $4.30 and your callers average $7 so there’s not much to worry about. If you have to roll yourself down to the $170s you can roll your callers down to the $165s and pick up $3 more for that so no worries. I think you’re in a good spot and there’s no sense in wasting money betting against yourself.
XLE – I’ve been selling the $73s and I was hoping for a run up to roll them to Dec, no luck so far. PTR coming back nicely.
TASR – I’ve been rolling down. It’s only $1 to roll down to the $12.50s and you pick that up in intrinsic value and gain tremendous V on your callers so that’s the move I would make then sell the $15s for .75 and who cares if it puts them in the money?
Wow on GS!
Nice break outs forming…
November 13th, 2007 at 10:25 am | Permalink edit
AAPL – I always hate to give up time unless I’m lookingto capture major momentum which, if you did it at 9:48 would have been nice. With the Apr $200s I’d sell the Dec $170s for $8.85 and spend that money to roll yourself down to the $170s (+ $1 out of pocket). Much less risk, and you have 3 more sales ahead of you.
Meanwhile, a fresh Apple play is selling the $165s for $4.50 and buying the Jan $170s for $13.75. The Dec $170s are $8.85 so you can end up with a free play and I like this enough to go 5 in the $25KP. XXX
November 13th, 2007 at 10:35 am | Permalink edit
GS – good news is already planned based on the 6% gain this morning. The time to buy them was the last 3 days I’ve been harping on them, not now. As a new play I’d go similar to Apple and take the $3.50 for the $230s against the Jan $240s at $13.35 as the Dec $240s are already $9.75 so, if it goes up, you are unlikely to lose much on the roll.
BIDU going mental!
OVEN – I’d play them to recover and sell the $17.50s, you can always roll down.
November 13th, 2007 at 10:54 am | Permalink edit
MRB – I missed them at $5 yesterday actually (too busy) but I now have a buy at $5 in but I’m not chasing as oil is down to $92.50, not a good sign for gold. It is of course ridiculous that miners are selling off with gold over $600, let alone over $700 but there’s no sense fighing the market on this one, lots of time to do mo plays on the way up.
GS locking in profits – As long as they’re over $220 I wouldn’t worry about it (and if the market stays up). Things look generally strong right now and all selling seems to be being met with buying across the market (but not in energy – Yay!).
November 13th, 2007 at 11:09 am | Permalink edit
AAPL – I would not roll the $180s to the $190s as you are getting $3.50 to give up $10 in position. That is the opposite of the way I like to roll, which is to pay $3.50 for $10 in position. Only when I am very deep in the money do I roll up, I want to be slightly in the money, it gives me a delta advantage over my caller (assuming it’s a stock I belive in).
XOM is not a buy – the Dow will have to find a way to ignore it.
Wow, here goes Google! Not so crazy now to uncover those calls was it?
Apr $200s/Dec $165s – unacceptable upside risk! And shame on you for not stopping them out from $6.75 yesterday. You can just about pull off a roll of putting him to the Jan $160s at $19.25 and using that $8 to roll yourself down to the Apr $170s or you can jump yourself to the Jan $170s for about $1, both of which are safer plays than the one you have.
SU, I like it but watch your downside as they are NOT getting to $105 unless something terrible happens in the world.
YHOO – now you get out? They’re finally moving…
POT is smokin’
Check out VOD – huge run.
MOO is moving again.
November 13th, 2007 at 11:20 am | Permalink edit
AAPL – Apr vs Jan calls – yes if you can afford it but this play has an excellent chance of being a free ride, very appealing in a small virtual portfolio.
November 13th, 2007 at 12:02 pm | Permalink edit
Gold stocks – gold held $800 $(799 now) despite oil being down $3 (something that the oil patch is simply not dealing with yet!) so we might get a minor (get it?) bounce.
APPL – Yev if yo just did it then not so bad but very dangerous if they break $170 on you. Effectively you sold the $165s short for $10 and used the $200s as a margin cover. That’s a perfectly good strategy as long as that’s your intention but when you first sell a call, just like when you first buy one, if you get blown out by 20% in a short amount of time you need to seriously reconsider the position. I do not like wide diagonals, they can really kill you and you end up stuck in the trade for a very long time just trying to get even.
On the whole, this was a very good bounce so far and all we need to do is hold 13,100 but I doubt we’ll break 13,200 today. Remember my prediction was for a range of 13,000 to 13,300 and 13,150 is pretty much right there.
YHOO – I’m down to the Apr $25s and I chickened out yesterday and sold the Dec $25s for $2.35 but we’ll see how it goes.
ETFC – I took 200 Jan ‘09 $5s yesterday at $1.55, now $1.65 – I think I’ll hold.
November 13th, 2007 at 1:06 pm | Permalink edit
$10KP – we now have just the put side of Googlefly remaining. The put side is down $1,800 so let’s try to avoid that loss. We can roll this position from the $20 Nov $670 puts to the $60 Dec $700 puts and roll the putter from the $28.40 Nov $680 puts to the $67 Dec $710 puts. It is better to take $1.40 now and roll our liablity up $30 than pay up $10. Since our risk is only to the upside for an additional $8.60 loss, we can make a new positive play to cover.
A riskier move that I like is spending $21 to roll him to the the Nov $650 puts at $10, flipping the relationship. He has $9 in premium and if GOOG closes below $650 you get $20 back and pay him nothing more, which is a win. At any point we can shut that down for $16 or more it will be a win as we were paid $5 when we opened that spread so that’s the XXX play and it should be makable as you have -$5K in margin now and you are spending $10K but releasing your margin requirement.
November 13th, 2007 at 1:30 pm | Permalink edit
$10KP – Very glad we rolled those Ts, almost even already.
CAKE we’ll ride out to the bitter end I think. HMY, just have to wait. LVS we will roll to the $120s later in the week. T spread is very dull. TSO should perk up but the Dec $55 puts are $4.25 so no worries there on the eventual roll.
$25KP:
GOOG Dec $690 callls – rolling to Jan $660 calls for $41 (+$23) and selling the Dec $680s for $21.50 (net +$1.50)
NEM – selling current $50s for $1.40
T – same as $10KP except we should take 1/2 off even at $2.05 if possible
FrankenGoog – I’m disinclined to move it right now with a $690 target for December.
LVS – same roll to Dec $120s later.
NFLX – I can’t believe this guy stil want’s .65! We roll down to Jan $25s for $1, roll the caller to current $25s at .50 and then we’ll pick up another $1.50 next week (but wait until after expirations as this may be a pin job.
PTR – working just fine.
SHLD – have to take out caller for .60, just in case.
TSO – as above.
November 13th, 2007 at 1:59 pm | Permalink edit
NEM – if you can afford it, shove your guy into the Nov $50s for $1.25 then, when his premium dies, roll him back. If that works, you can spend $2 to roll yourself down (you could do that first to save margin).
$10KP – as you can see above, I do try to specify $10KP moves. If it doesn’t say $10KP and have a sprecific amount of shares to enter, assume it is NOT risk appropriate for that folder. We are closing it Friday so best wait until Monday for new plays.
YHOO cover – I’m waiting.
BIDU put spreads – Wow you waited quite a while to take action… If you can afford it, you want to roll the callers down to the $330s and get that $9 premium for the week but you certainly want to bite the bullet and roll ten down to the $340s next month, even if you have to roll yourself down to cover. You are deep in so keep them in as much premium as possible. If it goes up, you don’t care because their $30 will roll you all the way up to the $420s if you have to and if it goes down, you already have a $40 position advantage plus the $30 premium so your next roll would be to the Jan $310s on the way down!
There goes 13,200 with no problem!
GoogleFly – oh I’m sorry, that does go for the $25KP too!
November 13th, 2007 at 2:15 pm | Permalink edit
Oil down $4 and the majors think that’s good too. So that’s oil up = good, oil down = good, economy up = good, economy down = good, inflation = good, deflation = good… Just so we can keep track of the right time to buy and sell!
BIDU – I like them as a long too, that’s why I’m selling close puts.
AAPL Dec $185s – that’s not conservative. I find it amazing how everyone forgot the history of — yesterday! I would never expect people to remember all the way back to last Wednesday, that would be silly, but just yesterday these stocks fell off a cliff. Nothing has changed that can’t be changed back tomorrow and not being decently covered is a sin in this market. Make less money and enjoy the rally rather than scrambling every time we get a small correction.
That being said, woo hoo on ETFC!
November 13th, 2007 at 2:18 pm | Permalink edit
NDAQ joining the party. $42.50s as a mo play at $1.10, stop at $1, out at $1.50+ XXX
November 13th, 2007 at 2:52 pm | Permalink edit
I think I’ll be grabbing some puts ahead of housing! They are giving away the DIA $134 puts at $2.27, as if it’s not possible we can go down anymore. Those are pretty easy with a stop at $2 and you’ll get $3 if we drop 100 points. XXX
Ray – there is great decay on the index puts. If you take a Jan and sell a Nov it’s pretty much free money, plus you can adjust with each $1 of movement and, worst case, there’s a month to roll in between.
GS – no way I would bet against them but I have sold the Nov $210s to my great regret on some and $220s on others but that was yesterday when the world was ending and we had a credit crisis and foreclosures were out of control and ETFC was going bankrupt and the global economy was slowing down. Today everything is great! 
PS – I am not rolling those until the bitter end.
November 13th, 2007 at 3:00 pm | Permalink edit
BIDU – I have been rolling myself and my putters right on up. My call position was open but I’ll be re-covering later.
GOOG for BBQ – that’s a good mix! They are your $670 puts? That’s pretty good, you can take that $11 and run or take out the caller at $6.30 and set a stop on yourself at $16, which is what I’d do as it’s bound to retrace (and watch those housing numbers!).
November 13th, 2007 at 3:45 pm | Permalink edit
Wow, check out the VIX today! The LTP jumped almost 30% (from yesterday’s – 10%) on that reversal of fortune for the callers…
GS roll – always with a roll, go high if you like the stock, you can always roll him down when he loses money but to roll him up costs you money – think of it as gravity working against you.
Index spreads – we have some extensive examples in old comments and I think there was a day last week where we stepped by stepped through some DIAs on a day (in fact I think I posted it in the wrap up of one of the days).
Woo hoo – used home sales up 0.2%! At that pace we’ll burn off that excess inventory before the last glacier melts!
GOOG retrace – nope I was wrong! I thought they couldn’t take $660 without a pullback but it looks like it can.
DIA puts – DAWWD $1.88 now, I’ll sell them to you for $3 though!
Uh oh – testing my 13,330 band already?!?
BIDU – if this keeps up I’m going to be back in the $420 puts!\
November 13th, 2007 at 3:50 pm | Permalink edit
Oops, there’s that GOOG retrace. See, I’m not wrong, I’m just too far ahead!
November 13th, 2007 at 3:53 pm | Permalink edit
Must have puts into the close! I still have my Dec puts which I’ve been rolling up all day. Remember, having DIA calls for a month let’s me leave positions open and bullish so the hedge has value beyond being a gamble on the Dow going down..
ETFC $5!!! Ka Ching!
November 13th, 2007 at 3:56 pm | Permalink edit
DNDN has a very determined seller at $6.80, there should be a good pop when he’s done.
13th, 2007 at 3:58 pm | Permalink edit
Maria might have called it, nice strength at the end here.
