{"id":2527,"date":"2007-11-01T21:20:29","date_gmt":"2007-11-02T01:20:29","guid":{"rendered":"http:\/\/www.philstockworld.com\/newsletters\/members\/2007\/11\/01\/thursday-portfolio-moves-33\/"},"modified":"2007-11-01T21:22:07","modified_gmt":"2007-11-02T01:22:07","slug":"thursday-portfolio-moves-33","status":"publish","type":"post","link":"https:\/\/www.philstockworld.com\/2007\/11\/01\/thursday-portfolio-moves-33\/","title":{"rendered":"Thursday Virtual Portfolio Moves"},"content":{"rendered":"

November 1st, 2007 at 9:42 am | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

UTHR – and to think yesterday we were worried about the low end of the spread! The whole trade can be cased out up $3,600 and that’s plenty for the $10 and $25KP, it’s not worth finessing at this point, we could just buy some $85 puts, now $1.65, for the pullback but I’m happy where we are. XXX<\/p>\n

November 1st, 2007 at 9:51 am | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

XOM\/TSO – where were you for the past few weeks? Now it’s a little later – not terribly so but I wouldn’t want to chase things down today.<\/p>\n

BIDU massively unrealistic! $360 puts back at $11, I’m bidding $10 and, unless the Dow bounces back to 13,800, I will just keep rolling up!<\/p>\n

Posts – I did Mr. S but I was sidetracked today, we can talk about them this evening assuming there’s still a market to talk about.<\/p>\n

CROX – doing nothing is the move for now if you can’t afford to roll but rolling to 2x the $60 puts at $8.60 and selling 2X the $55 puts at $3.60 is the correct move (but you need to lay out $6.50 per current contract). XXX<\/p>\n

November 1st, 2007 at 10:10 am | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

C is trading like it’s the end of the world! I’d love to buy them here but this is an astounding sell-off and they blew right through the 5% rule at $38.90 so we should really wait for them to test that first. BAC popping back already, this is one of those best-case scenarios for my BAC 15% play as we get to take out a caller early and maybe get another sale for November.<\/p>\n

ISM Manufacturing just 50.9, also very low and prices paid up from 59 to 63, that’s massive infaltion and manufacturing slowdown = STAGFLATION!<\/p>\n

GLW – good thing to watch out for but OLED is a bigger threat than this.<\/p>\n

Lots of SOX holding up but they have been so beaten down…<\/p>\n

Last rate cut we were flat the week after.<\/p>\n

GOOG barely budging.<\/p>\n

November 1st, 2007 at 10:34 am | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

BMB\/All – just be careful as your leaps are benefitting from a higher VIX – that’s why we roll down with our callers as we get the full benefit of a rebound as it becomes more intrinsic for us.<\/p>\n

Days like this it’s nice to reflect on the value of being hedged. It is SO nice to just hang out and watch the markets, looking for deals, rather than freaking out about our positions.<\/p>\n

HXL – well we did totally regret NOT buying him out on Tuesday! I would go with good old Rule #2 and buy back 1\/2 until we see a proper tun up.<\/p>\n

SLB turned green.<\/p>\n

Nat Gas up 66Bcf, higher than expected – not the news the gas and cola boys wanted to hear. Check out BTU by the way!<\/p>\n

General note – do not confuse minor retracements for rallies. Any stock that falls 2.5% should go back to -2%, any stock that falls 5% should go back to -4%, bounces back to those levels mean nothing. That goes for a Dow that falls 200 points and bounces to -160 in general. There are literally just 381 advancers, we could literally list them here in a few paragraphs!<\/p>\n

November 1st, 2007 at 10:39 am | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

CROX – You can get $3.10 for the $55s, hard to turn that down! Selling these against the Jan $55s at $6.20 XXX<\/p>\n

November 1st, 2007 at 10:39 am | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

Oops – buying the Jans first and will sell stop at $3!<\/p>\n

November 1st, 2007 at 10:42 am | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

I think there will be at least a bounce right here so lets stop out of puts and get back in at lower strikes if we break 13,700 but otherwise it’s time to play the upside lightly!<\/p>\n

OIH $190s at $5 as a mo play. DIA $138s for $1.65 – tight 10% stops but a good start if we are going to come back. XXX<\/p>\n

November 1st, 2007 at 10:46 am | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

XOM – yes I would buy back and roll and be ready to sell the $90s if there’s any trouble.<\/p>\n

C – $40s at $1 XXX<\/p>\n

November 1st, 2007 at 10:55 am | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

YHOO – I simply would not buy him out because I would not myself pay $1.65 for the Nov $30s and that’s what I have to do to buy him out. Never buy out a caller if you wouldn’t buy the call yourself unless you are specifically getting a huge advantage by rolling him (obviously to something you would not buy yourself).<\/p>\n

I just got done saying I expect us to bounce to 13,780 on pure math so I’m taking some plays for that purpose alone but all you do now grabbing “deals” on a bounce is a high premium with possibly no follow through. I know it’s very tempting but, if we’re coming back, there’s another 160 points of gains to add after we cross 13,780 so I’m just asking you to be 20% patient.<\/p>\n

PFE – yes, buy 20 more at .85 for a $1.05 basis. XXX<\/p>\n

C – absolutely take the roll, you need to sell calls anyways so it saves you margin.<\/p>\n

MA doing great!<\/p>\n

November 1st, 2007 at 11:15 am | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

GM – should bounce off $37.50 back to maybe $38.25 but if they can’t break that, the next leg should go lower.<\/p>\n

DNDN – I have an offer in at .30, you can still get .15 for the $7.50s!<\/p>\n

MSFT moving again, SHLD moving, GOLD moving… let’s keep a close eye on SHLD and GE for a recovery.<\/p>\n

LVS down to $130, earnings tonight, WYNN still down.<\/p>\n

DIA – out of puts and into cash. Shifting to Dec is a good idea if we can get the $137 puts for $3 or less. If we keep going down, we restart mattress plays with $137 puts at about $2 following quickly with the $136 puts as soon as the $137s hit $2.25 (stopping both out at .25). So the risk on that trade is .25 but once we hit level 3 the .25 stop gives us a .25 prorfit (at least) on the $137 puts and and even stop (at least) on the $136 puts. Since we buy 1\/2 as many $135 puts as $137 puts, we have locked in a profit already and any movement past that is all profit BUT that’s asking a lot with the Dow already down 200 so we’re more likely to get a chance to dow that to the upside once the $138s cross $2 (up .35) we can aggressively buy the $139s as, even with a .25 stop on the $138s, we’ve got a dime proft so a .25 stop on the $139s will only cost us, at worst, .15.<\/p>\n

CCJ – you have the ’10s because you are buying and holding, it is so cheap to improve your position you really should. You are paying $4 to pick up $5.50 of intrinsic value (you currently have none). This improves your upside delta relative to your callers and, if things really take off, you can always roll that position to 2x the ‘09 $50s as an even trade which means you can almost never get in trouble with your callers so you can sell the current $45s without fear ($2 but, of course, you can afford to wait and see if you can do better).<\/p>\n

I cannot XXX CCJ leap plays often enough, the returns are phenominal!<\/p>\n

OIH stopped out , nice run. XXX<\/p>\n

November 1st, 2007 at 11:34 am | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

Market orders – if you put in a market order, you are effectively agreeing to pay the ask so you may as well bid it. It’s worse than that because if the ask goes up 20%, you’ve agreed to that too. Just bid the most you are willing to pay and always consider bidding on the next bracket instead – if something is going that out of control, you should be happy with the higher bracker. Also, if it’s getting away from you – go out in time. Longer calls tend to move slower and attract less bidders and they have the side benefit of letting you sell some other guy who put in a marktet order the front-month calls when they top out. That’s exactly what we did with NEM yesterday, I’m sure glad I wasn’t the one who paid $2 for the $50s!<\/p>\n

Speaking of which, rolled BIDU puts up to $370s for $3.50<\/p>\n

NOW BOOM is flying!<\/p>\n

POT with a massive recovery. BG and MON not so lucky. Is someone goosing the big names to spark a rally?<\/p>\n

IMCL holding on.<\/p>\n

GRMN took a nasty hit.<\/p>\n

IBM – you can only play them to gain the premiums and for momentum, the swings are insane.<\/p>\n

MA – how can you not like them (as a stock) they only charge you the debt, it’s the banks that are on the hook for collecting. They make their money right at the point of purchase so as long as this country is going bankrupt, they will make a ton of money until the last American family maxes out their last credit card.<\/p>\n

November 1st, 2007 at 11:36 am | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

We’re not holding it!<\/p>\n

November 1st, 2007 at 11:41 am | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

GOOG not scary, it’s the best of all stocks you can put your money into. If the economy falls apart, cheap advertising flourishes.<\/p>\n

Check out OIH – I got out way too early!<\/p>\n

CCJ – the $40s are best but you can also just wait for a nice run and buy the $50s as a mo play and sell your shorter calls when it slows down. The real key is to establish a position, sell a few calls and then use that money to roll down. Once you are a little below your caller’s strike, you can sell and relax for as long as you have more than 3 months between you.<\/p>\n

Sorry but BA not looking all that strong. I’m ready to buy back the index puts. XXX<\/p>\n

November 1st, 2007 at 12:18 pm | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

Great comment on CNBC – the guy is saying “But the $2Tn worth of sub-prime morgages aren’t all going to fail.” That’s true but how many have to fail before it hurts? 10% ($200Bn), 20% ($400Bn), 30% ($600Bn) – surely some number would have to matter…<\/p>\n

Ford October sales down 13%, cars down 29% trucks down 3%.<\/p>\n

Chrysler cutting 10,000 jobs.<\/p>\n

Gold moving again. XOM bouncing with oil – dollar not that strong, at least it should hold up the market somewhat as you need more dollars to buy shares. Support for the dollar is coming from the fact that we hit the bottom of the Hong Kong float. They are pegged to the dollar and this forces them to do something to either prop us up or devalue their own currency. I think I mentioned earlier in the week, this is one of the big factors that is goosing the Hang Seng this month.<\/p>\n

AXP – I always like them and will buy more on a crash but $59 is not reflecting a real downturn.<\/p>\n

CCJ – the put spread is valid too (also a bullish play). The issue you need to be aware of with in the money put spreads is you can have the stock put to you! Not a big deal but an annoyance that is likely to happen over the course of a year.<\/p>\n

GRMN – be careful, they just offered to buy someone for $3Bn, seemed like a lot to me.<\/p>\n

YHOO – I would think $30 with GOOG going higher but who knows this week. I still think this is a great big pre Alibaba flush and I will keep pressing my bet.<\/p>\n

TGT – you don’t want to pay a premium to your caller. Put stops in sure, but don’t just give him money when you don’t have to.<\/p>\n

November 1st, 2007 at 12:41 pm | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

I see things going up (mostly OIH and Semis) but nothing is moving the market…<\/p>\n

MA – they were overpriced all summer! But you certainly haven’t seen me short tthem since we cashed out. I didn’t want to play them up, but I was satisfied wwhen they went back to $140.<\/p>\n

OIH – I was busy so I put in $5.90 as a stop when it broke $6 and it triggered on me, I just went into it hoping for 20% and that’s what I got… Had I not put in the stop I may have held it but I was busy looking over other positions and I hadn’t even established that on yet. I don’t complain about making 20%(ish) in 20 minutes!<\/p>\n

GOOG stuttering, if they go they will take the Dow below 13,700. OIH run seems silly too.<\/p>\n

C – that was a good call. I never would have thought they could get hammered like that. You guys have to understand, banks are not casually held retail stocks – these are the stocks funds keep Billions in. If they are bailing like this then things are probably worse than I think and I think they are pretty bad!<\/p>\n

New York Attny General suing FAF for writing BS appraisals in order to justify stupid mortgages on overpriced homes. If they turn this rock over then the whole market really could collapse as homes are a good 30% overvalued (that would be $600Bn in write-offs to come!).<\/p>\n

http:\/\/online.wsj.com\/article\/SB119393091496279165.html?mod=yahoo_hs&ru=yahoo<\/font><\/a><\/p>\n

I’ve talked about this before – its a circle of corruption that has bilked homeowners out of Trillions of dollars this decade and the sick thing is they do this (just like the oil companies) to make just Billions. It is a constant sream of middlemen all gleefully jacking up the price of the things you buy so that the 1% they skim off the top is a bigger number.<\/p>\n

November 1st, 2007 at 1:23 pm | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

Welcome Beat! You are buying the CCJ Jan ‘10 $40 for $16.30 and it has $10.45 in premiums over 26 months (.40 per month). Your goal is simply to collect more than .40 per month and whatever bonus over .40 plus any remaining intrinsic value you retain is your profit. We love CCJ because it is a good long-term play with very volatile short-term peformance so the $50 calls we sold against our ‘09 $40s for $2.50 on the 26th are were taken out on this dip at .25 while our calls dropped $2.50 over the same time. Now we can wait a bit and we can already sell the $45 calls for $2.30, that would make $4.55 collected against our $12.50 position in one month! The fact is we’ve been doing this since May and got the basis down to $6.70 before I got bored adjusting it so now we just take our profits (like today’s $2.25) on the dips and then wait for the bouncebacks and sell again.<\/p>\n

Wow CNBC is pumping oil like crazy! They are talking $200 oil and leveraging a regular defense department war game as “evidence” of the pending crisis. That just makes me want to short oil more as it smacks of desperation. SU Dec $110 puts are $6.60 XXX<\/p>\n

COP Dec $80 puts are $2, those could be interesting too with nat gas falling. XXX<\/p>\n

November 1st, 2007 at 1:47 pm | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

C $40s – my stop is around here (.90) if the dow can’t get back over 13,700.<\/p>\n

POT heading down fast if anyone still cares about them.<\/p>\n

November 1st, 2007 at 1:48 pm | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

GOOG going red – 13,500 here we come!<\/p>\n

November 1st, 2007 at 1:54 pm | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

I’m not sure this is a covering environment. LVS, TSO, CROX, GRMN are telling you that there are companies that are 30% overvalued and the indications are that there are thousands of companies that are 20% overvalued.<\/p>\n

GM Oct sales down 1% (+2% expected). Car sales off 4.5% AND THEY ARE GIVING THEM AWAY!<\/p>\n

November 1st, 2007 at 2:01 pm | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

YHOO I’m still following down but don’t forget this is a regular positon for me (1\/2%) so make sure you know it’s a gamble!<\/p>\n

Rein – as long as you’re protected for a quick dip in Apple. Everyone is going down if we cross 13,600.<\/p>\n

CROX – roll Nov. No, just get out and get back in later. You are the sucker we are selling calls to!<\/p>\n

DIA current mattress layer is $135s at $1.70 very tight stops on the rest. XXX<\/p>\n

November 1st, 2007 at 2:02 pm | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

That was DIA $135 puts!!!<\/p>\n

November 1st, 2007 at 2:14 pm | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

CROX – double roll to the Jan $50s for + 1.90 and rolling the caller to the $50s at $3.40 is an XXX as we already made $1.30 off the first caller so it the stock gets to $55.10 and we have to give all our caller money back, we’ll have the Jan $50s $5.10 in the money!<\/p>\n

November 1st, 2007 at 3:06 pm | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

Nice job BDC!<\/p>\n

DIA plays – again and again I will say that the point is not as much to make money as to protect against a major move. These plays are not for doubles, they are to make .25 on a 150-point move and .50 on a 200 point move (25%) and are great money in a real collapse but if you don’t have the discipline to take 10% and get out, it’s very hard to win. We’re just finished a 300 point down move from yesterday’s 13,950 spike. I was lucky because I bought $140 puts during that spike and 300 points is all the move I ever wished for. Now that we don’t have a big event planneed, it’s back to December for my ordinary strangle.<\/p>\n

Also, you don’t have to exit the trade by selling, you can exit the downside by scaling into calls. That way you don’t need to be such a great bottom guesser. You just start picking up $137 calls until you achieve a new strangle and ease out of all but the two close strikes on either side. Then you are back to not careing which way it goes.<\/p>\n

GOOG never broke negative by the way, that was what saved us just then.<\/p>\n

I just can’t get motivated to keep saying that a 50 point gain from here is meaningless so please read earlier comments again. Thanks…<\/p>\n

November 1st, 2007 at 3:19 pm | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

Chrysler down 12%, ford down 13%, GM down 1.1%, TM up 0.5% woopie!<\/p>\n

Earnings plays – not into it tonight. Too much else to worry about. Need to be well covered both ways for tomorrow. If China blows we could open at 13,500 or less and there’s not much I see that will pop us more than 100, so my weighting is going to be a little to the downside.<\/p>\n

LTP – leaving it alone yesterday was a very good plan! It was down to 306% (I said I would worry at 304%) and now it’s up to 316%. Reminds me of the crisis article I wrote in August “Don’t just do something, stand there.” Good to read if you still get ulcers.<\/p>\n

UTHR at ATH!<\/p>\n

YRCW at 52-week low!<\/p>\n

BAC at 52-week low! OK let’s add to that downside folks!! XXX<\/p>\n

November 1st, 2007 at 3:21 pm | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

Bought more BIDU $370 puts at $12.80 xxx<\/p>\n

November 1st, 2007 at 3:40 pm | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

TSO puts – yes but we’re stuck with the putters for now.<\/p>\n

C calls – long gone! Didn’t we have that conversation at .90?<\/p>\n

CFC – beware the clawback provisions! CFC probably screwed a lot of banks with the terms but they couldn’t screw them all with that mass of loans they had to dump so a certain percentage of defaults will ultimately kick back to them. That’s the other, other, other shoe that won’t drop until much later.<\/p>\n

CMG etc.. Watch yourselves, we are all spoiled by 2 years of upside momentum and we’ve forgotten what gravity feels like. Not everything automatically bounces the next day (housing hasn’t, buiders haven’t, lenders haven’t). Let’s just give the markets a chance to show us where they’re going rather than try to tell them where we want them to go.<\/p>\n

Check out SKS – that’s strange!<\/p>\n

November 1st, 2007 at 3:45 pm | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

YHOO – I would by more but my Apr $30 calls are still $4.05, more than I paid! Poor $30 caller is getting killed though!<\/p>\n

Low volume – don’t forget we’ve been fighting through trading curbs since 10am – that’s effectively cut the program trading out of the loop on the NYSE and killed the day’s volume. Watch the Nas at 2,800, if they lose that we’ll get major downside mo overnight.<\/p>\n

ECA up for no reason I see, grabbing the $70 puts for $1.20 XXX<\/p>\n

November 1st, 2007 at 3:49 pm | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

Sale – yeah it is like rummaging around a store with a 25% off sale and not finding anything to buy… We just have to wait for the 50% off sale!<\/p>\n

Those SU puts are working out nicely!<\/p>\n

FXI through the floor, going to hold onto BIDU overnight.<\/p>\n

November 1st, 2007 at 3:59 pm | <\/font>Permalink<\/font><\/a>   <\/font>edit<\/font><\/a><\/p>\n

Curbs – I thought so too but they slapped them on first thing in the morning – that’s why I got the impression this was worse than it looked!<\/p>\n

DIA puts – oops, too late. Oh well, I doubt it will hurt you to stay in but the rule of thumb is just leave your bottom two mattress layers overnight with at least a 50% upside cover. XXX<\/p>\n

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November 1st, 2007 at 9:42 am | Permalink   edit UTHR – and to think yesterday we were worried about the low end of the spread! The whole trade can be cased out up $3,600 and that’s plenty for the $10 and $25KP, it’s not worth finessing at this point, we could just buy some $85 […]<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45,7,11],"tags":[],"class_list":{"0":"post-2527","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-appears-on-main-page","7":"category-portfolio-moves","8":"category-portfolio-review"},"_links":{"self":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts\/2527","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/comments?post=2527"}],"version-history":[{"count":0,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts\/2527\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/media?parent=2527"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/categories?post=2527"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/tags?post=2527"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}