2008 will be a year for good returns. I plan to scale down my investment avenues to a solid 10 stocks...5 in scottrade and 5 in usaa. Each will provide diversification and I am looking for best of breed stocks. The two portfolios will contain both stocks and options, either DITM calls or covered calls. Overextension in 2008 could again lead to a year like 2007. This is why 10 stocks only will be selected.
For Scottrade I'm looking at the following sectors: retail, healthcare, mining, tech and a bank stock.
USAA will have a similar compilation as I feel these stocks will excel in 2008. Also as I expect volatility to remain, I will go for a few softer good stocks such as Pepsi, Coke, Proctor and Gamble or Altria.
A few stocks I am looking at for 08 are the following
Healthcare, biotech: DNA, CELG, RAD, UNH, HOLX, Medco Health.
Tech: RIMM, GLW, EMC, CY, GRMN
Retail: BBY, SHLD, JWN.
Mining: ACH, FCX, LMC, AUY
Bank and Investment: WB, BAC, GS, NLY.
I also pledge to be more active and post more often as I become more settled in my house. Best of luck for 08...
Saturday, December 29, 2007
2007 year in review
2007 was for sure an up and down year in the market. High volatility and inexperience led me to a weak gain in my in first full year of active trading. As the year closes it appears I will make roughly $300, a mere 1% gain for the year. I have some ideas and approaches for 2008 which will be outlinde in the next blog. However, below are some thoughts and lessons learned from the year past.
1. Buy in increments and don't be afraid to take some money off the table when a stock has moved up.
2. Playing around with options can be a very successful way to make money. Buying and selling these in increments can lead to exceptional gains; however, pick and choose wisely...much research must be done in order to excel here.
3. Covered calls were a good approach to the solar sector. My dad had a lot of success this past year with these. 2008 could be the year for covered calls in the troubled financial sector.
4. OTM calls are no good unless they are months out. They risk/reward ratio is not good enough for an investment.
5. My 2007 spec stocks did not work well. Had I not invested in these in 2007 I probably would have had a big gain.
6. Companies that now have ridiculous looking dividends may not be a safe investment (AHM).
7. DITM calls are the safest way to invest in options.
1. Buy in increments and don't be afraid to take some money off the table when a stock has moved up.
2. Playing around with options can be a very successful way to make money. Buying and selling these in increments can lead to exceptional gains; however, pick and choose wisely...much research must be done in order to excel here.
3. Covered calls were a good approach to the solar sector. My dad had a lot of success this past year with these. 2008 could be the year for covered calls in the troubled financial sector.
4. OTM calls are no good unless they are months out. They risk/reward ratio is not good enough for an investment.
5. My 2007 spec stocks did not work well. Had I not invested in these in 2007 I probably would have had a big gain.
6. Companies that now have ridiculous looking dividends may not be a safe investment (AHM).
7. DITM calls are the safest way to invest in options.
Tuesday, November 27, 2007
Bouncin back?
Today we got a good bounce back. This market is definitely not for those fai of heart. The last two days have boded well for me as my two top stocks have bounced back. My top three investments are GRMN, ACH and CRDN. CRDN is up 3 bucks over two days, ACH the same and GRMN is up 13!!! It is time to take some off the table because I feel the market will continue downward. Anyways, back to CRDN talk.
I continue to remain bullish on CRDN. It has bottomed and it will continue upward. Today in a conference call CRDN reiterated guidance and covered all facets of their business. They seem to be in more business than I thought. I still believe they will get several MRAP II orders, which we will hear about by December. I also feel that they have an increased short float due to the previously falling share price. This means we could see a huge jump on any good news. Currently, my call options (5 Jun 08 50's) are close to the strike price (closed at 46). After we break 50, every movement of 1.00 in share price means $500 for me. I will be looking to sell 5 June 08 80's at $3.00 or better to get some cash in hand. This will complete my spread and then I can sit and wait for paydirt.
I continue to remain bullish on CRDN. It has bottomed and it will continue upward. Today in a conference call CRDN reiterated guidance and covered all facets of their business. They seem to be in more business than I thought. I still believe they will get several MRAP II orders, which we will hear about by December. I also feel that they have an increased short float due to the previously falling share price. This means we could see a huge jump on any good news. Currently, my call options (5 Jun 08 50's) are close to the strike price (closed at 46). After we break 50, every movement of 1.00 in share price means $500 for me. I will be looking to sell 5 June 08 80's at $3.00 or better to get some cash in hand. This will complete my spread and then I can sit and wait for paydirt.
Tuesday, November 20, 2007
have stocks bottomed? strategies forwardlooking
ok, does the market suck or what? I mean we are all getting hammered here. However, I have an idea that will bring money to the bank by next June. I'm going to be placing a bull credit spread on CRDN.
First of all, a little insight into spreads. Spreads can be horizontal or vertical. Horizontal means you buy / sell at the same strike price, different months. Vertical means you buy / sell at different strike prices on the same month. I think CRDN is grossly undervalued right now. At $43, it is victim to short sellers. The company reported good numbers, which fell below expectations due to one time taxes.
I have previously asserted my stance on CRDN, I think it can hit $100 after it receives MRAP II orders. However, at $43, it is trading at 8 times forward earnings. Either somebody knows something or it is just getting beaten up. I'd like to propose buying 10 June 50's and selling 10 June 80's. I'm not sure if you have to buy and sell at the same time. What I would prefer to do is buy 10 here (costing 5000) and sell 10 when CRDN goes up a little bit. That way I would lower my initial cost. Anyways, lets get to the point.
Lets say I buy 10 June 50's for $5.00 a contract. I wait two weeks CRDN recovers a little. I could just sell these, and make a profit, but I am long CRDN. I want to sell 10 June 80's. I sell them for $2.00 a contract. I know have an initial investment of $3000. Three different outcomes are possible.
The first is CRDN is less than $50 in June. I have limited my loss and will lose all $3000. I'm lucky I'm young because I can recover. The second outcome would be the share price would be between $50 and $80. This would give me some gain as long as the share price would be above 53. I paid 5-2 per contract, so 3 dollars a contract. As long as it's above 53 we are good to go. If the share price is above 80, I have made $30 per contract, with 10 contracts, that's $30000 of a $3000 investment.
Ultimately I would like to buy June 50's now and sell June 80's in a few weeks when I can get the same price. This would also enable me to risk nothing if I can buy and sell at the same price.
With the money, I would use $10k to pay off debt, $10k for a mutual fund and $10k on Ashley. This way everyone is happy. I have also looked into chinese stocks for this play and will keep you posted on any strategies I implement from now on.
First of all, a little insight into spreads. Spreads can be horizontal or vertical. Horizontal means you buy / sell at the same strike price, different months. Vertical means you buy / sell at different strike prices on the same month. I think CRDN is grossly undervalued right now. At $43, it is victim to short sellers. The company reported good numbers, which fell below expectations due to one time taxes.
I have previously asserted my stance on CRDN, I think it can hit $100 after it receives MRAP II orders. However, at $43, it is trading at 8 times forward earnings. Either somebody knows something or it is just getting beaten up. I'd like to propose buying 10 June 50's and selling 10 June 80's. I'm not sure if you have to buy and sell at the same time. What I would prefer to do is buy 10 here (costing 5000) and sell 10 when CRDN goes up a little bit. That way I would lower my initial cost. Anyways, lets get to the point.
Lets say I buy 10 June 50's for $5.00 a contract. I wait two weeks CRDN recovers a little. I could just sell these, and make a profit, but I am long CRDN. I want to sell 10 June 80's. I sell them for $2.00 a contract. I know have an initial investment of $3000. Three different outcomes are possible.
The first is CRDN is less than $50 in June. I have limited my loss and will lose all $3000. I'm lucky I'm young because I can recover. The second outcome would be the share price would be between $50 and $80. This would give me some gain as long as the share price would be above 53. I paid 5-2 per contract, so 3 dollars a contract. As long as it's above 53 we are good to go. If the share price is above 80, I have made $30 per contract, with 10 contracts, that's $30000 of a $3000 investment.
Ultimately I would like to buy June 50's now and sell June 80's in a few weeks when I can get the same price. This would also enable me to risk nothing if I can buy and sell at the same price.
With the money, I would use $10k to pay off debt, $10k for a mutual fund and $10k on Ashley. This way everyone is happy. I have also looked into chinese stocks for this play and will keep you posted on any strategies I implement from now on.
Wednesday, November 7, 2007
3 buys, all options
My portfolio is getting a little messy but it will have to suffice for now. I rebought an EMC call I sold, netting 130. Profits have been taken on EMC the past few days and I rebought in for the next jump up. I also bought 10 out of the money calls for SIRI. SIRI has robustness to break through its recent high as investors foresee approval on the XMSR/SIRI merger.
CRDN has been unfairly brutalized. They reported 'bad earnings' on rising costs, but didn't lower full year guidance. I'd like to buy more but I'm strapped on cash right now.
My last aquisition was purchasing ACHEH, a MAR 40 call for ACH. The chinese stocks go up and down and I'm looking to put some money in my pocket before the bubble bursts. This price is the cheapest its been in 2 months, so I thought opening a position would be a good idea.
CRDN has been unfairly brutalized. They reported 'bad earnings' on rising costs, but didn't lower full year guidance. I'd like to buy more but I'm strapped on cash right now.
My last aquisition was purchasing ACHEH, a MAR 40 call for ACH. The chinese stocks go up and down and I'm looking to put some money in my pocket before the bubble bursts. This price is the cheapest its been in 2 months, so I thought opening a position would be a good idea.
Saturday, October 27, 2007
Forward looking portfolio
With recent drop of another stock I'm back to even par. I'm now looking it just selling for loss in several stocks with one goal in mind...I have a few sectors I want my money in.
The first is infrastructure. With the global boom, any play on this will yield great results. For this I'm looking at SGR, FWLT and FLR. These are high quality companies that specialize in infrastructure. The second is high growth. Any company that is growing rapidly will be able to make it through recession. For this I'm thinking along the lines of CRDN, GRMN, and AAPL. I want to buy high dividend paying banks on the way down. 10 shares at a time for every $1 drop in share price. This should be accomplished in the ROTH. Lastly, I want tech. Tech is booming now, best quarter in years and will drive us forward and keep us from recession. Here I like EMC, CY, AMAT. Any short term solar plays are valid.
A mixture of stock and options will be good. I want to stay away from mortgages and stay away from retail. Both are on a downtrend right now. I'll look to revamp this within the next few weeks and will keep you posted on new aquisitions to the portfolio.
The first is infrastructure. With the global boom, any play on this will yield great results. For this I'm looking at SGR, FWLT and FLR. These are high quality companies that specialize in infrastructure. The second is high growth. Any company that is growing rapidly will be able to make it through recession. For this I'm thinking along the lines of CRDN, GRMN, and AAPL. I want to buy high dividend paying banks on the way down. 10 shares at a time for every $1 drop in share price. This should be accomplished in the ROTH. Lastly, I want tech. Tech is booming now, best quarter in years and will drive us forward and keep us from recession. Here I like EMC, CY, AMAT. Any short term solar plays are valid.
A mixture of stock and options will be good. I want to stay away from mortgages and stay away from retail. Both are on a downtrend right now. I'll look to revamp this within the next few weeks and will keep you posted on new aquisitions to the portfolio.
Back again!!
Sorry all who read this, probably very few, but I had to take a break after losing my ass last week. I got way too risky in options buying, oct expiring options and buying options in companies whom I did little research. The only way to win though is to not replicate mistakes, so I'll outline my mistakes.
1. Buying BBW options and not selling until after earnings was a mistake. I had planned to sell before earnings and need to learn if I have to take a loss before earnings, then just do it. It's not the end of the world and if you have a plan you need to stick with it.
2. Buying SNDK without doing any research was a horrible idea. Since INTC reported a strong quarter, and said flash memory was good for them...I assumed SNDK would blow away expectations. What happened in reality was expectations were already built up, so when SNDK reported better than average results it wasn't up to street expectations. Long term I think SNDK will be great. The correct call would have been buy some stock or long term options before earnings and add to it if they disappoint.
3. Buying a FEB cat option before earnings was ultimately a bad decision even though they had one of the best quarters ever. Their forward looking guidance put a dent in the stock price, but I'm not quite sure why.... If their international gains continue, then they should keep making profits and hitting expectations. Anyways, It's a feb expiring option so I have time to make it up.
Now with that said, I did make a pretty penny on INTC options. I did, however, take a 'free ride'. I did an illegal trade, let me explain. I bought options which auto-exercised at expiry. I then owed the bank 10000, but instead of paying it I sold my shares for a gain. I technically was trading with money that wasn't mine; so I had done what was called a free ride. I would have been on probation for 90 days, however, I moved money from my roth over and money from my other account before the trade settled. So now I'm not on trading probation.
1. Buying BBW options and not selling until after earnings was a mistake. I had planned to sell before earnings and need to learn if I have to take a loss before earnings, then just do it. It's not the end of the world and if you have a plan you need to stick with it.
2. Buying SNDK without doing any research was a horrible idea. Since INTC reported a strong quarter, and said flash memory was good for them...I assumed SNDK would blow away expectations. What happened in reality was expectations were already built up, so when SNDK reported better than average results it wasn't up to street expectations. Long term I think SNDK will be great. The correct call would have been buy some stock or long term options before earnings and add to it if they disappoint.
3. Buying a FEB cat option before earnings was ultimately a bad decision even though they had one of the best quarters ever. Their forward looking guidance put a dent in the stock price, but I'm not quite sure why.... If their international gains continue, then they should keep making profits and hitting expectations. Anyways, It's a feb expiring option so I have time to make it up.
Now with that said, I did make a pretty penny on INTC options. I did, however, take a 'free ride'. I did an illegal trade, let me explain. I bought options which auto-exercised at expiry. I then owed the bank 10000, but instead of paying it I sold my shares for a gain. I technically was trading with money that wasn't mine; so I had done what was called a free ride. I would have been on probation for 90 days, however, I moved money from my roth over and money from my other account before the trade settled. So now I'm not on trading probation.
Friday, October 19, 2007
Lost my shorts...
I've officially lost my shorts on options. First time, last time. New rules have been put in place to stop this....
1. Buy mispriced options, and don't buy to time earnings.
2. Buy ITM options, so it's same as owning the stock, so stock replacement.
3. Buy into growth.
4. Don't be an idiot.
1. Buy mispriced options, and don't buy to time earnings.
2. Buy ITM options, so it's same as owning the stock, so stock replacement.
3. Buy into growth.
4. Don't be an idiot.
Thursday, October 18, 2007
gonna get hit like a truck...
Hopefully I'm wrong about this, but just documenting my thoughts...I should have seen this coming. I have a feeling I'm going to get hit by a truck on these BBW options and there is nothing I can do. Looking back on it and seeing tha they are seeking strategic alternatives....seeing that there last quarter they missed expectations...I should have either bought options expiring in a few months or avoided this completely. I got too overconfident in my trading and I think it'sgoing to cost me. Retail sector in general has been quite crummy.
Anyways, my INTC calls should sell today for around 2.00. I missed this sell yesterday and had anticipated either an upgrade or EBAY earnings would drive them higher. I got the latter. This should offset lost money on BBW...SNDK also reports today after market close, so lets hope for a good call there. I still see CAT putting up good numbers, I think their international exposure will lead them to kill expectations.
CRDN has hit the price target and so has JCP. However, I'm not touching JCP until I see something solid. CRDN is another story, I thought I missed this buying opportunity but I don't think I have. I see it dropping to 73, and if i does I'm getting 10 shares. They report earnings on OCT 30.
I'm still looking to offload 50 shares of SVNT, 25 shares of GE and a BBY call. It's time to take some of this money to the bank and buy the house of my dreams with the love of my life. And lets not forget to let the bulls loose.
Anyways, my INTC calls should sell today for around 2.00. I missed this sell yesterday and had anticipated either an upgrade or EBAY earnings would drive them higher. I got the latter. This should offset lost money on BBW...SNDK also reports today after market close, so lets hope for a good call there. I still see CAT putting up good numbers, I think their international exposure will lead them to kill expectations.
CRDN has hit the price target and so has JCP. However, I'm not touching JCP until I see something solid. CRDN is another story, I thought I missed this buying opportunity but I don't think I have. I see it dropping to 73, and if i does I'm getting 10 shares. They report earnings on OCT 30.
I'm still looking to offload 50 shares of SVNT, 25 shares of GE and a BBY call. It's time to take some of this money to the bank and buy the house of my dreams with the love of my life. And lets not forget to let the bulls loose.
Tuesday, October 16, 2007
Mid Day update...
I had correct reads on CRDN and JCP. I suggested that I raised my target buy for CRDN to 75, and it hit resistance in the 74's and is back up to 76. I now regret not buying, but had purchased 2 options yesterday and wanted some cash on hand in my account. JCP blew right through 61 to 58 and change today...I think the retail sector is truly undervalued, and believe JCP will bounce back. I'm almost tempted to buy stock rather than options, because the options are so overvalued it's not funny. I could purchase the stock and sell a covered call, but would tie up too much money in doing so.
BBW shorts are not covering...although it is slightly up today. I have until tomorrow to sell the position and it is not looking well at the current moment.
Since the whole market is down today INTC shares are trading sideways in lieu of the fact of earnings report at the end of the day. I'm debating on whether I want to sell any of these as I know a personal friend who has 10 of these oct contracts. Let's cut the crap and let the bulls loose already.
BBW shorts are not covering...although it is slightly up today. I have until tomorrow to sell the position and it is not looking well at the current moment.
Since the whole market is down today INTC shares are trading sideways in lieu of the fact of earnings report at the end of the day. I'm debating on whether I want to sell any of these as I know a personal friend who has 10 of these oct contracts. Let's cut the crap and let the bulls loose already.
Monday, October 15, 2007
new positions
By COB today, I have opened up three new positions. Which I will outline below. I am in a revamping transition on my portfolio where I'm looking to offload stocks / options in order to gain liquidity, changing positions to better myself while also freeing up a chunck of change for this house I am buying.
I opened a position in November calls for SNDK. There has been an abnormally high call volume for SNDK november, leading me to believe somebody knows something. Is it a takeover? Or just solid earnings? We find out on thursday...
The second position I opened was of CAT. I bought a FEB call for CAT...I think they will blow numbers away. I feel that international infastructure is extremely bullish now, and CAT will not disappoint with earnings this friday. Again, time will tell. However, I can't see CAT getting much cheaper than this.
Lastly, I bought a JAN 09 call for RAD. This is in my serious revamp of Scottrade account, where I want to sell OSK, sell RAD, sell LVLT all for options. This swap out should give me 2500 for the house...but not instantaneously. It's a slow process.
Tomorrow will be INTC earnings. I'm also looking at trimming a position in my USAA account and getting into some SNDA (they were up a quick 4% today on no news). By tomorrow I will close at least two of my calls of INTC. I expect earnings to be good, but expert analysts say the make or break number for INTC is gross margins, which sunk to a 5 year low of 47% last quarter. This quarter expects 52%, so anything north of this will be green for traders.
I opened a position in November calls for SNDK. There has been an abnormally high call volume for SNDK november, leading me to believe somebody knows something. Is it a takeover? Or just solid earnings? We find out on thursday...
The second position I opened was of CAT. I bought a FEB call for CAT...I think they will blow numbers away. I feel that international infastructure is extremely bullish now, and CAT will not disappoint with earnings this friday. Again, time will tell. However, I can't see CAT getting much cheaper than this.
Lastly, I bought a JAN 09 call for RAD. This is in my serious revamp of Scottrade account, where I want to sell OSK, sell RAD, sell LVLT all for options. This swap out should give me 2500 for the house...but not instantaneously. It's a slow process.
Tomorrow will be INTC earnings. I'm also looking at trimming a position in my USAA account and getting into some SNDA (they were up a quick 4% today on no news). By tomorrow I will close at least two of my calls of INTC. I expect earnings to be good, but expert analysts say the make or break number for INTC is gross margins, which sunk to a 5 year low of 47% last quarter. This quarter expects 52%, so anything north of this will be green for traders.
Other ways I can free up cash is taking off some GE, some SVNT, and possibly one of my BBY calls. This could give me about 2500 for the house. I'll look to trim these within the next week.
Let the bulls loose.
Saturday, October 13, 2007
Watching these companies for next week.
Tues - DPZ, INTC, TMA
Wed - JPM, UTX, KO
Thur - BBW, CY, GOOG, SNDK, WYE
There have been unusual options on SNDK for November, takeout speculation should be noted. I will probably jump into options of SNDK prior to earnings report.
Also, a Chinese company Shanda (ticker SNDA), who is an interactive entertainment media company in china (video games...MMORPG), is super cheap and I will buy this. I think this company is going to take off as I feel I have been left behind by the rest of the Chinese companies.
Wed - JPM, UTX, KO
Thur - BBW, CY, GOOG, SNDK, WYE
There have been unusual options on SNDK for November, takeout speculation should be noted. I will probably jump into options of SNDK prior to earnings report.
Also, a Chinese company Shanda (ticker SNDA), who is an interactive entertainment media company in china (video games...MMORPG), is super cheap and I will buy this. I think this company is going to take off as I feel I have been left behind by the rest of the Chinese companies.
ACH and ytd gains
I made 190 yesterday off of trading ACHJN, an option of ACH, a Chinese Aluminum producer. I had been sick of sitting on the sidelines and it paid off. My strategy for next week will be to closely follow the options market. I'd like to make a trade on wed and sell on thur, or within the day on both days. I think I can make some quick money on the options for big companies, I'm looking at RIMM, GOOG, BIDU, ACH, CEO and TSL. I'm looking at oct expiring options, and I just want to know premiums during weeks of expiry. If they are decent I may get in and out for a quick gain.
YTD gains....Hard to calculate sort of because I have my Direct Deposit where I trade. However, I figured realized gains to be around 5% and unrealized gains to be about 13.3%. Not that great but better than nothing. I made many stupid trades and have learned from them, and have actually been doing quite well lately (although so has the market in general). I need to be able to make money when the market is falling as well.
YTD gains....Hard to calculate sort of because I have my Direct Deposit where I trade. However, I figured realized gains to be around 5% and unrealized gains to be about 13.3%. Not that great but better than nothing. I made many stupid trades and have learned from them, and have actually been doing quite well lately (although so has the market in general). I need to be able to make money when the market is falling as well.
Friday, October 12, 2007
Overexposed on OCT 07 calls...maybe. Risk = Reward
Am I too overexposed on OCT 07 calls? We'll see, I bought another yesterday and have an order in for two more BBWJW calls as they are at half the value I had bought my previous ones. Right now I'm losing my tail on these OCT calls, but we'll see how today fares. I bought 1 ACH call yesterday, ITM, shortterm, to try to get a quick score. I bought OCT 70 call for 6.20, and will sell roday. Premarket has ACH at 77.80, so perhaps I'll get a quick $200 on what I call 'a very stupid trade.' I didn't even research, I went on gut instinct, and normally when I do this I get burned. So why did I buy? I'm sick of seeing these Chinese stocks go up and me not partake. So I got greedy. They go up one day, then down the next day, then up the next day...We'll see if it pays off. Below are a list of the calls I currently have, expiring next friday.
.BBWJW Strike price of 17.50 3 contracts at $1.40 a contract (I have an order for 2 more at $.50, maybe I can break even on this. Shorts still have three days to cover, with the biggest movement being on Tues and Wed).
.INTQE Strike price of 25 5 contracts bought at $1.15 a contract. (Should have sold these yesterday when I could have got $1.35 out of them. My target price was $1.50, I'm not sure I'll see it.
.ACHJN Strike price of 70 1 contract bought at $6.20 yesterday, will sell today for 8 or better.
Other general thoughts that weren't acted upon... selling GE, I had a hunch that GE would miss, and eventhough they were right on it wasn't good enough for the street. I had a limit yesterday to sell 25 shares at 42.50, now premarket has GE at 40.90. I'm disappointed in myself.....on a sidenote, I was going to buy GE OCT 40 puts for .14-.16 cents...that's what they were going for yesterday. Could have made a pretty penny on that.....CRDN is close to another buy, I wish I had more money. I may sell a call to get into more CRDN.....Buying another EMC call may be a good idea, April 08 or Jan 09 calls look promising. Remember, ITM, we want to own EMC stock and get the most movement for our investment.....
.BBWJW Strike price of 17.50 3 contracts at $1.40 a contract (I have an order for 2 more at $.50, maybe I can break even on this. Shorts still have three days to cover, with the biggest movement being on Tues and Wed).
.INTQE Strike price of 25 5 contracts bought at $1.15 a contract. (Should have sold these yesterday when I could have got $1.35 out of them. My target price was $1.50, I'm not sure I'll see it.
.ACHJN Strike price of 70 1 contract bought at $6.20 yesterday, will sell today for 8 or better.
Other general thoughts that weren't acted upon... selling GE, I had a hunch that GE would miss, and eventhough they were right on it wasn't good enough for the street. I had a limit yesterday to sell 25 shares at 42.50, now premarket has GE at 40.90. I'm disappointed in myself.....on a sidenote, I was going to buy GE OCT 40 puts for .14-.16 cents...that's what they were going for yesterday. Could have made a pretty penny on that.....CRDN is close to another buy, I wish I had more money. I may sell a call to get into more CRDN.....Buying another EMC call may be a good idea, April 08 or Jan 09 calls look promising. Remember, ITM, we want to own EMC stock and get the most movement for our investment.....
Thursday, October 11, 2007
Keep an eye on...
JCP options...JCP reported a decrease in same store sales of 2.4% for the last 5 weeks due to unfavorable weather and housing conditions. Premarket trading is now 64 a share vs. 68 close yesterday. They also lowered 3q eps, but gave a positive outlook for holiday season shopping.
I expect them to hit a yearly low from this, down in the 60-61 range...if it hits 61, which would probably be tomorrow or monday, I'm pulling the trigger on an option for MAR 08. I am unsure of strike price yet, but it has had much resistance in the lower 60's so unless it breaks through resistance I see it bouncing up fairly quickly.
I expect them to hit a yearly low from this, down in the 60-61 range...if it hits 61, which would probably be tomorrow or monday, I'm pulling the trigger on an option for MAR 08. I am unsure of strike price yet, but it has had much resistance in the lower 60's so unless it breaks through resistance I see it bouncing up fairly quickly.
Tuesday, October 9, 2007
5 trades today
Bulls and bears both make money, pigs get slaughtered... today I was a bull and took much off the table. I opened two positions and closed three today, netting roughly $500. Let's recap the trades in order.
I opened the day by setting a limit for AAJU, oct 37.50 option for Alcoa at 1.90 a contract. This was coincidentally the low in the day. I put a sell in at 2.40...which it blew past to close at 2.80. Alcoa proceeded to miss earnings, so I'm glad I was able to pull in about $85 on 385 investment.
I opened a position today in BBW, OCT 17.50 BBWJW, at 1.40 a contract. The stock continued to drop at the end of the day, and I've lost about .30 a contract probably on them. This stock is heavily shorted, and I expect many shorts to cover prior to earnings report. They report next thursday, and I hope to drop two of them before earnings and play with the house's money on the last option.
I sold my EMC shares. Although I didn't want to do this as I believe EMC will continue to rise due to its stake in VMW, I need the money for the downpayment on the house and I still own a DITM call for march on EMC, EMCDC, which is up nearly 40 percent.
I also sold my AUY shares at close. I had a sell in for AUY at 12.25, but changed it to 12.15 at 3.59 pm. The sell hit and I netted nearly $180. I didn't want to sell this either, but again need funds for the house payment.
Watch for PEP reporting thur and GE reporting friday. I'm going to research options for these and offer insight into their earnings tomorrow.
I opened the day by setting a limit for AAJU, oct 37.50 option for Alcoa at 1.90 a contract. This was coincidentally the low in the day. I put a sell in at 2.40...which it blew past to close at 2.80. Alcoa proceeded to miss earnings, so I'm glad I was able to pull in about $85 on 385 investment.
I opened a position today in BBW, OCT 17.50 BBWJW, at 1.40 a contract. The stock continued to drop at the end of the day, and I've lost about .30 a contract probably on them. This stock is heavily shorted, and I expect many shorts to cover prior to earnings report. They report next thursday, and I hope to drop two of them before earnings and play with the house's money on the last option.
I sold my EMC shares. Although I didn't want to do this as I believe EMC will continue to rise due to its stake in VMW, I need the money for the downpayment on the house and I still own a DITM call for march on EMC, EMCDC, which is up nearly 40 percent.
I also sold my AUY shares at close. I had a sell in for AUY at 12.25, but changed it to 12.15 at 3.59 pm. The sell hit and I netted nearly $180. I didn't want to sell this either, but again need funds for the house payment.
Watch for PEP reporting thur and GE reporting friday. I'm going to research options for these and offer insight into their earnings tomorrow.
AA options...
I purchased two AAJU, Alcoa options before earnings today. Alcoa usually runs up prior to earnings, and I expect today to be no different. I payed a pretty high premium, but currently the low of the day. If FED minutes are bad I will sell. If the contract reaches 2.40 today (I bought mine at 1.90, this would be roughly a 25% gain for the day) I will sell. If neither of these two occur I plan to sell one option prior to closing and keep the other one through earnings.
I still have my five INTC options, and they are now priced around 1.02 per contract. This is pretty far down from where I purchased, but I'm not too worried. These options have been bouncing around and barring any horrendous news I only expect earnings to really move them. Let's see if it gets a run up prior to earnings...I believe they are next tuesday.
GRMN has taken off!!! I'm disappointed I didn't get another 10 shares...I had a limit order in at 94.50 last week but it only grazed upper 95's. Today GRMN is at 110. I'm also selling my EMC shares today so I can have sufficient money for downpayment on house. I'll sell for 21.50 or better, a 10% gain in a little less than a month. Remember I still have my may option, EMCDC, which I purchased for 5.00 a contract, now currently 7.00 a contract (40 % gain).
and last of all...go Alcoa.
I still have my five INTC options, and they are now priced around 1.02 per contract. This is pretty far down from where I purchased, but I'm not too worried. These options have been bouncing around and barring any horrendous news I only expect earnings to really move them. Let's see if it gets a run up prior to earnings...I believe they are next tuesday.
GRMN has taken off!!! I'm disappointed I didn't get another 10 shares...I had a limit order in at 94.50 last week but it only grazed upper 95's. Today GRMN is at 110. I'm also selling my EMC shares today so I can have sufficient money for downpayment on house. I'll sell for 21.50 or better, a 10% gain in a little less than a month. Remember I still have my may option, EMCDC, which I purchased for 5.00 a contract, now currently 7.00 a contract (40 % gain).
and last of all...go Alcoa.
Friday, October 5, 2007
listen to yourself
Don't hesitate, listen to yourself... scroll down to Sept. 17. I wanted to buy RIMM because I thought their earnings would be well. At the time RIMM was trading at around 88 dollars a share. I was looking at OCT 07 calls, at a strike price of 85 or 90. On this date calls for RIMM were going for 8.00 and 5.00, respectively. Today the same two calls are going for 27.50 and 23, after RIMM beat earnings again.
Start going on your instincts...listen to yourself. I missed out on a great return.
Start going on your instincts...listen to yourself. I missed out on a great return.
Roth changes, CRDN a buy
I have a new idea to changes in my Roth that I may implement in paper trades for awhile...and if it's successful implement into the Roth. DITM calls, just one per stock, for some high growth stocks. I'm talking about stocks like GRMN, GOOG, ACH, CEO...any stock within the high growth category. DITM will allow us to pay less of a premium for the stock and capture all the movement...allowing us to control 100 shares of stock at a much lower price. The reason I want to implement it in ROTH is because this is money I have put away that I do not intend to take out or need until I'm 60. I am now 23, so I have 37 years to recoup serious losses and when you are young is the time to be the most aggressive.
My Roth currently consists of USCGX, a large cap growth fund which year to date has performed well, and USSCX, a science and tech fund. I was considering dropping USSCX, giving me 4400 for the strategy. I want to buy two DITM calls for at least may 08 if not jan 09. With the remaining money I want a bank with a high dividend and moderate growth to baseline the portfolio. I think this combination will yield a better return than what I currently expect out of USSCX.
One of these calls may be CRDN. Watch out, CRDN is en fuego again. I owned this long ago at around 55...then sold it at 60. From there I watched it go to 83 then drop back down into the 70's. I grabbed 10 shares at 67 a few weeks back, expecting it to retreat more. CRDN does many things, but the biggest reason for my investment is their growth, particularly in the MRAP (Mine Resistant Ambush Protectant) II vehicles they are producing. These are uparmored vehicles that are used to help soldiers combat terrorism and are the biggest protectant against IED's. Now phase 1 of all MRAP I's is over, and CRDN received 0 contracts for MRAP I and bowed out of the race early to concentrate on MRAP II. Now CRDN has teamed up with Ideal Innovations and OSK, which I also own 40 shares of, in MRAP II...and has sent 2 vehicles to Aberdeen Proving Grounds. I have raised my reentry point for CRDN from 73 to 75...and I easily see CRDN breaking par by the end of the year. I would seriously consider a DITM for CRDN, but have yet to research which companies I want in my Roth revamp.
My Roth currently consists of USCGX, a large cap growth fund which year to date has performed well, and USSCX, a science and tech fund. I was considering dropping USSCX, giving me 4400 for the strategy. I want to buy two DITM calls for at least may 08 if not jan 09. With the remaining money I want a bank with a high dividend and moderate growth to baseline the portfolio. I think this combination will yield a better return than what I currently expect out of USSCX.
One of these calls may be CRDN. Watch out, CRDN is en fuego again. I owned this long ago at around 55...then sold it at 60. From there I watched it go to 83 then drop back down into the 70's. I grabbed 10 shares at 67 a few weeks back, expecting it to retreat more. CRDN does many things, but the biggest reason for my investment is their growth, particularly in the MRAP (Mine Resistant Ambush Protectant) II vehicles they are producing. These are uparmored vehicles that are used to help soldiers combat terrorism and are the biggest protectant against IED's. Now phase 1 of all MRAP I's is over, and CRDN received 0 contracts for MRAP I and bowed out of the race early to concentrate on MRAP II. Now CRDN has teamed up with Ideal Innovations and OSK, which I also own 40 shares of, in MRAP II...and has sent 2 vehicles to Aberdeen Proving Grounds. I have raised my reentry point for CRDN from 73 to 75...and I easily see CRDN breaking par by the end of the year. I would seriously consider a DITM for CRDN, but have yet to research which companies I want in my Roth revamp.
Wednesday, October 3, 2007
New portfolio
I'm looking at several stocks and options in a huge change of portfolio. Since I've been gone I have been disconnected and watched all stocks that I had hoped to buy on a pullback accelerate forward.
Optioins I'm now looking into before earnings and coincidentally before options expiry are BBW, INTC, DNA. I currently moved into a position of 5 contracts of INTC this morning for 1.15 a contract. If I can sell it today for 1.65 that is $250 profit for the day. I may keep 2 of these as I expect it to still run up prior to earnings. DNA I think is undervalued as a big pharma, and is partly owned by Roche Holdings, the company my wife works for. BBW is Build-a-bear workshop, and there is a high short float on the stock now. I'm looking to buy the ITM calls for BBW for oct, probably at 17.50 strike price.
As far as other companies I'm looking at long for options, JCP and TMA look like they should be bottoming out. I'm also going to switch from stock to options on AUY, SIRI, RAD, LVLT.
As for stock aquisitions, I just purchased GRMN (20 shares), and will buy more if it continues downward. I'm also looking at increasing my hold in CRDN if it gets to 73, I like KO or PEP at 54 or 70, and want to be in BAC at 50. I like BAC because of high dividend and I think their investment in CFC will be huge.
Yuan He is right on the money with all the Chinese stocks...I made a lot of money off of them but was hesitant on how high they would go and sold it all. He had the guts to stick them out and he made 33 percent last quarter, that is an awesome job. CEO looks good at 155 or so and ACH at around 65.
Also on screwups...my TSL call I had would now be worth about$2400...which I sold mine for $1200.
Optioins I'm now looking into before earnings and coincidentally before options expiry are BBW, INTC, DNA. I currently moved into a position of 5 contracts of INTC this morning for 1.15 a contract. If I can sell it today for 1.65 that is $250 profit for the day. I may keep 2 of these as I expect it to still run up prior to earnings. DNA I think is undervalued as a big pharma, and is partly owned by Roche Holdings, the company my wife works for. BBW is Build-a-bear workshop, and there is a high short float on the stock now. I'm looking to buy the ITM calls for BBW for oct, probably at 17.50 strike price.
As far as other companies I'm looking at long for options, JCP and TMA look like they should be bottoming out. I'm also going to switch from stock to options on AUY, SIRI, RAD, LVLT.
As for stock aquisitions, I just purchased GRMN (20 shares), and will buy more if it continues downward. I'm also looking at increasing my hold in CRDN if it gets to 73, I like KO or PEP at 54 or 70, and want to be in BAC at 50. I like BAC because of high dividend and I think their investment in CFC will be huge.
Yuan He is right on the money with all the Chinese stocks...I made a lot of money off of them but was hesitant on how high they would go and sold it all. He had the guts to stick them out and he made 33 percent last quarter, that is an awesome job. CEO looks good at 155 or so and ACH at around 65.
Also on screwups...my TSL call I had would now be worth about$2400...which I sold mine for $1200.
Tuesday, October 2, 2007
buying GRMN
Since my wedding I have been fairly disconnected from the stock market. I would get on after the market closed since Hawaii is 6 hours behind EST. Therefore, the market is open between 3:30 am and 10 am here. Anyways, I have no clue what's been going on in the market, and all the stocks I was looking to buy on a pull back have accelerated forward. I'm really in a bad position as I do not know what to put my money on...much research must be done once I get back home.
Yesterday I saw GRMN down on news that Nokia was buying Navteq, a key supplier of maps to GRMN. I think many anticipated GRMN to buyout NVT. I bought 20 shares of GRMN today at an average share price of 104. I think GRMN is a good long term investment as they are the leader of the GPS industry, and I don't think this will effect the outcome of this company. I had looked into options on them and they are fairly overpriced.
As I am closing on my house soon, I'm looking to free up more cash for the downpayment. Therefore, I'm looking to get SIRI options and sell the stock, and selling EMC stock as I have one option.
As for trades, I bought back a covered call and lost 140...and I sold OSK stock and OSK options and made about 180. That's it for now...one thing to look at long is JCP options.
Yesterday I saw GRMN down on news that Nokia was buying Navteq, a key supplier of maps to GRMN. I think many anticipated GRMN to buyout NVT. I bought 20 shares of GRMN today at an average share price of 104. I think GRMN is a good long term investment as they are the leader of the GPS industry, and I don't think this will effect the outcome of this company. I had looked into options on them and they are fairly overpriced.
As I am closing on my house soon, I'm looking to free up more cash for the downpayment. Therefore, I'm looking to get SIRI options and sell the stock, and selling EMC stock as I have one option.
As for trades, I bought back a covered call and lost 140...and I sold OSK stock and OSK options and made about 180. That's it for now...one thing to look at long is JCP options.
Wednesday, September 19, 2007
Fed cut, where we are at and why someone made a ton of money yesterday
Well, I got what I wanted only I wasn't around for the good stuff. I was contemplating buying several options yesterday for sept, which would have been super cheap and i would have made tons of money. However, I did not. I went out for lunch and then had a meeting and was back at the computer at 2:45pm after all the fun had been had. O well, at least the portfolio went up. For instance, you could have bought GE 40 calls for sept, for 25 dollars and cashed in at days end for 175.
I'm not quite sure where to invest after the rate cut. Everything is up...at prices that we look at and don't think are cheap. I've got a lot of thinking to do...
I'm not quite sure where to invest after the rate cut. Everything is up...at prices that we look at and don't think are cheap. I've got a lot of thinking to do...
Tuesday, September 18, 2007
BBY a winner too!!!
BBY suprised all today with a 55 cent EPS in the quarter. I called it and should not have sold yesterday; however, am not dissappointed with getting money yesterday. In the long run the strategy will work out better as stocks go up and down. Now what to do with the two calls I have? I still believe in BBY and think it is going much much higher, so for now I will hold onto them. Anyways, I called it, and I tried to tell everyone to jump aboard. Premarket it is at 46.90 (close of 44.54 yesterday). I anticipate to close higher due to fed rate cut and the rest of the market being able to trade the stock. The main factor for the purchase of options was the 5.5 B buyback, there is a floor to how low the stock can go and will go, so investing in it at the time I had said was a good time.
I will now begin to watch RIMM options. If it drops to the 82-83 range I will probably pull the trigger. Anyways, let's hope we get a 50 point basis cut because I need to lock into my rate soon for my house. Have a good day.
I will now begin to watch RIMM options. If it drops to the 82-83 range I will probably pull the trigger. Anyways, let's hope we get a 50 point basis cut because I need to lock into my rate soon for my house. Have a good day.
Monday, September 17, 2007
Options and Earnings
Well...looks like ADBE was a winner. I called it again, should have bought options in it. Instead, I went with BBY. Abnormally high put to call ratio today made me rethink the options. I sold 3 of the options right before close today, locking in a gain on those of about 18%. I tried to buy 3 puts, that way I would have both directions covered...but I don't have a good feeling about their earnings tomorrow.
My next options purchase will be of RIMM. I'm looking at OCT 07 calls and puts because RIMM reports in two weeks. RIMM definitely is Best of Breed and had a solid quarter last quarter. I'm not sure how much upside is left in RIMM, though. Anyways, I'm looking at 85 and 90 dollar calls, something on the upside.
I also have to dump my OSK calls by OCT, so whenever it gets another big jump I may sell at a loss. However, as of now I'm up $650 on options, so losing the OCT calls isn't a big deal.
My next options purchase will be of RIMM. I'm looking at OCT 07 calls and puts because RIMM reports in two weeks. RIMM definitely is Best of Breed and had a solid quarter last quarter. I'm not sure how much upside is left in RIMM, though. Anyways, I'm looking at 85 and 90 dollar calls, something on the upside.
I also have to dump my OSK calls by OCT, so whenever it gets another big jump I may sell at a loss. However, as of now I'm up $650 on options, so losing the OCT calls isn't a big deal.
Saturday, September 15, 2007
Week looking forward
Next week will be crazy, so my plan is to hedge myself against a big drop if FED dissapoints. Now on Friday I bought an EMC call, EMCDC, an April DITM call @ strike price 15. This will allow me to pull out of EMC stock, which I have 1900 vested in, on Monday. This will give us free cash on hand in case of a big drop. Then we can buy in little by little on the way down.
If everything goes up next week, then I will not buy anything and put my money aside into my high yield 6% account because I close on my house on or around OCT 30.
If we do have a big drop, I am looking at high yield dividend paying blue chips. A few that come to mind are PEP and BAC. I really like BAC, especially if I can get it around 48 price range. I would look to by PEP if it fell to 67. These two I would prefer to own their stock than their options.
Options for next week... my BBY has went up the past two days. Now I have 5 contracts...a lot invested. Now it's up 10%, but I expect it to rise at least 50 cents on monday. Now If I can get 4.50 out of the contract on monday...I will sell two. I anticipate more short covering on monday. I can lock in some profit and then hedge myself against a big fall on tuesday depending on how earnings turn out. AMAT is a longterm play, so I'm not concerned about it. If OSK decided to run up to 60 I would sell my options. I'd rather be in CRDN.
If everything goes up next week, then I will not buy anything and put my money aside into my high yield 6% account because I close on my house on or around OCT 30.
If we do have a big drop, I am looking at high yield dividend paying blue chips. A few that come to mind are PEP and BAC. I really like BAC, especially if I can get it around 48 price range. I would look to by PEP if it fell to 67. These two I would prefer to own their stock than their options.
Options for next week... my BBY has went up the past two days. Now I have 5 contracts...a lot invested. Now it's up 10%, but I expect it to rise at least 50 cents on monday. Now If I can get 4.50 out of the contract on monday...I will sell two. I anticipate more short covering on monday. I can lock in some profit and then hedge myself against a big fall on tuesday depending on how earnings turn out. AMAT is a longterm play, so I'm not concerned about it. If OSK decided to run up to 60 I would sell my options. I'd rather be in CRDN.
Thursday, September 13, 2007
BUY BBY options now!!! Portfolio update
Hello, booyah and skeedaddy. I haven't posted as much lately which is a direct result of being busy. I have a few updates of options trading that I can detail.
I sold my call the day TSL was up 6.00, thinking that it would drop. I sold the call for 12.00, making a 57% gain in nearly 3 weeks. It has dropped and I'm looking to buy it back, possibly between 9 and 10 as I do not think it will drop all the way to the 40's. I believe 43-45 range is reachable.
The day I sold the call I bought 2 puts on a different solar company, YGE. I bought the Sept 17.50, almost for play but we'll see how it works out today. If markets go down today I'll definitely look to sell as I was merely buying it for play purposes. I bought 2 contracts for .40 and look to sell for .70. Remember, I'm not an expert yet, and I don't really feel like risking a lot of money when I'm only testing the waters. However, I'm off to a good start.
Two plays that I would look to jump in on is BBY and ACH. First, BBY. Please buy the BBY MAR 08 Strike price 45 with me. It sells for 3.20 a contract right now. I currently have 2 calls and have an order to buy 3 more today. There are several reasons why you should buy this option. BBY initially disappointed the street on first quarter earnings on or around june 21. The street expected .50 gain, BBY gave them .39. However, since that time BBY has done much that will increase share price up through March. First, BBY is very cheap. It flaunts a 13.8 F P/E ratio and a 1.1 PEG via Scottrade, and also trades at its 52 week low. BBY announced Jun 27 that they are going to repurchase 5.5B. Their market cap is 20B. You do the math, that's 25%. They are going to repurchase 15% by FEB 08, which is perfect for the MAR call. Since their announcement the stock has went down about 8%. The CEO, Robert Willet is also buying shares right now. The last time he purchased shares of BBY was in April 05, on a similar decline. The stock during that time had went from 40 to 32, and then it jumped to 50 (not sure if this was prior to earnings statement or not). Also, the short float is around 17%, so there will be a run up prior to earnings as some shorts will cover. A solid earnings report should cause all other shorts to cover meaning a boost in price (shortsqueeze.com). BBY also reports on the day the FED should cut rates. This stock is easily worth 60 dollars and I can see it reaching that point by MAR. Let's all buy the option and make money together.
ACH, Chalco, or aluminum company of china...This thing bounces around so much you can make money on the volatility of the option. I'm waiting for this to go down to around between 50 and 55 and buy a call option around 60 or 65 forDEC or JAN (not sure which month they have options for). Anyways, it should be a good play.
As for my previous calls...ALTR call options would have been ok if you had sold prior to and after earnings, but JCG would have lost us big money. I would have done very well with SIRI, had I bought options when I wanted to at 2.80. Now it's trading at 3.47 as the proposed merger appears it will go through. I'm going to make no play on SIRI, I will only hold the shares until the merger happens.
Get into the buy...best buy that is. Do it today as shorts will begin covering tomorrow and monday. Also, cramer does next weeks outlook tonight and may mention it which will give us a buy in at a lower price.
I sold my call the day TSL was up 6.00, thinking that it would drop. I sold the call for 12.00, making a 57% gain in nearly 3 weeks. It has dropped and I'm looking to buy it back, possibly between 9 and 10 as I do not think it will drop all the way to the 40's. I believe 43-45 range is reachable.
The day I sold the call I bought 2 puts on a different solar company, YGE. I bought the Sept 17.50, almost for play but we'll see how it works out today. If markets go down today I'll definitely look to sell as I was merely buying it for play purposes. I bought 2 contracts for .40 and look to sell for .70. Remember, I'm not an expert yet, and I don't really feel like risking a lot of money when I'm only testing the waters. However, I'm off to a good start.
Two plays that I would look to jump in on is BBY and ACH. First, BBY. Please buy the BBY MAR 08 Strike price 45 with me. It sells for 3.20 a contract right now. I currently have 2 calls and have an order to buy 3 more today. There are several reasons why you should buy this option. BBY initially disappointed the street on first quarter earnings on or around june 21. The street expected .50 gain, BBY gave them .39. However, since that time BBY has done much that will increase share price up through March. First, BBY is very cheap. It flaunts a 13.8 F P/E ratio and a 1.1 PEG via Scottrade, and also trades at its 52 week low. BBY announced Jun 27 that they are going to repurchase 5.5B. Their market cap is 20B. You do the math, that's 25%. They are going to repurchase 15% by FEB 08, which is perfect for the MAR call. Since their announcement the stock has went down about 8%. The CEO, Robert Willet is also buying shares right now. The last time he purchased shares of BBY was in April 05, on a similar decline. The stock during that time had went from 40 to 32, and then it jumped to 50 (not sure if this was prior to earnings statement or not). Also, the short float is around 17%, so there will be a run up prior to earnings as some shorts will cover. A solid earnings report should cause all other shorts to cover meaning a boost in price (shortsqueeze.com). BBY also reports on the day the FED should cut rates. This stock is easily worth 60 dollars and I can see it reaching that point by MAR. Let's all buy the option and make money together.
ACH, Chalco, or aluminum company of china...This thing bounces around so much you can make money on the volatility of the option. I'm waiting for this to go down to around between 50 and 55 and buy a call option around 60 or 65 forDEC or JAN (not sure which month they have options for). Anyways, it should be a good play.
As for my previous calls...ALTR call options would have been ok if you had sold prior to and after earnings, but JCG would have lost us big money. I would have done very well with SIRI, had I bought options when I wanted to at 2.80. Now it's trading at 3.47 as the proposed merger appears it will go through. I'm going to make no play on SIRI, I will only hold the shares until the merger happens.
Get into the buy...best buy that is. Do it today as shorts will begin covering tomorrow and monday. Also, cramer does next weeks outlook tonight and may mention it which will give us a buy in at a lower price.
Tuesday, September 11, 2007
More Options
Ahh, back finally. Had several wedding planning stuff to do plus I've been trying to configure a wireless router. Not sure what I wrote on last, but I have purchased an AMAT option and two BBY options last week. This week I purchased one option for OSK yesterday. I'm looking to sell some of these options though. I was originally in for a quick gain, but somehow have lost sight of what I was doing it for. I'll be the first to admit I should have sold both my OSK call and TSL call when they were up, and I will not make the same mistake again. I should have sold the covered call for SIRI when it was at 3.40. I'm looking into selling covered's for DEC and buying callings at same strike price for MAR, that way I free up some money near xmas time.
Also looking into CFC although I do not want to get burned. This sector is horrible and timing them is even worse. Possibly tihnking about some bear call spreads though. I'd sell 10 contracts at a strike price and buy 10 contracts at a strike price slightly above it. I was reading about them yesterday but when I find out more on it I will repost.
Have a swell day.
Also looking into CFC although I do not want to get burned. This sector is horrible and timing them is even worse. Possibly tihnking about some bear call spreads though. I'd sell 10 contracts at a strike price and buy 10 contracts at a strike price slightly above it. I was reading about them yesterday but when I find out more on it I will repost.
Have a swell day.
Wednesday, September 5, 2007
Options recap
A quick, quick post here...looks like ALTR beat earnings but didn't move much. I didn't read the earnings post but I saw they upped buyback. I'll recap more on their earnings report tomorrow.
On JCG, their stock dropped $4 in extended trading. A new idea I thought of is if you expect a stock to make a big move, buy a put and a call at different strike prices. This could allow us to make some money.
As far as my options go, OSK went up up up today. It was nearly a 33% gain in the option today. TSLCI went down a 1.00 but I am still up about 60% on the option. Together, a total of 940 was invested in these two options, and if I sold tomorrow I could rake in $1450. That is a 50% gain in a week. OSK was up even while everything was down. I think they were two lucky calls.
I was reading up on SIRI today, and it is debatable whether the merger will go through this year or not. I am now commited for the long haul. I was thinking of selling calls on SIRI for DEC 07 and using the money to buy calls for MAR 08. The deal will for sure be done by then and I will have less vested after DEC. That should pay off the holiday shopping season bills.
Anyways, that's a quick recap in about 5 mins. Come back tomorrow for a more in depth look.
On JCG, their stock dropped $4 in extended trading. A new idea I thought of is if you expect a stock to make a big move, buy a put and a call at different strike prices. This could allow us to make some money.
As far as my options go, OSK went up up up today. It was nearly a 33% gain in the option today. TSLCI went down a 1.00 but I am still up about 60% on the option. Together, a total of 940 was invested in these two options, and if I sold tomorrow I could rake in $1450. That is a 50% gain in a week. OSK was up even while everything was down. I think they were two lucky calls.
I was reading up on SIRI today, and it is debatable whether the merger will go through this year or not. I am now commited for the long haul. I was thinking of selling calls on SIRI for DEC 07 and using the money to buy calls for MAR 08. The deal will for sure be done by then and I will have less vested after DEC. That should pay off the holiday shopping season bills.
Anyways, that's a quick recap in about 5 mins. Come back tomorrow for a more in depth look.
Earnings and options
This is my first earnings and options forecast...so needless to say I am quite nervous. This upcoming week has no earnings news, but the following week 17-21 does. This also happens to be options expiration week!!! So everything may be skewed but I'm looking at two stocks for this week...ADBE and GS.
ADBE (Adobe Systems) has had very good jumps in past earnings, is a software company, and tech companies do well towards year end. Cramer also recommended this one a few weeks ago, saying it usually heats up around the end of the year. Now I am only going to get into this one if we can get back down to the 40-41 range. So between now and Sept 17, when they report earnings, I will look to purchase an option (strike price 42.50 or 45, september or october) and dump it after earnings.
GS (Goldman Sachs), an investment firm that has gotten beat down due to subprime mess. We have three indicators before they report, which could drive the option up or down...sept 18, to rate cut or not to rate cut, that is the question...we will see. This could create a big move for GS. We also have two other major investment firms reporting first, LEH on tues and MS on wed. These two will give us a sense of sector movement for the investment side. I anticipate bad, but who knows...GS reports thur at 11 am, at which time I would sell the option before the end of the day because friday the options will be sold at share price.
Just something to keep an eye on, happy trading.
ADBE (Adobe Systems) has had very good jumps in past earnings, is a software company, and tech companies do well towards year end. Cramer also recommended this one a few weeks ago, saying it usually heats up around the end of the year. Now I am only going to get into this one if we can get back down to the 40-41 range. So between now and Sept 17, when they report earnings, I will look to purchase an option (strike price 42.50 or 45, september or october) and dump it after earnings.
GS (Goldman Sachs), an investment firm that has gotten beat down due to subprime mess. We have three indicators before they report, which could drive the option up or down...sept 18, to rate cut or not to rate cut, that is the question...we will see. This could create a big move for GS. We also have two other major investment firms reporting first, LEH on tues and MS on wed. These two will give us a sense of sector movement for the investment side. I anticipate bad, but who knows...GS reports thur at 11 am, at which time I would sell the option before the end of the day because friday the options will be sold at share price.
Just something to keep an eye on, happy trading.
Portfolio recap
Sept 4 was a good trading day. I watched my TSL call go up to 12.90, approximately a 75% gain in one week. I made three trades today in my quest to become more liquid before some big economic news... I sold 100 shares of my yamana gold for a small 4% gain in a month...and I sold YGE for an 11% gain in a month. Not great, better than money market though and now I have cash on hand for another trade. I bought a OCT 07 @ 60 call for OSK...I have a feeling they are about to breakout. The stock has been very stagnant since I have bought it, but I'm going on a hunch here. I'm looking to sell the call on any good news.
Now that I have cash on hand, not quite sure what to buy. Everything looks expensive now, although P/E is still less than the high we had in the market at 14000. I'm looking into high dividend, blue chip stocks like BAC. Although today is their ex dividend date, I may wait until record date to buy since I won't get the dividend anyway. I'm also looking at JCP and possibly a healthcare company.
The two stocks I was looking at last week for a quick options score on earnings were ALTR and even though I didn't mention it, JCG (J. Crew Group). Although I'm not sure where the calls were for JCG I'm sure they will beat earnings. I think I was going out on a limb and for a similar price to ALTR I could have got a $55 call for around $20. Now the ALTR calls, SEPT 07 @ 25 that I could have bought for .25 a contract are now going for .40 and JCG is going for 1.60...maybe JCG wasn't that low before. Anyways, both come out with earnings today so let's see if we can be profitable buying options the week before. If this can work I may start buyin 10 contracts, selling 5 the day before the earnings statement and seeing how the earnings come out. Also check back later today for next weeks earnings report on who I think will be earnings next week.
Now that I have cash on hand, not quite sure what to buy. Everything looks expensive now, although P/E is still less than the high we had in the market at 14000. I'm looking into high dividend, blue chip stocks like BAC. Although today is their ex dividend date, I may wait until record date to buy since I won't get the dividend anyway. I'm also looking at JCP and possibly a healthcare company.
The two stocks I was looking at last week for a quick options score on earnings were ALTR and even though I didn't mention it, JCG (J. Crew Group). Although I'm not sure where the calls were for JCG I'm sure they will beat earnings. I think I was going out on a limb and for a similar price to ALTR I could have got a $55 call for around $20. Now the ALTR calls, SEPT 07 @ 25 that I could have bought for .25 a contract are now going for .40 and JCG is going for 1.60...maybe JCG wasn't that low before. Anyways, both come out with earnings today so let's see if we can be profitable buying options the week before. If this can work I may start buyin 10 contracts, selling 5 the day before the earnings statement and seeing how the earnings come out. Also check back later today for next weeks earnings report on who I think will be earnings next week.
Tuesday, September 4, 2007
Options report
Alright alright, I know I called this one, but I said last week TSL was too cheap. So I bought a call last monday, of which I've talked about all week. TSL-CI for 7.60 a contract. It closed friday at 11.00 a contract, and this weekend I was told again I should sell it...but I believe TSL is better than FSLR, and is currently at a discount to FSLR now. Today, markets open and TSL is up to near 50. Although I should now sell, I feel I can get 20.00 for this contract. Maybe I am too bullish, but TSL has to reach 65 by MAR 08 for me to get 20.00 a contract out of it. I feel it can be done.
My SVNT calls are now worth more than what I sold them for. Thinking back on it I wish I had sold only one, that way I would still own 100 shares if the stock gains big. Now I'm just looking for time so I can rebuy one of the contracts.
I'm looking long here...but I feel EMC and AMAT have huge upside potential. I'd have to put up 5,000 to own them outright, so I'm looking to buy DITM calls for both, looking at JAN 2010 calls. This would only require about $2000, I'd buy the calls near cost (about a $400 cushion would be paid for time) and would get the most move per dollar invested. This is the BEST way as a VALUE investor to get into long term tech. I'm going to wait for a down day to purchase.
My SVNT calls are now worth more than what I sold them for. Thinking back on it I wish I had sold only one, that way I would still own 100 shares if the stock gains big. Now I'm just looking for time so I can rebuy one of the contracts.
I'm looking long here...but I feel EMC and AMAT have huge upside potential. I'd have to put up 5,000 to own them outright, so I'm looking to buy DITM calls for both, looking at JAN 2010 calls. This would only require about $2000, I'd buy the calls near cost (about a $400 cushion would be paid for time) and would get the most move per dollar invested. This is the BEST way as a VALUE investor to get into long term tech. I'm going to wait for a down day to purchase.
Friday, August 31, 2007
Big market move...which direction??
I was reading this article and found it quite interesting ( 'Bin Laden' options trading? ). It talks about unusual options activity and is trying to dispel rumors of current options activity and why they are happening. Many think that only a terrorist attack could turn a profit on this options activity, where a large market swing is needed to turn a profit. It also outlines how there were big puts in the airlines and insurance prior to 9/11, which I was unaware of. Insiders knew of an attack and made tons of money off of it. At the end they say this is a 'box spread' and is a simple interest rate trade. It may just be a coincidence that Sept 11 is between now and Sept 18, the day Bernanke is 'supposed' to cut rates...
Now from our peon point of view, I would think that the strange options activity would be due to the Fed cutting interest rates. However, we are just peons, we don't know what's really going on. If there is a rate cut, there will be a huge swing upward of confidence and an increase in the market. If we don't get one the market gets worried about a recession and pulls a lot out. However, the article talks that there needs to be a 50% change in the SPX 700 in order to turn a profit on these options...
How can this benefit us? Something is obviously up, insiders know something. I expect and want a rate cut on Sept 18 (I'm getting a mortgage, could use a lower rate coupled with high investment in the market). If we don't get one I anticipate a decrease in the market. So we can either make a lot of money or lose a lot of money. I'm going to counteract this by becoming more liquid. I want to get to a point where 20% of my investment assets are in a high yield money market account. This will give me flexibility for more buying if we get another dip, and if not I have money that I'm going to need and use to purchase my house that will sit in a high yield account.
So yes, I may sit this one out. Good luck, and trade on.
Now from our peon point of view, I would think that the strange options activity would be due to the Fed cutting interest rates. However, we are just peons, we don't know what's really going on. If there is a rate cut, there will be a huge swing upward of confidence and an increase in the market. If we don't get one the market gets worried about a recession and pulls a lot out. However, the article talks that there needs to be a 50% change in the SPX 700 in order to turn a profit on these options...
How can this benefit us? Something is obviously up, insiders know something. I expect and want a rate cut on Sept 18 (I'm getting a mortgage, could use a lower rate coupled with high investment in the market). If we don't get one I anticipate a decrease in the market. So we can either make a lot of money or lose a lot of money. I'm going to counteract this by becoming more liquid. I want to get to a point where 20% of my investment assets are in a high yield money market account. This will give me flexibility for more buying if we get another dip, and if not I have money that I'm going to need and use to purchase my house that will sit in a high yield account.
So yes, I may sit this one out. Good luck, and trade on.
Options before Earnings
Over the past few weeks, I've watch tech and internet companies come up big prior to earnings. Specifically I've predicted GRMN, PCLN, CSCO, NVT as companies that would produce good earnings. Usually, when companies have good earnings and good future earnings and growth forecast you see a jump in share price. Although I guessed correctly on those, I did not have any money at the time of their earnings releases to capture this jump.
Options may be a good way to capture this. Next week I feel ALTR will come out with a good earnings report. Their previous 5 reports have beat consensus. I'm looking at a cheap OTM call for near term, SEPT and OCT @ strike price 25. I didn't buy my previous play option, and am debating on purchasing these or not. For now I will make a mental note and see how I do. I would buy a SEPT 07 and OCT 07 strike price 25 call for $20 and $60 respectively. Only time will tell if I get the correct call on this one.
An update to my TSL call...currently I could sell the call I have for TSL (TSL-CI MAR 08 Strikeprice 45) for $11.00. That is a 50% gain in one week. That beats investing in China...(unless you are buying and selling daily on these 10 % changes). :)
Options may be a good way to capture this. Next week I feel ALTR will come out with a good earnings report. Their previous 5 reports have beat consensus. I'm looking at a cheap OTM call for near term, SEPT and OCT @ strike price 25. I didn't buy my previous play option, and am debating on purchasing these or not. For now I will make a mental note and see how I do. I would buy a SEPT 07 and OCT 07 strike price 25 call for $20 and $60 respectively. Only time will tell if I get the correct call on this one.
An update to my TSL call...currently I could sell the call I have for TSL (TSL-CI MAR 08 Strikeprice 45) for $11.00. That is a 50% gain in one week. That beats investing in China...(unless you are buying and selling daily on these 10 % changes). :)
Thursday, August 30, 2007
Long shot call
Ready for the next wave of solar? So far we have seen two peaks from most solar companies as they mostly move together. Well, I have found a good play and hopefully someone will take the bait. 07 OCT @ 20.00 for YGE...sell at .10 to .30 on Scottrade; however, where I seek to buy them at is on USAA (currently market has no sellers according to USAA). So why even buy these calls? First, it will cost a total of $20-$50, a small price to pay. I risk hardly anything and have a good chance to make some cash. I think this option trades at a DISCOUNT to TSL option. Even though YGE has never hit 20, I think with the solar momentum could push it over 20. Here is why...
Solar moves in groups, all following the same trend.
TSL share price cost three times more than YGE. Now some of that has to do with supply (more shares outstanding for YGE than TSL). However, YGE has outperformed TSL since YGE came public. If they follow the same trend, TSL OCT 07 @ 60 should be three times as much. However, THEY AREN'T! TSL is trading at 6 times the price. I have an order to buy two YGE calls OCT 07 @ 20.
Solar moves in groups, all following the same trend.
TSL share price cost three times more than YGE. Now some of that has to do with supply (more shares outstanding for YGE than TSL). However, YGE has outperformed TSL since YGE came public. If they follow the same trend, TSL OCT 07 @ 60 should be three times as much. However, THEY AREN'T! TSL is trading at 6 times the price. I have an order to buy two YGE calls OCT 07 @ 20.
China options
My friend suggests buying China...and I agree with him. Since I have done so I have reaped benefits, buying into CEO at 91, selling lots at 105 and 118. Recently I bought ACH (again recommended) at 45.80 then at 42. I sold 3 lots of this, ones at 49, 52, 66. Made lots of money. But the bad thing was I had to put up a lot of money. China is volatile market here. In the long run it is going up, due to valuation reasons between Yuan and dollar and Chinese Olympics. My friend says it will be a good market at least until the end of 08. Well want to get in on the fun and make money! Sure, lets get into the options then. We will put less money up and get a similar return. I currently think ACH is too high. So technically I should put it, but I'm a novice at options. I will wait for it to go down. I'm not sure which one to get into here, but I know since this month ACH has went from 34 to 66. Now I think it will pull back, wait awhile and go again. Here's why I'm so intrigued by this. If these companies continue to act nuts, why not buy a really high call, risking nothing, and getting everything. My point here is ACH-IL, a sept 60 call, was selling for about .30 cents on AUG 23. Today it will fetch $10.00. Investing in ACH from those times you get a 100% increase in value. Here you get a 1000/30, or a 3333% gain.
Yes it's easy to look back and say, if I would have done this, look at what I would have got. But Chinese options on ACH, CEO, PTR, CHL, BIDU could all be good. I'm looking to buy some contracts on a pull back.
Yes it's easy to look back and say, if I would have done this, look at what I would have got. But Chinese options on ACH, CEO, PTR, CHL, BIDU could all be good. I'm looking to buy some contracts on a pull back.
Playing Solar / Defense Companies
I had to leave work early yesterday to run some errands, so I did not get a chance to see the market close. It looks like it fared well, up 247. Solar stocks did well yesterday (I'm following YGE and TSL heavily, I think they are best of breed). I expect the solar stocks to go up for awhile then come back down. They are going to mimic tech of 99-01. They have been very cyclical of late...and with an increase I plan to sell a covered call on YGE for strike price 20 (not sure what month, looking at MAR 08 though). As prices retreat I will buy a call at strike price 15 for the same month. The difference will be pocket money. If I can time it right I'd like to sell my call on TSL and rebuy at a lower price. Bulls make money, bears make money, pigs get slaughtered...so call me a pig, but I fully expect a 100% return on TSL. Yesterday at close bidders were wanting 9.40 per contract. Had I sold, that's a 23% gain ($180) in 3 days. Try getting that by owning a stock! That is a good gain considering the stock only went up about 15%. Anyways, long solar because remember...we are in a global warming crisis. (kidding).
Since I am active reservist in the Indiana National Guard, I was trying to find ways to play the market on defense industries. Now pretty much any defense stock is a safe bet at least until NOV 08 when a democratic president will likely take over... but I specifically have my eyes set on the Mine Resistant Ambush Protectant (MRAP) vehicles. These are heavy duty uparmored vehicles that can withstand most IED's. While most contracts have came out for MRAP, MRAP II contracts will be awarded next year. Let me tell you, the Army needs these vehicles. And lawmakers will gain public support for the war by giving funds to these programs because it shows we are protecting our troops. How can we benefit? I currently have OSK, a late MRAP contender that never received any contracts. They have a PE ratio of around 13. They have been eliminated actually from MRAP I, but have teamed up with the company I think will make the most here, CRDN, for MRAP II. CRDN is the body armor company, making the sappy plates for the flack jackets we have in country (of which there will be orders for those within the next year). Now OSK will reap some benefit to this...I expect a 20% increase in their stock price in a year's time. Both of these companies are ahead of the curve, and are working on MRAP II instead of bothering with MRAP I. Don't forget that we will be supplying other countries with body armor and vehicles as well, specifically Iraq and Afganistan. How will these countries pay for these? They won't, your tax dollars will. Who benefits? All of us if we can invest in these companies. I'd suggest buying a 75 dollar call on CRDN at 5 or better for MAR 08 (AUE-CO). Look to buy these on down days.
Since I am active reservist in the Indiana National Guard, I was trying to find ways to play the market on defense industries. Now pretty much any defense stock is a safe bet at least until NOV 08 when a democratic president will likely take over... but I specifically have my eyes set on the Mine Resistant Ambush Protectant (MRAP) vehicles. These are heavy duty uparmored vehicles that can withstand most IED's. While most contracts have came out for MRAP, MRAP II contracts will be awarded next year. Let me tell you, the Army needs these vehicles. And lawmakers will gain public support for the war by giving funds to these programs because it shows we are protecting our troops. How can we benefit? I currently have OSK, a late MRAP contender that never received any contracts. They have a PE ratio of around 13. They have been eliminated actually from MRAP I, but have teamed up with the company I think will make the most here, CRDN, for MRAP II. CRDN is the body armor company, making the sappy plates for the flack jackets we have in country (of which there will be orders for those within the next year). Now OSK will reap some benefit to this...I expect a 20% increase in their stock price in a year's time. Both of these companies are ahead of the curve, and are working on MRAP II instead of bothering with MRAP I. Don't forget that we will be supplying other countries with body armor and vehicles as well, specifically Iraq and Afganistan. How will these countries pay for these? They won't, your tax dollars will. Who benefits? All of us if we can invest in these companies. I'd suggest buying a 75 dollar call on CRDN at 5 or better for MAR 08 (AUE-CO). Look to buy these on down days.
Wednesday, August 29, 2007
Today's trades, thoughts, ideas
Welcome to my blog. This blog will contain ideas on the markets, what I invest in, and why.
Yesterday was a active day for me. I made 4 trades throughout the day. I bought some 25 shares of YGE, a Chinese solar company, at 13.50 per share. This gives me 100, and I have a option strategy that I plan to put into action if I can purchase the options at a good price. I will map out this plan when i have done it. I sold two covered call options for 07 DEC @ 12.50 on SVNT for 3.60 apiece, netting $720. SVNT is a biotech company, and is currently in phase III of a gout drug. This gives me more cash up front to buy stock or options with. I'm currently not sure if I should have sold 2 options on that. I think I may buy one back if the share price approaches 11-12 per share. Regardless I used the money to purchase 100 shares of EMC at 19.30 per share. I feel EMC is undervalued given the spinoff of VMW (currently own 90% of VMWare), and since they sold the 10% are sitting on a huge pile of cash that they can use to buyback stock or aquire someone. I anticipate a buyback of stock, enhancing shareholder value. It expect a result similar to CY when they spun off SPWR. Yes, I'm using Cramer's idea, but I used to own EMC and I think things have turned the corner for them.
My last trade was LMT. I saw the market decreasing, and realizing I have a flight reservation payment, a rate lock for mortgage payment and my monthly bills...I sold LMT. I think LMT could have ran up longer, but I wanted to preserve some liquidity in case the market drops like it did two weeks ago. At that time I had no money to buy low.
My options strategy is going well, only two days young. I could sell my TSL call I bought on monday for 7.60 / contract today for 8.50/ contract. That's a 12 percent or so gain in 2 days. I expect TSL to approach 60 by next March and I can net a 100 percent gain though. I think TSL and YGE are the most undervalued solar companies, and I expect the solar industry to continue rising similar to tech in 99-01. When we start seeing splits, we start selling.
That's all for now. These were my thoughts from yesterday, Aug 28, 2007.
Yesterday was a active day for me. I made 4 trades throughout the day. I bought some 25 shares of YGE, a Chinese solar company, at 13.50 per share. This gives me 100, and I have a option strategy that I plan to put into action if I can purchase the options at a good price. I will map out this plan when i have done it. I sold two covered call options for 07 DEC @ 12.50 on SVNT for 3.60 apiece, netting $720. SVNT is a biotech company, and is currently in phase III of a gout drug. This gives me more cash up front to buy stock or options with. I'm currently not sure if I should have sold 2 options on that. I think I may buy one back if the share price approaches 11-12 per share. Regardless I used the money to purchase 100 shares of EMC at 19.30 per share. I feel EMC is undervalued given the spinoff of VMW (currently own 90% of VMWare), and since they sold the 10% are sitting on a huge pile of cash that they can use to buyback stock or aquire someone. I anticipate a buyback of stock, enhancing shareholder value. It expect a result similar to CY when they spun off SPWR. Yes, I'm using Cramer's idea, but I used to own EMC and I think things have turned the corner for them.
My last trade was LMT. I saw the market decreasing, and realizing I have a flight reservation payment, a rate lock for mortgage payment and my monthly bills...I sold LMT. I think LMT could have ran up longer, but I wanted to preserve some liquidity in case the market drops like it did two weeks ago. At that time I had no money to buy low.
My options strategy is going well, only two days young. I could sell my TSL call I bought on monday for 7.60 / contract today for 8.50/ contract. That's a 12 percent or so gain in 2 days. I expect TSL to approach 60 by next March and I can net a 100 percent gain though. I think TSL and YGE are the most undervalued solar companies, and I expect the solar industry to continue rising similar to tech in 99-01. When we start seeing splits, we start selling.
That's all for now. These were my thoughts from yesterday, Aug 28, 2007.
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