Micron Pumping Red
Red ink on the screen this morning on the back of
Micron’s
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PowerRating) poor earnings report last night. Earnings came in at -.52
versus an expected -.23 (although one-time charges have totally muddied the
water here), but revenues were off sharply, and the stock is down over $2.00
right now.
Currently, DJI futures are 33.0 lower, the S&Ps are 4.00 lower, and the Nasdaq
100 futures are 13.00 lower. In Europe, the FTSE 100 is 13.00 lower, the DAX is
42.46 points or 1.36%, and the CAC 40 is 21.78 points or .69% lower. In Asia,
the Nikkei continues to hemorrhage, losing 166.72 points or 1.96% overnight and
is now back on the lows. Dollar weakness is absolute death for Japan. The Hang
Seng fell 167.09 points or 1.72% also — that’s why they call it "beggar thy
neighbor." Interest rate futures are higher at the moment, the dollar is
slightly better against the majors, crude futures are lower by about $.30, and
gold futures are unchanged.
Volatility
Yesterday the VIX crept up .18 to 30.16, the VXN lost 1.70 to 48.14,
and the QQV dropped .88 to 41.80. Volatility is not a buy in here.
Update: (12/17/02)
DIA — Sold half of the December 80/84/86/90 call condor at $3.00.
New Recommendations
DIA — Sell the remaining December 80/84/86/90 call condors at $3.50 to
close.
Working Orders (Old Recommendations)
KSS — Sell half of our January 50/60 put spreads at $5.00 (to close).
PG — Buy another 25% of the April 75/85 put spreads (buying the April 85 puts,
selling the April 75 puts) at $2.00.
QQQ — Subscribers short the January 23/26 call spread at $1.50 (25%), leave an
order in the market to purchase the spread at $1.50 to close the trade.
Recap of open trades
Long-term
Reverse Collars
None.
Buy-writes
None.
Proxy buy-writes
DYN — long the January 15 calls at $3.20 — left over from proxy buy-write
(50%). Left for dead.
Complex Strategies
BGEN — Long the January 40/45 box (25%).
Directional Positions
None.
Short-term
Call Positions
HD — Long the January 25 calls at $2.00 (25%).
Call Spread Positions
DIA — Long the December 80/84/86/90 call condor at $1.20 (25%).
Sold half at $3.00 12/17/02.
QQQ — Short the January 23/26 call spread at $1.50 (25%).
Put Positions
None.
Put Spread Positions
BAC — Long the January 60/70 put spread at $2.90 (25%).
KSS — Long the January 50/60 put spread at $2.475 (50%).
PG — Long the April 75/85 put spread at $2.50 (25%).
Stops
KSS — Two consecutive closes
over $74.00.
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- Options trading involves substantial risk and
is not suitable for all Investors. - Also note that spread strategies involve
multiple commissions and are not risk-free. Most spreads must be done in a
margin account.
- Because of the importance of tax
considerations to all options transactions, the investor considering options
should consult with a tax advisor as to how taxes may affect the outcome of
contemplated options transactions.
- Supporting documentation for claims,
comparisons, recommendations, statistics or other technical data will be
furnished upon request. One or more of the contributors to these
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- It is important to note that the options
strategies discussed herein are not suitable to all investors. Options are
complex investment tools and involve substantial risk. Moreover spreading
strategies do not eliminate risk and involve multiple commissions.
- Note: All individuals must have read the ODD
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