‘Sell The News’ Opportunity
Futures are slightly lower at this hour. The
(
AMAT |
Quote |
Chart |
News |
PowerRating) earnings last night gave the markets an after-hours spike, but it
looks like it was a “sell the news” opportunity. Deutsche downgraded
AMAT this morning, citing slowing DRAM momentum and valuation concerns.
The stock is now trading right around yesterday’s close after trading higher
last night. It could be a profit-taking day today.
Economic Numbers
It was a busy morning on the economic front. CPI, both headline and core, came
in slightly higher than expected. April CPI came in at +0.5% vs. consensus
expectations of +0.4%, and the core (ex food and energy) came in at +0.3%
vs. consensus expectations of +0.2%. Business Inventories dropped 0.3% vs.
expectations of a 0.2% drop. April Industrial Production rose 0.4%, right on the
nose, and Capacity Utilization also came in right on the nose at 75.5%.
Sideways to lower today, a gradual ramp up into
(
DELL |
Quote |
Chart |
News |
PowerRating) earnings tomorrow is
a scenario that makes sense to me. On another note, I found out this morning
that I was filled on my bid to buy the DJX May 100 puts at $.10 yesterday. This
leaves us long the DJX June 100 puts at an effective cost of $1.85.
Volatility
Yesterday the VIX dropped 1.76 to 21.75. The VXN fell another 1.78 to 44.34, and
the QQV slid 2.14 to 38.58. Look for a bounce in volatility today.
Trade Updates (5/14/02)
DJX — We covered the short May 100 put portion of our May/June 100 put calendar
spread yesterday at $.10 (late fill — I just got it now). This leaves us long
the DJX June 100 puts at an effective cost of $1.85.
I see some retailers have gotten upgrades today. Make sure you have a bid in the
market for another 25% of those TGT June 40 puts!
New Actions (New Recommendations)
(
TGT |
Quote |
Chart |
News |
PowerRating)Â — Buy another 25% of the TGT June 40 puts at $.60 when
TGT trades into the $43.00 – $43.70 “kill box.”
Working Orders (Old Recommendations)
(
CHIR |
Quote |
Chart |
News |
PowerRating) — Sell all CHIR July 50 calls at $1.00 to close.
(
MLNM |
Quote |
Chart |
News |
PowerRating) — Sell all MLNM May 25 calls at $.50 to close.
(
MSFT |
Quote |
Chart |
News |
PowerRating) — Buy the June/July 50 put calendar spread (buy the July 50 puts,
sell the June 50 puts) at $.50 (50%).
Rolls/Adjustments:
(
DYN |
Quote |
Chart |
News |
PowerRating) — Holders of the DYN January 15 call/June 20 call proxy
buy-write (long the January 15 calls, short the June 20 calls at $3.20),
buy the June 20 calls (to close) and sell the September 17.5 calls (to open) for
$1.25 credit (to you).
(
HAL |
Quote |
Chart |
News |
PowerRating) — Holders of the HAL July 20 buy-write, work to sell the HAL July
17.5/20 call spread at $1.00. This will “roll” the position into the
July 17.5 buy-write.
Recap of open trades:
Long-term
Reverse Collars
None.
Buy-writes
(
AMR |
Quote |
Chart |
News |
PowerRating) — Long the August 25 buy-write at $22.00 (50%).
(
AOL |
Quote |
Chart |
News |
PowerRating) — Long the July 22.5 buy-write at
$19.40 (50%).
AOL — Long the October 20 buy-write at $16.30
(25%).
(
HAL |
Quote |
Chart |
News |
PowerRating) — Long the July 20 buy-write at $15.00
(50%).
HAL — Long the July 17.5 buy-write at $14.50
(50%).
(
SEBL |
Quote |
Chart |
News |
PowerRating) — Long the August 27.5 buy-write at
$23.00 (50%).
Proxy buy-writes
(
DYN |
Quote |
Chart |
News |
PowerRating) — Long the January 15/June 20 proxy buy-write at $3.20 (50%).
Complex Strategies
None.
Directional Positions
(
JNJ |
Quote |
Chart |
News |
PowerRating) — Long the January 60 puts at $3.30
(50%).
Short-term
Call Positions
(
APC |
Quote |
Chart |
News |
PowerRating) — Long the May 55 calls at $3.65 (100%).
(
CHIR |
Quote |
Chart |
News |
PowerRating) — Long the July 50 calls at $3.30
(50%).
(
CPN |
Quote |
Chart |
News |
PowerRating) — Long the May 15 calls at $.40 (50%).
(
MLNM |
Quote |
Chart |
News |
PowerRating) — Long the May 25 calls at $2.40
(50%).
Call Spread Positions
None.
Put Positions
(
TGT |
Quote |
Chart |
News |
PowerRating) — Long the June 40 puts at $1.10 (37.5%).
Spread Positions
(
BAC |
Quote |
Chart |
News |
PowerRating) — Long the August/May 65 put calendar at $1.50 (50%).
DJX — Long the May/June100 put calendar at an
effective price of $1.75 (“roll” on 5/9/02). Covered May 100 puts at
$.10 on 5/14/02. This now puts us long the June 100
puts again at an effective cost of $1.85.
(
MER |
Quote |
Chart |
News |
PowerRating) — Long the June/July 40 put calendar
at $.50 (50%).
(
SMH |
Quote |
Chart |
News |
PowerRating) — Long the May/June 40 put calendar at
an effective price of 1.75 (“roll” on 5/9/02).
Stops
None.
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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