Slightly Better
Futures are slightly higher at this
hour, pointing to a slightly higher opening this morning. Currently, DJI futures
at the CBOT are trading about 15 points better. Over at the Merc, S&Ps are
about 3.0 points higher, and Nasdaq 100 futures are up about 2.5 points. Russell
2000 futures are showing a slight gain as well. In Europe, the FTSE 100 is
showing a 43.20 point, or 1.00% gain, the DAX is up 27.26 points, or .74%,
and the CAC 40 is up 31.04 points, or .92%. In Asia, the Nikkei finished with a
189.03 point loss, dropping 1.93%, and the Hang Seng fell 18.08 points, or .18%.
It is a very light week on the economic front, kicking off today with Leading
Indicators at 09:00 CDT. Expectations are for a 0.5% drop. The rest of the week
we have the June trade balance and treasury budget statement tomorrow, and
initial jobless claims Thursday.
The market is sitting in good technical shape after last week, but we always
have to factor time of year into the equation. The Nasdaq in particular had a
decent week for a change, finally putting in a higher high for the first time in
months. What we watch for now is meaningful follow through.
Volatility
Volatility was lower again Friday, but not too much. It has come a long
way in a short period of time and may be getting a bit stretched in here. On the
day, the VIX dropped .25 to 32.82, the VXN fell .59 to 50.65, and the QQV fell
1.90 to 41.94.
Trade Updates (8/16/02)
(
C |
Quote |
Chart |
News |
PowerRating) — The August 30 put portion of our December/August 30 put
calendar spread expired worthless. I am expecting Citigroup to get shat upon
shortly, so we are holding the December 30 puts in hope of selling the September
30 puts against the position at $1.00 or more, and rolling us into more of the
December/September 30 put calendar spread.
DJX — The remaining half of our August 86/90 call ratio spread settled at $1.88
where we were cashed out.
(
QQQ |
Quote |
Chart |
News |
PowerRating) — The August 26/28 ratio call spread
expired worthless (no loss).Â
QQQ — The August 26/28/30 “Christmas
Tree” expired worthless for a $.35 loss.
New Actions (New Recommendations)
None.
Working Orders (Old
Recommendations)
(
MMM |
Quote |
Chart |
News |
PowerRating) — Buy another 25% of the MMM October 110/120 put spread at $2.00.
Working Rolls/Adjustments
None.
Recap of open trades
Long-term
Reverse Collars
(
CIEN |
Quote |
Chart |
News |
PowerRating) — Long the January 2.5/5 reverse
collar at $.40 (25%).
Buy-writes
(
HAL |
Quote |
Chart |
News |
PowerRating) — Long the January 15 buy-write at $12.05 (100%).
Proxy buy-writes
(
DYN |
Quote |
Chart |
News |
PowerRating) — Long the January 15 calls at $3.20 — left over from proxy
buy-write (50%). Left for dead.
Complex Strategies
None.
Directional Positions
(
AMGN |
Quote |
Chart |
News |
PowerRating) — Long the January 30/40 put spread at $2.50 (50%).
(
BAC |
Quote |
Chart |
News |
PowerRating) — Long the January 50/60 put spread at
an average price of $2.50 (75%).
(
IBM |
Quote |
Chart |
News |
PowerRating) — Long the January 50/60 put spread at $2.00 (50%).
Short-term
Call Positions
None.
Call Spread Positions
DJX — Long the August 86/90 call ratio spread 1:2 for $.50 (50%). Sold half
at $2.00, 8/15/02, half settles to cash at $1.88 on 8/16/02.
(
QQQ |
Quote |
Chart |
News |
PowerRating) — Long the August 26/28 1:2 call ratio spread for even money (25%).
Expires worthless.
QQQ — Long the August 26/28/30 “Christmas tree” at $.35 (25%).
Expires worthless, $.35 loss.
Put Positions
None.
Spread Positions
(
C |
Quote |
Chart |
News |
PowerRating) — Long the December/August 30 put calendar spread at $1.70 (25%).
August puts expire worthless, now long the December puts at $1.70.
C — Long the December/September put calendar spread at $1.00 (25%).
C — Long the January/September put calendar spread at $1.20 (50%).
(
MMM |
Quote |
Chart |
News |
PowerRating) — Long the October 110/120 put spread at an average price of $2.87
(75%).
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 request. One or more of the contributors to these
commentaries may have a position in one or more of the securities mentioned.
- 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
carefully before trading options. To obtain the document, click on the OCC
link: https://www.theocc.com/publications/risks/riskchap1.jsp