Lower Open
Futures are weaker this morning with some
negative news beginning to appear in the semi sector (weak yesterday), and
negative articles in the Wall Street Journal about Citigroup
(
C |
Quote |
Chart |
News |
PowerRating) and
AOL
(
AOL |
Quote |
Chart |
News |
PowerRating). The Citigroup news is interesting because it appears that NY
state attorney general Spitzer is now focusing on Salomon Smith Barney and how
it won a lucrative bond underwriting role from AT&T when analyst Jack
Grubman suddenly switched to a “buy” recommendation on the stock…
Currently, DJI futures on the CBOT are 50.0 points lower, S&P futures are
5.00 points lower, and Nasdaq 100 futures are 11.50 points lower. Bond futures
are a shade higher, and both crude and the dollar are lower. Gold fixed at
$305.80 in London, up $.40. In Europe, the FTSE 100 is down 13.20 points, or
.30%, the DAX is lower by 35.06 points, or 90%, and the CAC 40 is down 32.39
points, or .90%. In Asia, the Nikkei rose 53.43 points, or .54%, while the Hang
Seng dropped 178.31 points, or 1.71%. South America is a bit lower at the
moment.
Lately buyers of lower openings have been rewarded later in the day. Watch for
when this doesn’t happen any more (today?), that will signal a tone change, and
with volatility reasonable once again, time to start to reel in some puts.
Volatility
Implied volatility continued to slide yesterday and is now getting on the cheap
side. The VIX is clinging to 30.0, and a rally tomorrow would probably take it
below that level. On the day, the VIX lost .67 to 30.96, the VXN fell 1.11 to
45.00, and the QQV dropped 1.38 to 38.20.
Not cheap, but “inexpensive.”
Trade Updates (8/22/02)
None.
New Actions (New Recommendations)
None. Watching retailers for shorts, semis too. Rollups soon.
Working Orders (Old Recommendations)
None.
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
None.
Put Positions
None.
Spread Positions
(
C |
Quote |
Chart |
News |
PowerRating) — Long the December/August 30 put calendar spread at $1.70 (25%).
August puts expired worthless, now long the December puts at $1.70.
C — Long the December/September 30 put calendar spread at $1.00 (25%).
C — Long the January/September 30 put calendar spread at $1.20(50%).
(
MMM |
Quote |
Chart |
News |
PowerRating) — Long the October 110/120 put spread at an average price of $2.65
(100%).
Stops
None.
|
Click
|
- 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