Alternative Energy Powers Ahead
Upgrade cluster bombs are falling
all around us (they must really need to
get out).
(
MSFT |
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Chart |
News |
PowerRating),
(
ORCL |
Quote |
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News |
PowerRating) and
(
SAP |
Quote |
Chart |
News |
PowerRating) lead the list, and these issues
are pulling the market higher.
Gilead Sciences
(
GILD |
Quote |
Chart |
News |
PowerRating) also picked up a bump.
Today Energy Secretary Spencer Abraham is going to unveil
an alternative fuel development
program backed by government funding. In front of this, the
Alternative Energy sector had a huge day on huge volume. Put these
on your screen:
(
PLUG |
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News |
PowerRating),
(
FCEL |
Quote |
Chart |
News |
PowerRating),
(
BLDP |
Quote |
Chart |
News |
PowerRating),
(
HYGS |
Quote |
Chart |
News |
PowerRating) and
(
IMCO |
Quote |
Chart |
News |
PowerRating). We
will be looking for pullback/entries in this area.
Updates:
*
(
TLAB |
Quote |
Chart |
News |
PowerRating) — We bought the March 15 put/22.5 call
collar for $.50 (25%) This
"rolls" another 25% of the reverse collar position into a
bull call spread at a $1.00 credit (to us).
*
(
AMD |
Quote |
Chart |
News |
PowerRating) — Close but no luck yet on the April 25
call/April 15 put reverse collar for $0.00. We will try again tomorrow.
A couple of future possibilities:
(
QCOM |
Quote |
Chart |
News |
PowerRating) looks like it might be searching for a toehold
somewhere down here. It has
rallied all day after being downgraded. We like to buy QCOM near
40.00 and sell it near 60.00, so we are being patient and waiting for
a dip down to establish a bullish position.
(
IMCL |
Quote |
Chart |
News |
PowerRating) — Looking at a May bull spread, possibly
ratioed.
Gamma Scalping
(
GENZ |
Quote |
Chart |
News |
PowerRating) — Today’s sigma’s: 51.72 – 55.09.
(
BBBY |
Quote |
Chart |
News |
PowerRating) — Today’s sigma’s: 33.54-35.49.
Current Recommendations:
GENZ — Continue Gamma scalping the GENZ straddle.
BBBY — Continue Gamma scalping the BBBY straddle.
AMD — On a pullback, we are looking to buy the AMD April
15 put/25 call reverse collar
for 0.00 (50%).
Rolls/Adjustments:
TLAB — TLAB is up against resistance, and we are going to
"roll" a little bit
more of our reverse collar into a bull call spread. Buy the March 15
put/March 22.5 call collar (buy the March 15
puts, sell the March 22.5 calls)
for $.50 debit (we pay). Do another 25%. This will flip 25% of our long March
17.5 call/short March 15 put reverse
collar into a bull call spread for a $1.00 credit!
Recap of open trades:
Long-term
Airline calendar spreads
(
AMR |
Quote |
Chart |
News |
PowerRating) — Sold 50% of the Jan. 25 calls for $1.50,
leaving us long the balance for
free.
(
UAL |
Quote |
Chart |
News |
PowerRating) Jan./Oct. 25 call calendar @ .70 — Oct.’s went
out worthless, holding Jan. 25
calls, looking like rip-ups.
Reverse Collars
(
AWE |
Quote |
Chart |
News |
PowerRating) Jan. 12/15 reverse collar (long the Jan. 15
calls, short the Jan. 12.5 puts)
@ .05 average. Stop below. Note: We have covered the Jan.
12.5 puts at $.05. This effectively leaves us long the Jan. 15 calls at $.10.
TLAB March 17.5/15 reverse collar (long the March 17.5
calls, short the March 15 puts)
@ 1.50 credit average (50%).
Buy-writes
*
(
AMZN |
Quote |
Chart |
News |
PowerRating) Jan. ’03 10 buy-write @ 5.15 (100%) — hold.
*
(
JDSU |
Quote |
Chart |
News |
PowerRating) Jan. 12.5 buy-write @ 9.60 — hold.
Proxy buy-writes
(
BA |
Quote |
Chart |
News |
PowerRating) Jan. ’03 35/May 45 call calendar @ $4.75 — hold.
BA Jan. ’03 40/May 45 call calendar @ $2.75 — hold.
Complex Strategies
JDSU — Long 1 unit of the Jan. 10 calls at $.90 credit.
(Due to "roll.")
GENZ — Long the Jan. 60 straddle at $5.95 average cost
(100%) — hold.
BBBY — Long the Jan. 35 straddle at $2.85 (100%) — hold.
Short-term
Call Positions
(
WCOM |
Quote |
Chart |
News |
PowerRating) Jan. 12.5 calls @ 2.40 — hold. Stop below.
Call Spread Positions
(
DYN |
Quote |
Chart |
News |
PowerRating) — Long the March 30/40 1:2 call ratio spread @
$1.50 (100%) — hold.
TLAB — Long the March 17.5/22.5 call spread at $.80
credit average (50%). Note:
This spread is a result of a reverse collar roll.
Put Positions
(
TGT |
Quote |
Chart |
News |
PowerRating) — Long the Jan. 35 puts @ 1.15 (100%) — hold.
(
WMT |
Quote |
Chart |
News |
PowerRating) — Long the Jan. 55 puts @ 2.35 (50%) — hold.
Put Spread Positions
(
AZO |
Quote |
Chart |
News |
PowerRating) — Long the March 55/65 put spread @ 2.125
(100%) — hold.
(
BBY |
Quote |
Chart |
News |
PowerRating) — Long the Jan. 60/70 put spread @ 3.00 (50%)
— hold.
STOPS
WCOM: Stop @ 13.95 close only.
TLAB: Stop @ 11.95 close only.
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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