Bob And Weave
The market is basically unchanged
this morning although the various sectors
are doing a lot of bobbing and weaving. Tech is firm, and the biotechs
have picked some positive comments (surprise!).
The market needs to hold last week’s breakouts in the DJI
(
$INDU |
Quote |
Chart |
News |
PowerRating) and COMP
(
$COMPQ |
Quote |
Chart |
News |
PowerRating), and the
S&P
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) and NDX
(
QQQ |
Quote |
Chart |
News |
PowerRating)s need to join the party. The biotech
stocks firming up should help
the NDX
(
$NDX.X |
Quote |
Chart |
News |
PowerRating).
The market needs to maintain momentum; any pause could
leave it at risk.
Updates:
(
BA |
Quote |
Chart |
News |
PowerRating) — BA has punched through 40.00, and since we are
short the Jan. ’02 40 calls as
part of our proxy buy-writes, we will have to monitor the
position. If BA starts to look as though it will hold 40.00 and move
up, we will roll the position “up and
out.” I am hoping we can “hang” in
the 40 area and let the Jan. ’02 calls rot.
Gamma Scalping:
(
GENZ |
Quote |
Chart |
News |
PowerRating) — Biotechs have received a “bump”
from some analysts this morning after
the index held the 200-day moving average. We will be looking to sell
in the 58.00 area against the 22-day moving average (the midpoint of
the Bollinger Bands). Today’s sigma’s: 53.54-57.03.
(
BBBY |
Quote |
Chart |
News |
PowerRating) — Today’s sigma’s: 32.85-34.76
Current Recommendations:
GENZ — Continue Gamma scalping the GENZ straddle.
BBBY — Continue Gamma scalping the BBBY straddle.
(
AMD |
Quote |
Chart |
News |
PowerRating) — On a pullback we are looking to buy the AMD
April 15 put/25 call reverse
collar for 0.00 (50%).
Rolls/Adjustments:
Traders long the
(
JDSU |
Quote |
Chart |
News |
PowerRating) Jan. 10 calls and short 2
units of the Jan. 7.5 puts, put
in a .05 bid to close the put side of the position.
Recap of open trades:
Long-term
Airline calendar spreads
(
AMR |
Quote |
Chart |
News |
PowerRating) Jan./Oct. 25 call calendar @ .75 — Oct.’s went
out worthless, holding the Jan.
25 calls. In with a chance!
(
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 |
Quote |
Chart |
News |
PowerRating) March 17.5/15 reverse collar (long the March
17.5 calls, short the March 15
puts) @ 1.50 credit average. Now a 75% position as a result
of today’s rolls.
Buy-writes
*
(
AMZN |
Quote |
Chart |
News |
PowerRating) Jan. ’03 10 buy-write @ 5.15 (100%) — hold.
*JDSU Jan. 12.5 buy-write @ 9.60 — hold.
Proxy buy-writes
BA Jan. ’03 35/Jan. ’02 40 call calendar @ 5.00 — hold.
BA Jan. ’03 40/Nov. ’01 40 call calendar @ 3.00 — hold.
Complex Strategies
JDSU — Long 1 unit of the Jan. 10 calls and short 2 units
of the Jan. 7.5 puts @ $1.00
credit.
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 $.60
credit (25%). 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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substantial risk. Moreover spreading strategies do not eliminate risk
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