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 |
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and COMP
(
$COMPQ |
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, and
the
S&P
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$SPX.X |
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and NDX
(
QQQ |
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s need to join the party. The biotech
stocks
firming up should help
the NDX
(
$NDX.X |
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.

The market needs to maintain momentum; any pause could
leave it at risk.

Updates:


(
BA |
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— 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 |
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— 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 |
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— 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 |
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— 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 |
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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 |
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Jan./Oct. 25 call calendar @ .75 — Oct.’s went
out worthless,
holding the Jan.
25 calls. In with a chance!


(
UAL |
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Jan./Oct. 25 call calendar @ .70 — Oct.’s went
out worthless,
holding Jan. 25
calls, looking like rip-ups.

Reverse Collars


(
AWE |
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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 |
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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 |
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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 |
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Jan. 12.5 calls @ 2.40 — hold. Stop below.

Call Spread Positions


(
DYN |
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— 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 |
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— Long the Jan. 35 puts @ 1.15 (100%) — hold.


(
WMT |
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— Long the Jan. 55 puts @ 2.35 (50%) — hold.

Put Spread Positions


(
AZO |
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— Long the March 55/65 put spread @ 2.125
(100%) — hold.


(
BBY |
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— 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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