BOJ Buys Dollars
Futures are a little better, mostly on follow
through from yesterday afternoon. The dollar has firmed up a bit this morning as
the BOJ intervened last night around the JPY 123.05 level, seeking to stem
yesterday’s dramatic gains. As of right now, the dollar is modestly higher, but
don’t look for intervention to work when the fundamentals (and more importantly,
trader psychology) have shifted against the dollar.
This is the last day of the month, and although I’m not as sure as I used to be
that the funds will paint the tape better, that is what we should prepare for.
On the economic front, Q1 revised non-farm productivity came in +8.4%, right on
the nose. More important reports coming later this morning include May Michigan
sentiment (final) at 08:50 CDT, expected to come in at 96, May Chicago PMI at
09:00 CDT, expected to come in at 54.5, and April factory orders at 09:00 CDT,
expected +0.3%. These reports will have a major impact on market direction, and
it might be best to sit on your hands until then.
Globally, the FTSE was up 0.6% to 5069, the DAX was up 1.1% to 4815. In Asia,
the Nikkei lost 0.1% to 11,764, and the Hang Seng dropped to 0.7% to 11,302.
On a rally today, we may be nipping in and buying some puts in
(
QQQ |
Quote |
Chart |
News |
PowerRating),
(
JNJ |
Quote |
Chart |
News |
PowerRating)
and
(
SMH |
Quote |
Chart |
News |
PowerRating).
Trade Updates (5/30/02)
(
MMM |
Quote |
Chart |
News |
PowerRating) — Yesterday we bought the October 110/120 put spread at
$2.80 (50%).
(
SMH |
Quote |
Chart |
News |
PowerRating) — Yesterday we sold half of our June 40 puts at $3.00.
New Actions (New Recommendations)
(
DJX |
Quote |
Chart |
News |
PowerRating) — Sell half of the June 100 puts at $3.70.
(
TGT |
Quote |
Chart |
News |
PowerRating) — Sell half of the June 40 puts at $1.70.
Working Orders (Old Recommendations)
(
CHIR |
Quote |
Chart |
News |
PowerRating) — Sell all CHIR July 50 calls at $1.00 to close.
(
MSFT |
Quote |
Chart |
News |
PowerRating) — Buy the June/July 50 put calendar spread (buy the July 50 puts,
sell the June 50 puts) at $.50 (50%).
Rolls/Adjustments
(
DYN |
Quote |
Chart |
News |
PowerRating) — Holders of the DYN January 15 call/June 20 call proxy
buy-write (long the January 15 calls, short the June 20 calls at $3.20),
buy the June 15 calls (to open) and sell the September 17.5 calls (to open)
for $1.00 credit (to you).
Recap of open trades
Long-term
Reverse Collars
None.
Buy-writes
(
AMR |
Quote |
Chart |
News |
PowerRating) — Long the August 25 buy-write at $22.00 (50%).
(
AOL |
Quote |
Chart |
News |
PowerRating) — Long the July 22.5 buy-write at
$19.40 (50%).
AOL — Long the October 20 buy-write at $16.30
(25%).
(
HAL |
Quote |
Chart |
News |
PowerRating) — Long the July 17.5 buy-write at
$14.25 (100%).
(
SEBL |
Quote |
Chart |
News |
PowerRating) — Long the August 27.5 buy-write at
$23.00 (50%).
Proxy buy-writes
DYN — Long the January 15/June 20 proxy buy-write at $3.20 (50%).
Complex Strategies
None.
Directional Positions
(
GM |
Quote |
Chart |
News |
PowerRating) — Long the January 60 puts at $3.30 (20%).
(
JNJ |
Quote |
Chart |
News |
PowerRating) — Long the January 60 puts at $3.30
(50%).
Short-term
Call Positions
(
CHIR |
Quote |
Chart |
News |
PowerRating) — Long the July 50 calls at $3.30 (50%).
Call Spread Positions
None.
Put Positions
(
BAC |
Quote |
Chart |
News |
PowerRating) — Long the August 65 puts at $1.50 (50%).
(
DJX |
Quote |
Chart |
News |
PowerRating) — Long the June 100 puts at $1.85
(50%).
(
MER |
Quote |
Chart |
News |
PowerRating) — Long the July 40 puts at $1.50
(50%).
(
SMH |
Quote |
Chart |
News |
PowerRating) — Long the June 40 puts at $1.75
(50%). Sold 25% (half of the 50%) at $3.00 on 5/30/02.
(
TGT |
Quote |
Chart |
News |
PowerRating) — Long the June 40 puts at $.85 (75%).
Spread Positions
(
MER |
Quote |
Chart |
News |
PowerRating) — Long the June/July 40 put calendar at $.50 (50%).
(
MMM |
Quote |
Chart |
News |
PowerRating) — Long the October 110/120 put spread
at $2.80 (50%).
Stops
None.
- 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