Europe Rallies, Boosts U.S. Futures
Even though the Ifo Institute’s index of western
German business confidence declined to an eight-month low, European stocks have
rallied as positive forecasts from several companies have boosted the indices.
Currently, the FTSE 100 is up 74.10 points, or 2.53%, the DAX is up 78.06 points,
or 2.72%, and the CAC 40 is up 90.53 points, or 3.30%.
Here in the US, DJI
futures are 92.0 better, S&P futures are up 10.00 points, and Nasdaq 100
futures are up 12.00 points. In Asia last night the Nikkei fell 156.23 points, or
1.68%, and the Hang Seng fell 72.77 points, or 0.79%. Interest rate futures are
lower this morning, the dollar is higher, crude futures are down about $0.25, and
gold futures are slightly lower.
It is critically important (for the bulls) that this rally hold today. They can
then begin working the “double bottom” story, and they might be able
to keep the market afloat into the quarter-end mark-up Monday. Shorts need to be
on their toes, as this is the perfect pump-up environment. On the other hand, if
today’s opening rally fails to hold, Thursday and Friday could be violently
ugly…
Volatility
Volatility was mostly unchanged yesterday. The options market is
beginning to accept the fact that the most likely direction is DOWN, and is
therefore no longer a surprise. Expect this to continue as investors withdraw
from the market place. The VIX rose .67 to 45.38, the VXN fell .45 to 59.85, and
the QQV rose .23 to 52.14.
Update:Â (09 /24/ 02)
(
AHC |
Quote |
Chart |
News |
PowerRating) — Sold the October 65/70 put spread at $3.00 to close the
position.
(
C |
Quote |
Chart |
News |
PowerRating) (Old) — Unwound our positions left from the put calendar spreads and
subsequent assignment of the September 30 puts:
- We sold the December 30 puts at $3.30, and the underlyer (C + 0432TAP.A +
.0887 TAP.B) at $29.37. This takes us out of our September/December 30 put
calendar spreads (long at $.975, 25%) at a price of $3.30 – ($30.00 -$29.37) =
$2.67. - We sold the January 30 puts at $3.60, and the underlyer (C + 0432TAP.A +
.0887 TAP.B) at $29.37. This takes us out of our September/January 30 put
calendar spreads (long at $1.20, 25%) at a price of $3.60 – ($30.00 -$29.37) =
$2.97.
(
MMM |
Quote |
Chart |
News |
PowerRating) (1) — Sold another 25% of the October 110/120 put spread at $4.00.
MMM (2) — Sold another 25% of the October 110/120 put spread at $5.00. Working
the balance at $6.00.
New Recommendations
(
BP |
Quote |
Chart |
News |
PowerRating) — Cancel the recommendation on the BP put calendar spread.
(
IBM |
Quote |
Chart |
News |
PowerRating) — Sell half of the January 50/60 put spread at $4.00.
(
KSS |
Quote |
Chart |
News |
PowerRating) –Sell half of the January 60/70 put spread at $6.00.
(
S |
Quote |
Chart |
News |
PowerRating) — Sell half of the January 35/45 put spread at $6.00.
Working Orders (Old Recommendations):
(
AMGN |
Quote |
Chart |
News |
PowerRating) — Sell half of the January 30/40 put spread at $5.00.
(
CCU |
Quote |
Chart |
News |
PowerRating) — Bid $1.50 for another 25% of the January 40 calls.
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%).
(
KSS |
Quote |
Chart |
News |
PowerRating) — Long the January 60/70 put spread at $3.00 (25%).
(
S |
Quote |
Chart |
News |
PowerRating) — Long the January 35/45 put spread at $3.00 (25%).
Short-term
Call Positions
(
CCU |
Quote |
Chart |
News |
PowerRating) (2) — Long the January 40 calls at $2.50 (25%).
Call Spread Positions
None.
Put Positions
None.
Spread Positions
(
AHC |
Quote |
Chart |
News |
PowerRating) — Long the October 65/70 put spread at $1.50 (25%). Sold at $3.00,
9/24/02.
(
C |
Quote |
Chart |
News |
PowerRating) — Long the December/September 30Â put calendar spread at $.975
(50%). Sold
half at $2.20 on 9/16/02. Sold remainder at $2.67, 9/24/02.
C — Long the January/September 30 put calendar spread at $1.20 (50%). Sold
half at $2.45 on 9/16/02. Sold remainder at $2.97, 9/24/02.
(
MMM |
Quote |
Chart |
News |
PowerRating) — Long the October 110/120 put spread at an average price of
$2.65 (100%).
Sold 25% at $4.00 on 9/17/02, sold 25% at $4.00 and 25% at $5.00,
9/24/02.
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