It’s Month/Quarter End…
What are the weasels (mutual funds) going to try to do this time? I hate trading
on the last day of the month except for some short-term daytrading in stocks
that I think these idiots are going to try to mark up. The dollar is hitting new
lows against all major currencies this morning, and the euro got close enough to
par to smell it. This will probably trigger some selling in the heavily foreign-held
DJI stocks.
To be honest with you, unless you have a serious axe to grind or fire to put
out, I’d consider taking the day off today, trading Monday and Tuesday of next
week, and don’t bother coming back until July 8th — just in time for (lack of)
earnings season.
Currently, DJI futures at the CBOT are down 21 points, S&Ps and Nasdaq 100
futures at the CME are down 2.0 points and 5.0 points, respectively, and the
Russell 2000 futures are about 4.0 points lower. In Europe, the FTSE gained 1.6%
at 4614 and the DAX rose 1.1% to 4306. In Asia, the Nikkei was up 3.5% to
10,621, and the Hang Seng rose 0.8% to 10,598.
In corporate news, the accounting scandal du jour is Xerox
(
XRX |
Quote |
Chart |
News |
PowerRating), where an
internal audit revealed that the company "may have improperly booked
revenue." Shocking, absolutely shocking (yawn). Until these people start
doing some hard prison time, this will continue.
Volatility
On the rally, volatility got hurt yesterday. The VIX dropped 2.31
points to close at 30.02, the VXN lost 1.01, closing at 63.13, and the QQV lost
3.67 to close at 52.46. There are rumors that some short volatility hedge funds
may have gotten beat up over the last month, so volatility may not come down as
fast as it went up.
Trade Updates (6/27/02)
(
IWM |
Quote |
Chart |
News |
PowerRating) — We bought a 25% position in the IWM November 80/90 put
spread at $3.00. We will add on strength.
(
MER |
Quote |
Chart |
News |
PowerRating) — We sold our MER July 37.5 puts at $1.20 to close the position at a
$.20 loss.
New Actions (New Recommendations)
(
BAC |
Quote |
Chart |
News |
PowerRating) — Continue to offer half of the August 70 puts at $5.00.
Working Orders (Old Recommendations)
(
CHIR |
Quote |
Chart |
News |
PowerRating) — Sell all CHIR July 50 calls at $1.00 to close.
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).
(
SEBL |
Quote |
Chart |
News |
PowerRating) — For those long the SEBL August 27.5 buy-write: Buy the SEBL
August 27.5 calls (to close) and sell the November 20 calls (to open) for $2.00
credit.
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 October 17.5 buy-write at
$13.25 (100%).
(
SEBL |
Quote |
Chart |
News |
PowerRating) — Long the August 27.5 buy-write at
$23.00 (50%).
Proxy buy-writes
(
DYN |
Quote |
Chart |
News |
PowerRating) — Long the January 15/June 20 proxy buy-write at $3.20 (50%).
Complex Strategies
None.
Directional Positions
(
AMGN |
Quote |
Chart |
News |
PowerRating) — Long the January 30/40 put spread at $3.00 (25%).
(
JNJ |
Quote |
Chart |
News |
PowerRating) — Long the January 50 puts at $1.70 credit (37.5%).
(
TGT |
Quote |
Chart |
News |
PowerRating) — Long the January ’03 35 puts at $2.40 (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 70 puts at $2.60 (100%). Sold 10% at
$5.00.
(
MER |
Quote |
Chart |
News |
PowerRating) — Long the July 37.5 puts at $1.40 (25%). Sold at $1.20.
Spread Positions
(
IWM |
Quote |
Chart |
News |
PowerRating) — Long the November 80/90 put spread at $3.00 (25%).
(
MMM |
Quote |
Chart |
News |
PowerRating) — Long the October 110/120 put spread at $2.80 (100%).
(
SMH |
Quote |
Chart |
News |
PowerRating) — Long the July/August 32.5 put spread at $.70 (25%).
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.