Futures are weaker this morning with some
negative news beginning to appear in the semi sector (weak yesterday), and
negative articles in the Wall Street Journal about Citigroup
PowerRating). The Citigroup news is interesting because it appears that NY
state attorney general Spitzer is now focusing on Salomon Smith Barney and how
it won a lucrative bond underwriting role from AT&T when analyst Jack
Grubman suddenly switched to a “buy” recommendation on the stock…
Currently, DJI futures on the CBOT are 50.0 points lower, S&P futures are
5.00 points lower, and Nasdaq 100 futures are 11.50 points lower. Bond futures
are a shade higher, and both crude and the dollar are lower. Gold fixed at
$305.80 in London, up $.40. In Europe, the FTSE 100 is down 13.20 points, or
.30%, the DAX is lower by 35.06 points, or 90%, and the CAC 40 is down 32.39
points, or .90%. In Asia, the Nikkei rose 53.43 points, or .54%, while the Hang
Seng dropped 178.31 points, or 1.71%. South America is a bit lower at the
Lately buyers of lower openings have been rewarded later in the day. Watch for
when this doesn’t happen any more (today?), that will signal a tone change, and
with volatility reasonable once again, time to start to reel in some puts.
Implied volatility continued to slide yesterday and is now getting on the cheap
side. The VIX is clinging to 30.0, and a rally tomorrow would probably take it
below that level. On the day, the VIX lost .67 to 30.96, the VXN fell 1.11 to
45.00, and the QQV dropped 1.38 to 38.20.
Not cheap, but “inexpensive.”
Trade Updates (8/22/02)
New Actions (New Recommendations)
None. Watching retailers for shorts, semis too. Rollups soon.
Working Orders (Old Recommendations)
Recap of open trades
Call Spread Positions
C — Long the December/September 30 put calendar spread at $1.00 (25%).
C — Long the January/September 30 put calendar spread at $1.20(50%).
- 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
- 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