Lower Opening
Futures are still lower at the moment. DJI
futures are down 47.0 points, S&P futures are offered 5.40 lower, and the Nasdaq
100 futures are bid 8.50 lower. In Europe, the FTSE 100 is down 69.40 points or
1.70%, the DAX is lower by 103.83 or 3.33%, and the CAC 40 is down 63.57 points
or 2.07%. In Asia, the Nikkei lost 26.25 points or .31%, and the Hang Seng
gained a fraction. Bond futures are unchanged, the dollar is higher against the
major foreign currencies, crude and gold futures are both slightly lower.
There are no economic reports out today, but Herr Bubblemeister will be
testifying to the Joint Economic Committee at 09:00 CST, keep your eyes out for
that one. It will be interesting to hear why he thought 50bp was necessary last
week. On the corporate front, Wal-Mart came in a penny better than expected, but
was cautious in their outlook. AMAT and Kohl’s come out after the close.
Volatility
Yesterday, implied volatilities slipped on the back of a generally
firmer market. The VIX fell .72 to 35.39, the VXN lost .46 to 55.25, but the QQV
gained .06 to 47.75. Tech volatilities will probably remain firm into the DELL
earnings. Vol traders should sell into that strength.
Update: (11/12/02)
Nothing.
New Recommendations
QQQ — Subscribers short the January 23/26 call spread at $1.50 (25%),
leave an order in the market to purchase the spread at $1.50 to close the trade.
Working Orders (Old Recommendations)
CIEN — Buy the January 2.5 puts at $.05 to close.
WAG — Sell half the January 30/35 put spread at $3.00, half at $4.00 to close.
Recap of open trades
Long-term
Reverse Collars
CIEN — Long the January 2.5/5 reverse collar at
$.40 (25%).
Buy-writes
HAL — Long the January 15 buy-write at $12.05 (100%).
Proxy buy-writes
DYN — Long the January 15 calls at $3.20 — left over from proxy buy-write
(50%). Left for dead.
Complex Strategies
None.
Directional Positions
None.
Short-term
Call Positions
None.
Call Spread Positions
BGEN — Long the January 40/45 call spread at $1.00 (25%).
DIA — Long the November 80/84/85/89 call condor at $1.50 (25%).
DIA — Long the December 80/84/86/90 call condor at $1.20 (25%).
QQQ — Short the January 23/26 call spread at $1.50 (25%).
Put Positions
None.
Put Spread Positions
BAC — Long the January 60/70 put spread at $2.90 (25%).
KSS — Long the January 50/60 put spread at $3.00 (25%).
WAG — Long the January 30/35 put spread at $1.00 (50%).
Stops
None.
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- 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