Lower, Slower
Futures are slowly sliding this morning,
indicating a lower opening into what might be a "digestive" day — slow and
rangebound. Currently, DJI futures are down 29.0, S&P futures are lower by 1.50,
and the Nasdaq 100 futures are down about 5.00. In Europe, the FTSE 100 is 40.30
points or .99% lower, the DAX is down 35.48 points or 1.12%, and the CAC 40 is
down 41.61 points or 1.34%. In Asia, the Nikkei took a hit, dropping 229.67
points or 2.57%, and the Hang Seng slipped 73.70 points or .75%. Interest rate
futures are sharply higher as the yield curve continues to flatten, the dollar
continues to be pounded, crude is unchanged, and gold futures are up another
$2.00.
The focus today is likely to be on the UN Security Council meeting/vote early
this morning, and the odds for a war with Iraq. Look for a slower day today.
Volatility
Yesterday, vol popped a bit, especially in the Nasdaq-related indices.
The VIX rose .81 to 35.28, the VXN jumped 3.84 to 53.90, and the QQV rose 1.11
to 45.21.
Update: (11/07/02)
CCU — Per the intraday Alert, we sold our January 40 calls at $2.10 to
close when CCU broke $38.00.
New 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.
Working Orders (Old Recommendations)
QQQ — Those who sold the January 23/26 call spread at $1.50, bid $1.80
for the January 20/23 call spread (somewhere near $23.00 should get you done).
We will cover this trade if no significant selling emerges by Friday.
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
CCU — Long the January 40 calls at $2.00 (25%). Sold at $2.10
11/7/02.
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.
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