Olympics Come Early
Futures look a tad higher across
the board. The big news is in the biotech
sector where Imclone
(
IMCL |
Quote |
Chart |
News |
PowerRating) has traded as much as $10.00 lower.
The FDA has requested more info for Erbitux. Watch the
volatility and stock action in
this stock. When the selling dies down, it could be an interesting
candidate for a bull spread.
We are stuck here for a full day today and the afternoon
will be dominated by the
“window dressing” Olympics. They will try their damnedest
to put the COMP above 2000, so daytraders be careful shorting that
one.
A LOW VOL (Low Volatility) signal popped in
(
IBM |
Quote |
Chart |
News |
PowerRating)
this morning, indicating it may
be time for straddle purchases there. We’ll keep you posted.
Erratum: In this weekend’s “IV,” I made an error
in calculating the price of the
(
BBBY |
Quote |
Chart |
News |
PowerRating) Feb. 35 straddle. We picked up a price of ~$3.55, and it
is really ~$4.55. In light of this mistake, I
now recommend buying the Jan. 35
straddle at ~$2.90 rather than the Feb. straddle.
Gamma Scalping:
I will now be posting gamma scalping recommendations and
levels via the alerts. This
morning the sigma levels for
(
GENZ |
Quote |
Chart |
News |
PowerRating) are 62.79 on the upside and
58.96 to the downside. Look to hedge deltas in those areas.
Current Recommendations:
GENZ — Continue Gamma scalping the GENZ straddle.
BBBY — Buy the Jan. 35 straddle at $2.90 or better, 100%.
Rolls/Adjustments:
(
TLAB |
Quote |
Chart |
News |
PowerRating) — Place an order to buy the TLAB March 15
put/March 22.5 call collar for
$1.00 (25%).
Recap of open trades:
Long-term
Airline calendar spreads
(
AMR |
Quote |
Chart |
News |
PowerRating) Jan./Oct. 25 call calendar @ .75 — Oct.’s went
out worthless, holding the Jan.
25 calls.
(
UAL |
Quote |
Chart |
News |
PowerRating) Jan./Oct. 25 call calendar @ .70 — Oct.’s went
out worthless, holding Jan. 25
calls, looking like rip-ups.
Reverse Collars
(
AWE |
Quote |
Chart |
News |
PowerRating) Jan. 12/15 reverse collar (long the Jan. 15
calls, short the Jan. 12.5 puts) @ .05 average. Stop below.
(
TLAB |
Quote |
Chart |
News |
PowerRating) March 17.5/15 reverse collar (long the March
17.5 calls, short the March 15
puts) @ 1.50 credit average.
Buy-writes
*
(
AMZN |
Quote |
Chart |
News |
PowerRating) Jan. ’03 10 buy-write @ 5.15 (100%) — hold.
*
(
JDSU |
Quote |
Chart |
News |
PowerRating) Jan. 12.5 buy-write @ 9.60 — hold.
Proxy buy-writes
(
BA |
Quote |
Chart |
News |
PowerRating) Jan. ’03 35/Jan. ’02 40 call calendar @ 5.00 —
hold.
BA Jan. ’03 40/Nov. ‘ 01 40 call calendar @ 3.00 — hold.
Complex Strategies
(
JDSU |
Quote |
Chart |
News |
PowerRating) — Long 1 unit of the Jan. 10 calls and short
2 units of the Jan. 7.5 puts @
$1.00 credit.
(
GENZ |
Quote |
Chart |
News |
PowerRating) — Long the Jan. 60 straddle at $5.95 average
cost, (100%) — hold.
Short-term
Call Positions
(
WCOM |
Quote |
Chart |
News |
PowerRating) Jan. 12.5 calls @ 2.40 — hold. Stop below.
Put Positions
(
TGT |
Quote |
Chart |
News |
PowerRating) — Long the Jan. 35 puts @ 1.15 (100%) — hold.
(
WMT |
Quote |
Chart |
News |
PowerRating) — Long the Jan. 55 puts @ 2.35 (50%) — hold.
Put Spread Positions
(
AZO |
Quote |
Chart |
News |
PowerRating) — Long the March 55/65 put spread @ 2.125
(100%) — hold.
(
BBY |
Quote |
Chart |
News |
PowerRating) — Long the Jan. 60/70 put spread @ 3.00 (50%)
— hold.
STOPS
(
AWE |
Quote |
Chart |
News |
PowerRating): Stop @ 12.25 close only.
(
WCOM |
Quote |
Chart |
News |
PowerRating): Stop @ 13.95 close only.
(
TLAB |
Quote |
Chart |
News |
PowerRating): Stop @ 11.95 close only.
|
|
*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