The Domino Effect
Futures are looking lower in pre-market activity.
Negative news from WorldCom
PowerRating) after the close Friday and Ericsson
PowerRating) today have pulled the rug out once again. The domino effect of
these Telecom warnings will weigh on the rest of the food chain: networkers,
fiber optics, etc., will be weaker.
Traders long the QQQ May 35 puts, remember to take partial profits on
the opening, save the rest for a test of the $33.33 area.
One thing we can say about the market is that the
bad news just keeps on coming. It makes me wonder if there won’t be a little
capitulation just around the corner. Keep an eye on the
today. It has been weaker than usual lately, and a lot of people are holding
On Friday, the VIX finished down .94 at 20.30, the VXN up .01 at 39.35, and the
QQV dropped .97 to 32.22. There are two opposing forces acting upon volatility
at the moment: market weakness and terrorism threats supporting volatility, and
the lack of follow-through and the passing of earnings season containing
volatility. Just like the underlying market, this has led to an annoying
Trade Updates (4/19/02)
Nothing done today.
Working Orders (Old Recommendations)
New Actions (New Recommendations)
(Note:Â What you are doing is selling
your long May 60 calls to close, buying half as many May 55 calls to open, and
paying $.65 for the privilege). This spread is not currently close.
PowerRating) — Investors long the July 50 calls at $3.30 (50%)
may sell the July 60 calls against their positions at $1.00. This will roll us
into the July 50/60 call spread at $2.30.
On The Horizon…
MoreÂ buy-writes ahead!
Recap of open trades
HAL — Long the July 17.5 buy-write at $14.50
Call Spread Positions
- 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