Last Master Income Update-
“See Ya Next Year”
Thursday, 31 December 2009
Good morning there,
I just wanted to wish you a very Happy New Year!
And the entire staff here hopes you enjoy a safe and prosperous new
year.
I’m doing a tiny trade today on my GMCR (the one that keeps a climbin’
right now).
I am rolling some in-the-money GMCR calls into some out-of-the-money
calls.
I’m bullish on GMCR because of what it’s doing and how it’s flexing
its muscles. The path of least resistance here is the stock going
up (for the time being at least).
This isn’t predicting – this is simply observing!!
The calls I’m rolling are the Jan 70 calls (stock’s at $82+).
I am buying these back and selling Jan 85 calls.
These amount to approx 20% of my GMCR calls.
Other than that – I’m all set to see the new year come in.
I’ll see ya next year.
–P
Master Income Update -
Wednesday, 30 December 2009
Good morning,
I’m not doing any trading today and it’s unlikely I will be doing
any more for “the rest of the year”.
It looks like the market will be open for a full day of trading
tomorrow – and I will be checking in…but it looks like the majority
of folks have checked out and taking the extra long weekend.
I don’t see anything jumping up and down out there today…other than
the back and forth between Amazon and Apple and e-reader rumors regarding
the latter.
The volatility is good!
My thoughts right here is stocks are staging for a nice charge out of
the gate come the new year. There are some hair-raising, buzz-creating
set-ups out there. Apple and GMCR being two that quickly come to mind.
Any-who
That’s all I got for now -as this year is winding down (and flying
past I might add) -
Hope this finds you well,
–P
Master Income Update -
Tuesday, 29 December 2009
Good morning,
Today is one of those un-eventful days. I’m not making any new trades
and I’m not doing any trades to exisiting positions.
A few scattered notes…
I keep mentioning little things about GMCR – it looks like this is a
sleeping giant waking up from the slumber. It’s tacking on some more
today (even though volume across the board out there is rather light).
ICE is also moving out of the zone it’s been in (moving to the upside).
But without volume there – it’s hard to give weight to the movements
most stocks are putting in out there.
I don’t have much else for today..
–P
Master Income Update -
Monday, 28 December 2009
Hello there and good day!
(Who says “good day” anymore? I guess corny me…)
I wanted to get in here – I had an impossible-to-get-in-front-of-the-
computer morning today.
But I’m here with about 30 minutes left to go in the first trading
day after Christmas.
The last thing I read just before typing here is that Apple’s volume
on Thursday, whie looking “low” actually was 65% better than a normal
day’s volume….what is this due to?
The trading day being cut in half, that’s what.
AAPL is tacking some more on today which is a great thing to see.
I am doing two MIT trades right now.
For one – GMCR is just exploding upward today. It’s up $5+ or some
crazy figure close to that.
With all that merger stuff behind it – this one is acting incredibly
bullish. And it’s only staring an earnings date square in the face
come the end of January.
Look out – this GMCR beast is all caffeinated up and ready to keep any
investor alert that cares to look at or follow it!
I have an MIT trade currently in GMCR – so here is what I’m doing
today -
I am rolling out of my Jan 65 calls and (buying them back for almost
entirely all intrinsic value) and selling Jan 80 calls.
Here’s how this leaves my trade and the “ratios” of calls/puts, etc:
GMCR trades today for: $77.40, up $4.72
I have:
25% of my calls are Jan 70 calls
37.5% of my calls are Jan 80 calls
37.5% of my calls are Feb 75 calls
On the put side:
I have 25% puts at March 60 puts
I have 75% puts at March 65 puts
With the way this stock has been acting, I am more bullish on this one.
This means I am more okay with the distance where my puts are in
relation with the present stock price. It also means I am “laddering”
these roll-outs and opting for the out of the money calls when I
roll which will catch more upside if that what the stock continues to
do.
The next move I’m making is on CRM.
It’s a roll that’s 33% of my calls…
Buying back the Jan 60 calls and selling the Feb 75 calls.
I now have 2/3rds of my calls still in January and 33% now in Feb.
CRM is another stock showing tremendous muscle. Keep in mind, this
roll is only 1/3rd of my calls.
With CRM trading at $73.25, up $.60 cents,
the rest of my calls are as follows:
1/3rd at the Jan 65 calls
1/3rd at the Jan 70 calls
On a side note – I keep looking at a newer stock that IPO’d several
months back. It is getting very near a point where I like to test
the waters and buy in.
The ticker is: ACOM (Ancestry.com). The options are “roach motels”
and the stock isn’t actively traded, but that’s how a lot of these are.
It is NOT ideal for an MIT trade right here – but there’s a very compelling
edge to go long some of these newer stocks at certain points in time.
ACOM has May and August options and I am fishing a limit order at
the May 15 calls – but just like in true “roach motel” fashion…
the single market maker of these options is thumbing his nose at my
bid.
Anyway – these May 15 call options are like $.50 cents – so we’re
not talking a fortune here…anyway – just thought I’d mention this
one to ya.
Gotta send this off now!!
Over and out,
–P
P.S. Hope you had an awesome Christmas!!
I hope you had an awesome Holiday!
This is Karson (the Pirates first mate)
He wanted me to let you know that he will be sending out his normal
update a bit late today.
As a trader this time of year is always interesting, not just because
of the holidays but because you get to look back at how well you did
for the year in your trading account. The fact that we have done so
well with everything that has been going on in the last year is truly
amazing. It makes me glad I am an income trader.
AAPL is still motoring up (a few bucks higher right now), talk about a
unique company!
Enough from me, look for an update from the Pirate a bit later on.
I wish you all the best.
–
-Karson Keith
Master Income Update -
Thursday, 24 December 2009
Good morning,
We got a little bit of an early Christmas present today with Apple
exploding upward and onward. Seems to be due to rumors of some kind
of new product.
(geeee, a real surprise, Apple has something else up their sleeve!)
It’s exploding up to a new 52-week high this morning, moving out of
a fresh base.
I figured it would do this, especially in this time of year because
it’s done this so many times before (in the “I-Pod” era).
I plan to hang on to these now deep in the money calls, I figure this
one can really keep motoring now that it’s “broken out” and with
more rumors, earnings coming up, etc.
Let me take the time here to wish you a very Merry Christmas, Happy
Holidays for you and your family.
I appreciate your trust very much and I look forward to very prosperous
times for you and I.
All the best to you! Travel safe, stay warm and make sure you know
the location of the mistletoe.
Yours,
Preston James
Master Income Update -
Wednesday, 23 December 2009
Good morning,
This is something rather sobering…
As this decade winds to a close – it’s going to go down as the worst
decade for stocks since the 1930′s!
Of course this is measuring the broad market as a whole…not the
quality of life, the inventions, breakthroughs, etc.
But it’s sobering as far as the statement about capitalism and how
it’s muscle is diminishing a little here and there.
It sucks!!!
Fortunately for us, we know there’s always a market cycle to trade
with. Companies are not going away. And by their mere existence we
can profit as investors.
There’s some scary bad stuff, but there’s also some good stuff.
Anyway -
I’m adjusting two of my MIT trades this morning. On GMCR and MA.
Speaking of flexing some muscle – that’s what it appears GMCR is
doing. The share price got drug through several months of wishy-
washy performance as a merger was on and off the table.
With that in the rearview mirror – this one is starting to act like
the crazy leader it once was.
Anyway – I’m adjusting out of some now deep in-the-money calls.
With GMCR at: $72 (up another $1.70 or so today) -
I am buying back my last remaining Jan 60 calls (which accounts for
around 30% of my calls) – and selling the Feb 75 calls.
I’m going to Feb because there was next to nothing for premium in
the Jan 75 calls. I am more on the bullish bent here with GMCR. I
am still keeping the puts I have too.
Then on MA (another mover) – on half my calls I am buying back Jan
240 calls and selling Feb 260 calls.
MA trades at $257 right now, up $1.40
This move now makes my MA trade look like this:
50% of my sold calls at the Feb 260 calls
25% of my sold calls at the Jan 240 calls
25% of my sold calls at the Jan 250 calls
(again, the stock is at $257)
All of my puts are MA April 210 puts.
These two rolls into February are not something I do that often…I
usually do this with about 6 weeks away ’til expiration. Realize
I’m not rolling 100% of my January calls into February’s…just a part
of them (in both cases).
This gives us some upside on a continued upward move, not to mention
a compelling time premium.
Okay – that’s all I have for now!
I’m not doing anything else…and over on the pre-announcement side,
it’s very slow probably because of the holidays, etc.
–P
Master Income Update -
Tuesday, 22 December 2009
Hello there,
I am on the road and will be for the next 2 days -
I plan on updating, but timing of the updates won’t be in their
normal time slot. I will try to get them in during market hours
though.
BUCY and HITK continue to be hot, hot, hot. The add-on trade to
BUCY got off to a great start. The stock is liking the merger news
that hit the newswires yesterday.
HITK, from what I can see, is reacting very strongly to the upside
in the wake of the Senate healthcare vote yesterday.
As for trades today…
I am getting rid of the rest of my GRMN MIT trade. Basically, this
will help as far as tax purposes to close this one down before the
calendar changes over to 2010.
I am buying back my Jan 30 call, selling the stock and selling out of
the GRMN April 25 puts.
On GMCR,
I am doing a rollout that affects 25% of my calls here. I am buying
back Jan 60 calls and selling Jan 70 calls. This stock has been
through a lot of sideways action, but with this merger/buy-out now
completed, the stock is acting strong.
After this roll, this is how my M.I.T. trade on GMCR looks:
GMCR is at $70.06, up $1.26 today:
25% of my calls at the Jan 70 calls
The remaining 75% of my calls are split at
the Jan 65 calls and the Jan 60 calls.
For puts, 75% of my puts are March 65 puts, 25% are March 60 puts.
There’s a ticker today, ARUN that is very compelling.
I love, love, love the breakout happening with this stock today.
ARUN is Aruba Networks (a company that flashed on the scene during
the internet bubble 10 years ago).
ARUN trades for $10.70, up $.20 cents today…this is a new 52-week
high, again, after having struggled in a base for many months.
I normally don’t like stocks under $15 per share, but this is a set-up
I like enough to trump that.
I have an order in to buy ARUN April 10 calls. I checked, and the
options are not roach motels.
Okay – over and out for now!
–P
Master Income Update -
Monday, 21 December 2009
Good morning,
We’re greeting markets in the green this morning.
One stand-out is BUCY which is breaking up and above it’s range that
I figured it would.
Right off the bat this morning, I am buying some more BUCY, but not
the Jan 50 calls like I already have. I am buying some April 50
calls. This amounts to an addition of 25% to what I already have.
(I am not doubling my size with this additional buy).
BUCY is up $5.60 at $56.43 right now.
Ya know, people will always ask…”well, if you thought it was going
to go up, why didn’t you buy more when the stock was at $50?”
It’s a fair question. And the answer is – there’s no government
guarantee that the stock would move like this and take out its 52-week
high!
(well…um….I guess there’s no government guarantee….YET. Who
knows, this Congress may cook up some schemes that may mandate the
price of stocks — I’ve heard of whackier things!!!!!!)
Anyway – the point is – there’s even a stronger edge now that BUCY
continues to move up higher in price. It has struggled in a range
for quite some time – and today’s action which broke the stock up and
thru it’s channel is compelling.
A comment on ICE:
Ya know, ICE is my biggest MIT position right now – and has been the
entire year. But that doesn’t mean it still deserves it. What happens
on every stock (it’s not a matter of “if”, just a matter of “when”),
is the option pricing changes on them.
When we first got attracted to ICE it was a $60 something stock. And
an option that was near the money, for say, 5 weeks of time, carried
a $5- $6 option premium premium. This equated to a 7-8% cash-on-cash
return (no margin calculated in).
When I look at ICE right now. The option “return” for selling neat
at-the-money calls is around 3%.
The fact is, this isn’t unique to ICE, the volatility has gone done
across the board…but it’s especially hit ICE. So if you see me
making this one smaller over the next few weeks and into the new
year, you’ll know why.
There’s other stocks (AMZN comes to mind) – that have fresh and renewed
interest in them, which means higher volatility and option pricing.
Speaking of breakouts, CRM is breaking out too. It doesn’t have the
volume punch right now that BUCY has, but it too has struggled for a
while now in a range, only to break out.
CRM is at $68.90.
The way my CRM trade stacks up, is I have 2/3rd of my calls sold at
the Jan 60 calls and 1/3rd at Jan 65 calls.
So this morning, I am rolling 1/3′rd of my Jan 60 calls up to the
Jan 70 calls. So what I have left is 1/3 at Jan 60, 1/3 at Jan 65,
and 1/3 at Jan 70.
So my new trades/moves today are a buy of BUCY April 50 calls and this
roll in CRM.
I hope this finds you well!
–P
Master Income Update -
Friday, 18 December 2009
Good morning,
Hello there!
Well we’re here again – and let me get crack-a-lackin on some stuff.
First of all, the last remaining roll I’m doing this morning is on
the remaining half of my SBUX trade. SBUX is getting an extra “shot”
today – the stock is up $1 which is a nice sized move for this beast
of a stock.
I am buying back the Dec 22 calls and selling Jan 24 calls (there are
no Jan 23 calls, else I would have sold those). With the stock right
now at $23 – I have half my sold calls at the Jan 22.50 calls and
half at Jan 24. (100% of my puts are at April 17 puts by the way).
Anyway -
My straight out option purchase on BUCY is at 50% of its value. The
stock has really struggled. Usually, without question, I blow out a
trade like this chalking it up to not working.
However, with BUCY here at $50.70, it has really jumped up and down
in its cage in the $50 to $55 area. I bought near the $55 area figuring
it was thiiiis shhhyyyyyyy of breaking out and running.
So I’m just going to see if this one is going to jump again, and if
it goes past $55 on big volume, I won’t be doing anything (expect
for adding to it and making it bigger that is!)
Okay – enough on that.
RIMM is stealing the show today. What a compelling move and just
look at the tall timber that’s the volume bar on the bottom of the
screen! RIMM is back in “play” as an MIT stock right now.
RIMM added 4 million users during the last quarter…during the last
3 months!!!!?? And they don’t often quit either. Once you’ve had a
crackberry in your hand, there’s no going back.
Another compelling little set-up this morning is over in something
entirely different – ticker: TTWO.
Here’s a gaming company that got shellacked…I mean pummeled in one
day (just this month) on Dec 4th. Everyone yelled “uncle” and left
the stock.
Only now – there’s some intrigue because Carl Icahn is involved, but
the most stellar thing is the action in TTWO today. On already quad-
ruple the volume, the stock is roaring up today (up $1 right now) -
but this is a $9 something dollar stock, so this equates to approx a
10% move.
There are very active options on TTWO. When a situation like this
arises, it is compelling because of the wash-out factor, then the
getting back in factor of the human herd.
I like this both as a situational “directional” trade (buying calls),
I also like it for an MIT trade.
Personally, I am doing a directional trade here buying some Jan 7.50
calls. I think there is more pop in the stock here and I’m looking
to make some fast money with a nice risk/reward dealio.
Okay – I have to run right now.
Hope this finds you well!
–P
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