Master Income Update -
Wednesday, 31 March 2010
Good morning,
For today’s update and tomorrow’s (Friday the market is closed) I’m
on “location” – which is code for saying I’m on spring break for the
family.
Needless to say, my schedule for trading and updating gets jostled
around something fierce. Take this morning for instance.
Anyway – I’m hooked in, wi-fi’d and checking some things out.
This offshore ban removal, or whatever you call it obviously is a
surprising and “newsy” thing for some driller stocks. The snap
decision is to buy into some of these.
But this move could fade – with these stocks staying in the range
that they’ve been for a long while. After all, they trade in
relation to the oil price – and it’s forever tricky trying to trade
stocks that are tied in so tightly to commodity pricing.
The beast I’m most interested in this morning is Green Mountain
Coffee (GMCR) – as in – on basically no news, this one is flexing
it’s bad-a muscles.
Get ready, cause this one can start on a tear at anytime – especially
when you consider earnings are 3-4 weeks away.
Remember I bought some April 100 calls a few weeks back? They have
always been out-of-the-money – and some time value has took the value
of them down – but on the side I’m picking up some more (shhhh, don’t
tell anybody!)
With the current income trade I’m in with GMCR, most of my puts (3/4)
are sitting at the June 80 puts (GMCR is trading right now for
$97, up $3.20. (high of day has been $98.50).
I’m really watching it here because these are puts I will want to
roll up rather soon…even a part of them would be smart any day
here.
There’s no new pre-announcers or other stocks in the news this morning
that are jumping out at me for new opportunities.
Like I said, I’m not too thrilled so far with the drillers and oil
types. I’ll keep an eye on them though.
That’s it for me from the “location” -
I’ll be here manana too – and then I won’t see ya ’til Monday.
Over and out,
–P
Master Income Update -
Tuesday, 30 March 2010
Good morning,
Today I’m moving some stuff around. The main thing I’m doing is I’ve
decided to part ways with ICE. This has been one of my longest
running MIT trades.
It initially attracted me to it’s jaw-dropping premiums early last
year. Then, it went through some Obama interrogations and rumblings
from Congress about “fixing” the derivatives trading business with
curbs, etc.
Anyway – I’ve lightened the position somewhat, but today I’m deciding
to get all the way out of it.
For one, this will free up trading capital for other trades…but the
main reason is it’s not as actively traded as it once was (both the
stock and options) – and flat out – it doesn’t carry the premiums it
once did…in fact…not even close.
So every once in a while you want to re-evaluate the different trades
you’re in from a broad view like this.
In today’s world, one year of time was like 10 years of time back in
1950′s or 60′s. I try to stay on top of this and adjust accordingly.
So, that’s something I’m doing today.
I’m also adjusting some of my BIDU. Rolling out some puts that are
way clear down at the June 500 puts. I am rolling these to the
Sept 550 puts (BIDU is at $600). I am also rolling the same amount
of calls up from the April 530 calls to the April 600 calls.
This BIDU trade is staggered all over the place – and it’s due to the
wild ride that is BIDU!
There’s an interesting new pre-announcer this morning: DHR. The trend
here is impressive, but the premiums for income trading are rather
lacking.
With the stock making a new 52-week high today, and it presently being
$1.30 or so below that mark (because of the lull in mid-day trading),
look for this one to probably finish strong at it’s high or maybe
take it out in the last 90 minutes or so of the day.
Sometimes I like doing 1 to 2 day trades on this “lull” period of
time in the day.
But of course, I’m not going to be camped around my computer to
watch stuff like this all day. For sanity sakes I need to push away
during the trading day and go do/think about other things!
That’s what limit orders are for!
Anyway – I hope this finds you well. –P
Master Income Update -
Monday, 29 March 2010
Good morning,
There’s a grouping of stocks out there inherintly volatile. There
always seems to be opinions on them both ways…both buyers and shorters.
They are prone to respond and be in the news. And recently some big
cartel members have stepped in with upgrades.
I’m talking about none other than solar stocks.
If we were sitting down together over some hot wings and started
talking about the world – this would be an industry I don’t care much
for.
These kind of stocks remind me of a certain uncle who loves feeling
smart in a family gathering, the guy who loves to name drop and tell
you what stocks are going to the moon.
Inevitably a solar name comes out.
Anyway – regardless of what you or I think, if money is coming into a
stock or a sector of stocks – you can make money.
Anyway – if you look at, say, Canadian Solar (CSIQ) – it has all the
makings of a killer income trade.
The thing trades for $23.64. It’s up $1.61. The volume is around
2.3 million shares right now (average daily volume is 2.3 million).
The options are broken out into $1 strike price increments – and there’s
amazing premium for April 24 calls (May 24 calls look impressive too).
As long as you protect your downside 4-6 months out – you have a trade
that (along with our edge) makes money.
Earnings for this one don’t come out until late May – but other solar
companies like FSLR have earnings in late April).
We traded in some FSLR earlier last year and make some good premiums
with the sky high volatility it traded for.
Anwyay – so I thought I’d mention CSIQ to you this morning as another
one to consider, especially if you are looking for a $20 something
stock.
EXPE has buyers racing into it today too. Priceline is the king-pin
leader in this area, but Expedia is the $20 or so stock that looks
like it’s in play here. There aren’t $1 strike price increments
here but the premiums seem decent as well for a solid MIT trade.
Anyway – wanted to throw those 2 at ya this morning.
I’m not doing any adjustments to current MIT trades. I hope this
finds you well today!
Remember, we are dealing with a shortened week as this friday is a
market holiday for “Good Friday”. Those 3 day weekends are sure nice
as premium sellers!
Over and out -
–P
Master Income Update -
Friday, 26 March 2010
Good morning,
Just like the subject says today, it’s a rather boring out there
as far as income trading goes…
And that’s how it should be sometimes. I’m a pretty excitable type,
what I mean by that is it’s easy to get me all jazzed up and
excited about stuff (if there’s good reasons!) – but I’m also
content some days to not trade.
It makes sense because I know it means there’s opportunities cooking
out there that I can be ready for when they make their entrance on
to the stage.
Anyway – that’s a lot of “throat clearing” but I like to explain
things here and there going on behind the scenes.
I’m content today to slip into the weekend. I like how things are
positioned in the account – and that’s that.
I’ll see you on the other side next week.
Over and out!
–Preston
Master Income Update -
Thursday, 25 March 2010
Good morning,
To even seasoned market watchers, investors, etc. the market can be
as confusing as an astroturf field is to a cow!
Today, an IBD writer calls it an “Icy/Hot” market.
An economy where still more homes are being lost (locking in an
inevitable “double dip” back to lower home prices) -
But where factories are a churnin’.
An economy that faces unsustainable debt, potentially scary devaluing
of the dollar – yet one where the stock market rallies one what looks
like strong institutional buying.
And hell – this could go on and on!
This morning, a maker of yoga clothes and one of the strongest
performers for any stock (LULU) came out with new projections that
have stunned the street. LULU is up 12%+ at $40.44, up $4.39.
Both Best Buy and Qualcomm, two establishment stocks in different
areas of “tech” – are both up today on HUUUUGE volume.
I don’t like trendy retail – it’s an area I steer clear of based on
past experiences of illiquid trading (just when you need some liquidity!),
weird erratic price patterns – and other reasons.
BBY has a dividend payment underneath it and has very actively traded
stock and options – including many option strike prices to choose
from.
Of the 3 pre-announcers I’ve mentioned here (which all pass the normal
tests and checks) – BBY stands out the most for me.
On a different note – I am loving the action in AMZN today, also in
MA. BUCY has a nice lift today and GMCR seems that some life is
breathing in it (a waking beast in my humble opinion).
Anyway – I hope this update finds you well!
–P
Master Income Update -
Wednesday, 24 March 2010
Good morning!
I was excited about Adobe’s (ADBE) earnings/guidance reaction. The
actively traded, big-name stock with lots of strike price choices and
actively traded options.
The only prob with ADBE is the premiums. As in, they’re not pricey
enough. But the set-up is nice.
BUCY is showing really strong action. This is an MIT trade I’m already
in -but if you’re looking around, this one has great monthly premiums
and it looks like it’s ready to rev and run.
Speaking of being “quiet” – look no further than ISRG. Here’s one of
the market’s springy-est, most eye-popping mover when it comes to
earnings time. And with earnings set for April 15th, ISRG 3-weeks
out is quiet. Enough to make you yawn.
Apparently the health care passage has already been cooked into most
stocks. ISRG, a robotic surgery machinery maker, is tied in with the
healthcare industry obviously…but who in the hell knows what the
real ramifications of this new bill are going to be???
I’ll betcha this one either starts moving higher any day now, or has
a big pop in reaction to their earnings announcement.
Stocks seem to get on an earnings/momentum roll – and that’s where
ISRG seems to be on their timeline.
I noticed a headline saying SBUX will now start paying a dividend.
Immediately, my gut reaction was “it’s probably going to be like 2
cents a share”. Well, it’s 2.5 cents!! (on a quarterly basis).
While that’s stupid and literally too petty to mention, there was
“share buyback” also in the text of the story.
And even as feeble as a 2.5 cent dividend is, the fact a new dividend
got announced WITH a share buyback is powerful news – and it helps
buoy the share price up.
Dividends attract buyers, and share buybacks from the company increases
buying. The more shares the company buys back, the less shares they
have to pay a dividend on.
The smaller the number of shares in “the float”, the more earnings
per share figures are boosted (EPS is earnings divided the number of
shares…make the denominator smaller and you get a higher EPS number!)
Also, the fact the top CEO company brass decides to spend their
warchest/sacred dollars on their own stock is another conversation
altogether (vs. deciding to spend their money on buying a competitor,
etc).
Anyway – these two news items together are a major plus. Especially
if any of them are a first (it’s easy to know if a dividend is a
first…but not so much on the share buyback history).
The word “surprise” is THE most important word in investing in my
humble opinion!
(SBUX by the way, is a current MIT trade in my account).
I’m not adding any new trades today. But I hope this one finds you
well!
–P
Master Income Update -
Tuesday, 23 March 2010
Good morning,
I’m kind of in a time pinch this morning – and also, I’m not doing
any new trading today. I really like the LVS dealio from yesterday,
and also made a few bucks from the daily movement in NETL yesterday.
The Pirate? Day trading? Hell, only if something is so obvious it
practically is like having some money over there in the corner, and
all you gotta do is bend over and pick it up!
Anyway – I have to run now. I’m in the hunt for new stuff so make
sure to tune in every single day!!
–P
Master Income Update -
Monday, 22 March 2010
Good morning!
If you just hang around, be patient, stay in the hunt, etc – the
opportunities come around.
Call it a “staying power” thing -
The stock I’m talking about this morning is LVS – Las Vegas Sands.
Teetering on the brink not that long ago, unmarginable, and about to
become a casualty of the economic melt-down – LVS is an attention
getter for lots of reasons right now.
Let me list the ways…
For one, it’s fitting the “ideal set-up” I’m so fond of talking about.
It fits this set-up as of this morning as the stock breaks to a new
52-week high (after a long time going sideways). This new high kicks
the stock back up into an uptrend.
The volume, gap up and price action are all there with their
exclamation points.
The stock is now fully marginable for both regular margin and portfolio
margin (this was yanked away during the teetering months).
The stock has wildly actively traded options, with $1 strike price
increments all across the board (don’t get confused with the May
option activity as these options were newly created over the weekend!
There is plenty of volume as you can see but the open interest shows
zero only because the trading is completely new as of this morning)
Earnings don’t come out until May incidentally.
Anyway – several ways of trading this are:
1) buying plain vanilla calls – look for some upside – then turn it
into stock and start an MIT trade.
2) do an MIT trade right now.
The trade I’m going for is buy stock, sell April $21 calls and buy
June 17 puts.
Right now the stock goes for $20.84. The April 21 calls quote at:
$1.13 X $1.16. The June 17 puts are in the $.80 cent per contract
area.
This is a really bitchin trade here – and one that will fit most
brokerage account budgets ($20 something priced stock).
Remember – it doesn’t matter your opinion if casino stocks are the
right thing. If the Macau area is on the mend or not. If LVS has
too much debt with their bonds. The action is what counts. The
set-up. And further, when we structure a MIT trade – our puts are
bona-fide insurance on the downside. The calls we sell bring in
bonafide $$, etc.
It’s the perfume store story. When I went to the men’s section and
sprayed a few on my arm – a salesman came up to me to ask if I needed
help. Our little conversation gave me the investing epiphany of a
lifetime.
I said I liked a particular fragrence – and I asked the guy if it was
a “good one”? He told me that yes, it was a good one…but if I
wanted to know what the ladies were really wild for, that I needed
to follow him to another section.
The point being – it doesn’t matter what you think is good, what your
opinion is, what you like, feel like, etc. It matters what the market
likes and is going after!!!
Okay – moving on…
There’s a few things I’m doing with exisiting stocks this morning
after the expiration dust settled. I am selling brand new April
65 calls on BUCY (the March calls expired being one penny shy of the
strike price on Friday.
I got called out of half my SBUX stock…I’m simply buying more SBUX
today.
I get to sell more calls on VPRT – I am selling April 60 calls with
the stock at $61 and change this morning.
I am also adjusting half my puts on AMZN. Rolling out the April 125
puts to the July 110 puts.
Lastly – there is some very compelling action going on in NETL. NETL
did something extremely rare in the stock market today. IT SPLIT!
Today is the first day reflecting the new split price (it did a 2 for
1) and investors/traders are really coming for the stock. I’m doing
a little directional trade here figuring this stock will move a couple
bucks to the upside (today and over the next few days).
This also is a compelling stock to look at for an MIT. I just tell
you about it cause it’s sticking out like a sore thumb today and looks
like some easy money.
(I’m going for the April 30 calls incidentally on the call option
trade on NETL).
Hope this finds you well!
Over and out, –P
Master Income Update -
Friday, 19 March 2010
Good day,
Here we are again on expiration Friday – I’ve got a huge load of
trading I’m doing.
Let’s just start where we start:
I’m rolling the final part of my ICE (25% of my position that’s still
in March options). I am rolling from the ICE March 105 calls to the
ICE April 105 calls. 75% of my position is at the ICE April 110 calls.
ICE trades today for: $108 and change.
I am rolling the final half of my AMZN position. Buying back the
March 130 calls and selling April 130 calls.
I am rolling calls on GMCR – buying back March 90 calls and selling
April 95 calls.
On my CME trade – I’m deciding to close this one out. The call
premiums you collect don’t justify the expense in carrying the stock
to me anymore. Plus – it’s not the easiest trade to work with as
far as the battle in trying to get good fills with the bid/ask the
options carry. Not just in the calls – but in the protective puts
as well.
Anyway – I have March puts that are out of the money. I am going to
let them expire. I am going to let the calls expire too and just
sell the stock and call it good.
I am selling new call premiums for Mastercard (MA) and also doing
some rolling here. On half the position, I am buying back March 250
calls and selling April 240 calls.
I am also selling MA 250 calls for the other half of the position. I
have some March 250 calls that will just expire worthless that are
“extra” but will only be “extra” for a few more hours as they will
soon expire worthless. So I have a little bit of an “over-write”
going on here today.
I am doing a bunch of adjustments to BIDU as well. I am both upping
the puts and I’m rolling out of the remaining calls I have that are
now deeeeeeep in the money.
The calls I’m rolling are buying back the March 490 calls. Half of
these I’m rolling to the April 570 calls…and half to the April 580
calls.
On the put side, I’m adjusting some June 480′s to the Sep 530 puts.
And I’m adjusting some June 480 puts to the June 530 puts.
I am rolling 100% of each MHP and MRK into April.
MRK is buying back the March 37 calls and selling April 38 calls.
MHP is buying back the March 35 calls and selling April 35 calls.
Let me send this much off to you right now – and then see how the
dust settles.
I’m doing a bunch of trades today – it’s rather overwhelming and is
taking the entire trading day today!
Over and out for now,
–P
Master Income Update -
Thursday, 18 March 2010
Good morning,
The Gamestop (GME) is paying off in spades today as the earnings are
out (not to mention swirling buy-out rumors) and it has the stock up
nicely today on gargantuan volume so far today!
I’m looking to cash in my March 20 calls today before the close.
Also, BPI…a stock mentioned on here a few days back continues to
push up higher. Nice for a straight-out, plain-vanilla call trade -
but also nice if you “went income” with it from the get-go.
I have a bunch of trading to do in my current trades. And usually I’m
hitting these during the entire last week of expiration. I have
done some rolls into April…
But this will probably mean several updates tomorrow from me – as it
looks like I will do most of this on Friday.
How do I know this?
Because I’m not being compelled to do much today as I look over all
the positions.
I am buying back some of my GMCR March 90 calls today, without rolling
into anything yet.
My hankering is that GMCR will soon go triple-digit. It’s taking a little
breather today at $96, but I don’t see how this monster “stays down”
between now and it’s earnings date looming for late April.
That’s one of the reasons I went for a buy into some GMCR April 100
calls.
Anyway – look for some lengthy update(s) tomorrow! See you then.
–P
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