Master Income Update -
Friday, 31 March 2011
Greetings on a Thursday. I’ve been talking about the
unemployment report that’s due out tomorrow morning (Friday)
and how it’s probably the sole reason why stocks are trading
so tentative and careful today.
It’s also (likely) the biggest reason why option pricing
is still rather puffy and out there (still a lot of time
value priced in for just 1 day and some change left on the
calendar!)
So this is affecting why I’m rolling and adjusting out of
some things today, and why I’ll wait ’til tomorrow on some
others.
By the way, there’s brand new weeklies available (as of this
morning) on PFE, T, WFC and on the ETF TBT.
I’m most excited about the TBT prospects. This ETF is heavily
traded and it shorts U.S. Treasury debt, bonds, notes, etc.
I like TBT for a generally long term run-up…which means
longer term calls can be purchased, then weekly calls sold
against it. And/or/also, weekly puts can be sold either
in weekly credit spreads, or in a calendar fashion as well.
Okay – with all this said, let’s cover what I’m doing today
in my accounts with MIT trades!
I’m overwriting in RIMM, selling 10 next week 57.50 puts,
I own 2,000 shares with 20 may 62.50 puts (there’s no more
downside, which is always nice!). I’m letting my this-week
calls all expire worthless. I’ll look to sell the other 10
most likely tomorrow.
I’m rolling out of my 10 FFIV this-week 100 calls, and
moving them to next week’s 105 calls.
I’m rolling out of 10 of my 20 AMZN calls. I’m moving these
10 from the this-week 170 calls and into next week’s 180
calls.
I’m rolling out of 20 of my 70 BIDU calls. I’m rolling
these 20 from the this-week 130 calls to next week’s 135
calls.
I’m also rolling out of half my ATML calls, rolling them
from the April 12 calls to the April 14 calls.
On IBM, I had sold some April 160 calls (as an overwrite,
this was back when the market, and IBM individually, was
selling off and IBM was being picked on with a downgrade).
Anyway – I’m simply buying these 10 April 160 calls back.
On the IBM weeklies, I’m rolling out my 160 calls for this
week and selling next week’s 165 calls.
This is what I’m up to today!
I hope this finds you well! –P
Master Income Update -
Wednesday 30 March 2011
Hello,
The adjustment I’m making today is on AMZN, specifically
rolling out 10 of my 20 this-week 170 calls to the this-week
180 calls.
AMZN is busting out with recent news of streaming music,
and all kinds of other things…bottom line is it’s compelling
and it has me wanting to roll out at least half of this
position even though new weeklies get printed come tomorrow
morning.
(the 170′s are almost entirely intrinsic value).
I also find it pretty interesting that when I opened my IBD
this morning, I see that they changed their “market in
correction” to “confirmed uptrend” – yet..
Yet..
The market cycle on Nasdaq is graded at an E…and the
S&P 500 index dropped to an E (from a D-).
This means there’s a lot of shifting from one industry to
the next right now – but not a broad-based amount of buying
from the institutions of stocks across the board (at least
not yet…these grades can and will change, and it can happen
quickly)
Anyway – that’s what I’m doing today on the MIT side of
things.
There will be a flurry of trading come tomorrow, so stay
tuned! Over and out, –P
aster Income Update -
Tuesday, 29 March 2011
Hello there!
Needless to say – I’ve been very content with yesterday’s and today’s action…not that
the market is doing many spectacular things (the accumulation/distribution grade of
“E” on the Nasdaq and D- on the S&P 500 haven’t budged one iota with the market
firming here this week. Remember…the accum/dist. is a measure of both price action
AND volume. If the volume sucks, stinks or is lagging – yet there’s upside in stock
prices….it’s barely going to budge the meter).
But I digress – while the market cycle is stunk – the passing days of stocks behaving
where they are (as far as price goes!) is really killer.
As you know, I made my NFLX trade bigger yesterday (by way of having NFLX put to me
at $230, then waking up and seeing NFLX trade at the $237-$238 level….you gotta like
that!) – and sold this week’s 240 calls and then bought protection at the June 210 puts.
I did trade LULU earlier this morning, but not in an MIT fashion. LULU announced a 2 for
1 stock split after the close yesterday (which was a break out day of trading for LULU on
Monday).
You can make money here on the likes of LULU, but you’d be forced into selling only
monthly premiums – and well…that’s just a different world than what we’re in now!
(I did a bull put credit spread on LULU into April because of this break-out, and
because it’s one of only a handful of stocks that have the word “split” associated with
it right now!
Anyway – wanted to send you along a few thoughts today…
I hope this finds you well.. –P
Master Income Update -
Friday, 25 March 2011
Hello!
Here’s a rundown of some things I’m doing today, Friday
March 25th..
RIMM missed their expected guidance figures and the stock
is taking a beating…with owning May 62.50 puts, our downside
was virtually completely covered. Now with the stock around
$56 – I’m selling 57.50 and 60 calls for next week.
Remember, there is no more downside to this trade – and the
stock probably stays crunked here for at least a month or so
after this bad news.
Over on NFLX, I’m adjusting my June 190 puts up to the June
210 puts. Now I have 10 June 200 puts and 10 June 210 puts
to protect the stock.
I’m also rolling out 10 225 calls that expire today and rolling
them to next week’s 230 calls.
I am also rolling 100% of my POT $55 calls that expire
today into next week’s 60 calls. The bummer with POT here
is the lack of good strikes on a week to week basis.
Some people have been telling me that there’s plenty of
strikes for the normal April expiration and so they are
choosing from those. It’s kind of no man’s land on the
weeklies – but I’m confident that with a name like this
with the level of interest/volume, etc that POT will soon
have at least $2.50 increments.
I’m rolling my remaining 30 contracts of BIDU 130 calls
that expire today into next week’s 135′s.
I’m rolling out of FAS, buying back today’s 29 calls and
selling next week’s 130 calls.
I am rolling out of the $45 calls in JPM and selling next
week’s $46 calls (there’s those $1 increment strike prices
for ya!!)
And toward the close I’ll either overwrite or roll into
10 more calls on NFLX – I’ll likely go with the 235 calls
for some variety (10 230′s, 10 235′s).
Okay -that’s what I’m up to today! –P
Master Income Update -
Thursday, 24 March 2011
Greetings,
Well I’m doing plenty of stuff today – let me fill you in on all the trades, moves and
adjustments for today, Thurs March 24th!
First of all, BIDU is the giant that’s awakened. A big beast that’s been laying sideways
taking a nap, it’s just now getting up and stretching, breaking out all over the place and
making new fresh 52-week highs!
So Thursday has me adjusting the calls I have sold and the puts I have underneath for
protection.
a) I’m moving all 70 of my puts up from the June 105 puts to the June 115 puts.
b) As it looks right now, I am rolling out of my 50 120 calls and 20 125 calls and putting
them at: 30 of the this-week 130 calls. 20 at next week’s 130 calls and 20 and next
week’s 135 calls.
Moving over to AMZN (another one that looks unshackled from some crunk it’s been
dealing…AMZN’s at $172ish). I am rolling out of my this now, buying back 100% of my
165 calls for this week and selling next week’s 170 calls. I still have July 150 puts for
my protection.
With still rich time value priced into the FAS this-week 29 calls, I’m not rolling these
yet – I will look to either roll or over write on this name come tomorrow (and come what
changes to the market there is for the banks come tomorrow!)
On FFIV, I’m selling 5 next-week 100 calls. Just looking to bring in some premium on this
directional type of trade (which has really been beaten down as of late). I don’t want to
get called out which is the reason for these weekly calls being sold so far out of the
money.
I am rolling out of all of my IBM 155 calls and selling next week 160 calls.
I am overwriting on GE, selling next week 20 calls (letting this week’s calls expire
worthless).
On LVS, I am rolling out of this-week $38 calls and selling next week 40 calls.
I’m rolling out of all my MSFT 25 calls and selling next week’s 26 calls.
On NFLX, I rolled out of my 210 calls yesterday and rolled half of them to the this-week
225 calls and half to the this-week 230 calls. With NFLX here at $230 (and likely being
sticky right there into tomorrow) – I’ll look to roll or overwrite tomorrow and sell next
week calls on my 2,000 shares of NFLX. NFLX has been bad-ass this week!
I’m rolling out on NVDA, buying back this week’s 18 calls and selling next week’s 19
calls. NVDA has really gotten a shot in the arm today.
On RIMM, I have 65 calls sold for this week against all my 2,000 shares (that’s 20 calls
sold), but given that RIMM announces earnings after the close today – and given how
the stock is done a nice surge today…I don’t want to be short these calls. Given that I
have 20 May 62.50 puts in place…the downside is contained here and I don’t want to
limit the upside. I’ve seen RIMM go into fireworks mode far too many times because of
earnings in my day. So I’m buying these 20 this-week 65 calls back today.
Okay – that’s what I have for today! I’ll have more to adjust and roll tomorrow! I hope
this finds you well!
–P
Master Income Update -
Tuesday, 15 March 2011
Hello,
Wow, what a couple of back to back days here. It’s hard to
know from one minute to the next what the news will be,
what the reactions will be, etc, etc, etc.
I’ve been mostly watching things progress here during the
market day.
A total surprise was Goldman’s upgrade and $300 price target
set on NFLX. Netflix is in explosion mode to the upside.
One thing I’m doing is rolling my March 205 calls up to the
$215 calls (for March).
These were pretty much maxed out and by rolling up to the
$215′s, there’s like $5 of time value there for the rest of
the week…talk about a fluffy premium!
for the other half of my calls, they are at the 210 calls
for this week – and I’m going to hang tight in these for
now.
In addition to NFLX, I’ve been very surprised to see BIDU
stand very strong through all this, same with POT, and even
AMZN.
Anyway – this is what I’m adjusting today – and like I said,
I’m mostly just observing things here throughout the
Japanese crisis.
We’ll be in touch, –P
Master Income Update -
Friday, 11 March 2011
Good morning!
Well, I’m sitting here doing some over-writing, adjusting
and other trading on Friday. Here’s the rundown!
On IBM, I’m selling next week’s 165 calls and letting today’s
165 calls expire worthless.
On FAS, I’m selling next week’s 30 calls and letting today’s
31 calls expire worthless.
On NFLX, using its strength today, I’m selling next week’s
210 calls. Now I have 10 sold at the 205′s and 10 at the
210′s (I’m letting my 20 215 calls expire worthless today).
On JPM, I’m selling next week’s (March) 46 calls…and letting
today’s 46′s expire worthless.
On LVS, I’m selling next week’s 42 calls…and letting today’s
expire worthless.
On BIDU, I’m selling next week’s 125 calls…and I’m letting
all of my today 125 calls expire. So for next week, I’ve
got 50 sold at the 120′s and 20 sold at the 125′s.
The Green Mountain/Starbucks news yesterday was truly earth-
shattering (given the reaction by investors PLUS on such a
red day of tape in the market out there).
It’s also been compelling to see the likes of NFLX and BIDU
(also PCLN) be so freaking strong during such a challenging
week out there. It’s nice to have, seeing as BIDU and NFLX
are my two biggest positions going.
I hope this finds you well today! –P
Master Income Update -
Thursday, 10 March 2011
Good morning,
With the 2 grade change on accumulation/distribution that
happened earlier this week – today we’re seeing what can
happen as the big institutional money ditches out.
It will be very interesting to see what the market does
this afternoon, and also how it will close out the week
tomorrow.
When the cycle turns lower like this, we want to be on the
extra defensive.
Meaning, if you don’t own partial puts against stock you
own, it’s time to make them a full position. And on the
call premium side, this is the time to sell at- to in-the-
money calls.
NFLX really got rocked yesterday on the Warner Bros./Face
book news – but now it’s really flexing its muscles today
(trading higher) in all this red tape.
BIDU is another name really hanging in there through all of
this. I am upping my put protection on BIDU, changing them
to the June 105 puts from the June 100 puts.
I have 100% of my sold calls at this-week’s 125 calls (which
will expire worthless) – right here I’m selling 30 of the
next-week 120 calls…and will look to sell the rest some
time today or tomorrow.
I’m doing more over-writes today too, for instance selling
next week’s (March) 55 calls on POT. By the way, some more
buying is coming in for the agriculture/fertilizer names
today as they’ve really been knocked off the past few
sessions).
I will send out another MIT update with more things I’m
doing today and adjusting. The market has covered a lot of
ground on the upside (after the DOW was down around 225
points earlier this morning). –P
Master Income Update
Friday, 4 March 2011
Hello!
Well, let me share with you all I’m doing today – it’s a busy
one just like all the others!
First of all, I can’t believe the action on the likes of
PCLN and NFLX…they are sticking out like pizzas at a weight
watchers convention!
Okay…here goes:
I’m overwriting on NFLX, selling next-week calls, the 215
calls. I am short today’s 220 calls, which will expire
worthless.
NVDA now has weekly calls! (and like 8 other stocks…you
really should go to the cboe.com website and check them out
for yourself…this is the biggest week of additions I’ve
ever seen!)
Anyway – I’m long NVDA now (due to having exercised call
options after a big run-up in the stock). So I’m selling
next-week 22 calls on it. (man I like the sound of this!!)
I’m overwriting in JPM. I’m selling next week’s 46 calls
and letting this week’s 46 calls expire worthless.
I’m overwriting in LVS. I’m selling next week’s 45 calls.
I’m overwriting in FAS. I’m selling next week’s 31 calls
and letting this week’s 31′s expire.
I’m overwriting in RIMM. I’m selling next week’s 67.50 calls
and letting this week’s 67.50′s expire.
I’m rolling out of my remaining BIDU calls which are at today’s
120 calls…I’m rolling them all to the next-week 125 calls.
(BIDU is another stock that’s acting oblivious to today’s
selling/profit-taking in the market…I like this cue and
figure if it battles like this today – then it could be off
on a great week next week).
And that’s what I’m doing so far!
I hope this finds you well today!
–P
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