Well, for anyone following my Twitter Updates where I post trades and ideas day of, I've been back in the market a bit lately making some trades. For the most part, I've been able to catch some neat opportunities and I've fortunately been hedged a bit in this downturn...but I was also fearful about what would happen to Apple (AAPL) shares on Thursday, following the surprise announcement from Steve Jobs on his leave of absence. Some recent trades and background:
Biotech Arbitrage Play
The best trading action of the week was my quick entry into Crucell (CRXL) and subsequent exit for a quick 13% gain during a very rough week for the major indices. As I tweeted that night, following the news of takeover talks, the stock zoomed, but I figured there was more to go given other suitors like Novartis (NVS) and Pfizer (PFE) that may not let the takeover go unchallenged. I got out because CRXL has been sliding and the initial bid, whatever it turns out to be, may be lower than the $23 I sold out at. Instead, see below on my broader biotech play.
Actual Twitter Update: Crucell to be acquired; bought in AH trade. i[I] think it goes higher-other suitors. us adr crxl. bought more oil; slow entry. yesterday to[o] early.
Biotech ETF Long
Since I missed out on the Seasonal Biotech Up Cycle, which is inexcusable, given that I highlighted this trend a year ago, I'm finally back in with XBI. Bought in at 53 yesterday. I will ride this wave of acquisitions as Big Pharma continues to feel the pain with blockbusters going off patent and they subsequently find themselves with a need to buy revenues to fill the gap via biotechs.
Hedged Position - Took Some Profits
In December, I took a position in the 3X Short S&P500 ETF (SH) since I was selling the rather predictable rallies and dips as highlighted late last year. Finally, this position is well back into the money given the six day slide and I unloaded enough shares to have some cash on hand for the next few days should another opportunity present itself.
Oil - Bad Timing for Now...
I did start to build a position in oil...On the way down. While I may be early...very early, I don't envision we're looking at $30 when the global economy recovers. We're likely going to find ourselves at $100+ oil again this decade and I plan on waiting this one out. If oil breaks below $30, I'll buy some more, but for now, I'm in deep enough with the DXO 2X Long Oil ETF.
Google Credit Spread - Again!
Following my recent success in pocketing $750 from the Google Credit Spread (GOOG) that expired last month, I entered into a new one by selling a Jun 260 Put and buying a Jun 220 Call. See this article for pros/cons and how my last one played out.
And to top it off...
Apple Covered Calls Update
After patting myself of the back for netting several hundred dollars on an AAPL covered call position over the course of a few months, I'm now below the neutral point given the surprise announcement from Jobs regarding his health. In after hours, shares are showing $79, which is below the $83 neutral point. Hey, I guess on the bright side, I'm only down 400 bucks and I own 100 shares of Apple that I bought at $95.
Next up? I'll probably ride out the old call position since it will clearly expire worthless. While Steve Jobs is important to the company, Apple doesn't go insolvent without him. Markets overreact; I'll let this play out. And this isn't just about the money. I hope to see Stevo back in the driver's seat with a speedy recovery.