Options Trader: Monday Wrapup

by: Philip Davis

Oh no, not again!

We hit all of our targets and pulled back. If you want the numbers with charts and graphs see last week's column, or the week before, or the week before that one...

I've got to tell you though, I'm liking the Dow chart! I think it needs a little something but it will be up to some biggies tomorrow like HD, ANF, AEOS, BJ, PETM (people cut back on pets before they cut back on themselves), SKS, UBS and the biggie, WMT.

Wednesday we get HPQ, MW (men cut back earlier than the rest of the family), NTAP, OHB (very interesting), CRM and EL (see if women are cutting back discretionary).

I'm not going to get too excited though as today's action was dreadful and the transports and the SOX both put in very lame efforts.

Oil "held" $73.50 finishing conveniently at $73.53. It looked like they had a hard time getting it there but it was enough to turn the oil patch up for the rest of the day.

Gold fell to $639 as the dollar took a mild rejection off our target, inflation data will drive it for the next few days as rates have already shot up in anticipation of painful CPI and PPI numbers.

Like I said last week, we need to be in day trade mode and take profits off the table quickly as a lot of early winners turned into losers after 2 pm.


MED had an 89% increase in revenues and a 100% increase in income, they raised guidance and announced that they will move to the NYSE. This caused the stock to drop 13% after hours (so far). Frankly that is just great if you bought the stock and sold the Sept calls, we'll see how it ends up tomorrow.

GM went way the wrong way today but the Sept $30 puts are still $1.60. GMAC anounce a $10Bn funding with Citigroup which should give the stock a bounce tomorrow on the headline but the credit is being extended BECAUSE GMAC is being spun off so it is not really good news for GM.

HD looked very scary today. I was in and out of the $35s for a quick early profit which I rolled into the Sept $35s for .50 at the close as I felt that was just too cheap.

Tempting though it is, I'm going to wait to see if ATI can go any lower than this, I'm hoping for $54. I will use BA as a buy signal - I think it is being held down into option expiration this week.

PD gave us a nice discount at the open and the Sept $80 puts came in at $1.50 but they finished weakly at $1.75 as sentiment changed in the options. The Jan $82.50 puts did much better at $6.40 (up 9%).

GE stopped me out today as the Sept $32.50s ran all the way up to $1.20 (up 80%). I'm hoping for a reentry here.

XOM $67.50 puts jumped in early trading so I got out quick and the Sept $67.50s ran up to $1.05 (up 15%) from today's repick and up 65% from last week's spread play!

SUN Sept $75 puts opened high at $2.15 but made it to $2.70 at the days end (up 25%).

CAL opened too high to play, which was good since it died later!

CVX Sept $65 puts had a great open at .90 and finished at $1.10 (up 25%).

ECA dropped too fast and the Sept $55 puts jumped 35% to $3.50. Our older Sept $50 puts ended at $1.15 (up 30%).

RDS.A actually opened higher with a $1.15 entry and the Sept $70 puts finished at $1.55 (up 35%).

VTS was also slow out of the block but quickly dove off a cliff and the Sept $60 puts finished at $7.20 (up 50%). At this point I have no desire to sell the $55s but the $50 puts are already $1.60 so patience may pay off on our plan! If you took both bets right off the bat the net is $1.30 on the $1.70 investment and should be cashed in (80% in one day, come on - take the money!).

OLED has earnings tomorrow. I love this company and hope they do well but it may be years before their amazing display technology really pays off.

Apple almost got away but pulled back, it's just teasing me at this point...

CPKI is back on a roll, up another 1.5%.

CSCO jumped to $20 today, oops - might have gotten out too early with that 365% profit!

EBAY ended flat but showed what it's capable of this morning and the Oct $25s are a buy again at $1.55.

HET finally woke up and the Sept $60s are already in the money at $2.90 (up 35%) while the Nov $65s hit $2.15 (up 60%).

INTC finally started moving.

STX finally got it in gear with a 2% gain and the Mar $22.50s hit $1.75 (up 25%).

UNH showed signs but faded out.

I'm so glad I didn't play Dell to recover. It's old news but they are recalling 4M laptop batteries which were the cause of our original short back when it was a $30 stock!