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Marc Radow  

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  • Southwestern Energy: Double Down Or Fold? [View article]
    NW,
    I do appreciate your thoughtful analysis and reply. I also understand your perspective. I couldn't disagree more on each of assertions. I want to be careful not to debate you as everyone is entitled to trade as they see fit, but too often investors make decisions on faulty rationale and results are disastrous. Therefore my reply to you isn't so much directed to you... I sense you're convinced about your approach, but rather for a 'silent' audience who may benefit through more clarity, even though one article may move the needle marginally at best.

    1) Whenever you REDUCE your cost basis, RISK is always LOWER. Risk of 'tanking' is GREATER if your cost basis is higher.

    The risk associated to time (all options) favor the WRITER (seller) more than the BUYER assuming there's extrinsic value in the option, ALWAYS.

    Immediate risk is greater than longer term risk... That's not true. Suggest a read-up on historical vs implied volatility. Without a solid understanding here, trading options is guessing. I often discuss when long vs. short term makes better writing sense... not enough room here to fully explain.

    2) Rolling... Buying an option back at a later date exhausts theta (time value) works to the option sellers advantage. Closing options before expiration complicates the overly simplistic ROI analysis you suggested. ROI stats may look good on paper but misses the more important total dollars (premium) collected.

    In SWN, paying 'up' to close an earlier put option to sell a later one where the seller receives even more premium sets the seller of the option with an even lower cost basis, greater premium credit, and with a larger total position size. If you're bullish on the underlying, then the strategy works perfectly. If fundamentally you change heart and believe the equity will fall further, then indeed simply cut losses (i.e. Run & Hide... the later half title of the article).

    Ultimately, writing shorter term options collects less premium. Writing longer term collects more. When the game is to collect as much as you can at the lowest cost basis, and lowest 'if put' cost, an investor will serve him/herself well to go long!

    In closing, thank you for your comment. I appreciate the opening for discussion, even if we disagree. Please take no offense to anything in my reply.

    Good luck to you in trading / investing!
    Marc
    Mar 26, 2015. 11:32 AM | 2 Likes Like |Link to Comment
  • Southwestern Energy: Double Down Or Fold? [View article]
    Kruk,
    Agreed. And also with Black who replied to you earlier... See here too: http://bit.ly/1Nj9yvV
    Long the commodity and SWN.
    Marc
    Mar 26, 2015. 10:52 AM | Likes Like |Link to Comment
  • Southwestern Energy: Double Down Or Fold? [View article]
    Doc,
    There's a lot of good sense to wait and see. I resist the sidelines more however and I still look to be anticipatory vs. reactionary in the energy space (all spaces for that matter). I don't look for mkt confirmations as that's simply following the herd, which never produces good results.
    Thanks for your comment!
    Marc
    Mar 26, 2015. 10:44 AM | Likes Like |Link to Comment
  • Southwestern Energy: Double Down Or Fold? [View article]
    Blue,
    That's a reasonable extrapolation, but not likely to happen. We're concerned primarily with the realized price SWN receives. NG mkts overall will have to deteriorate for your thesis to play out. Then value will increase for the likes of SWN vs even more levered E&P's with higher production costs. So stake your claim on the direction of the commodity and pick a horse to run with. Otherwise it's the sidelines and I didn't want to be there.
    Good luck to you! Thanks for your comment.
    Marc
    Mar 26, 2015. 10:42 AM | 1 Like Like |Link to Comment
  • Harsco Corp. - An American Infrastructure Company Alive And Well [View article]
    market's wobbles are stronger hands opportunity. Best to you in your trading!
    Mar 11, 2015. 03:23 PM | Likes Like |Link to Comment
  • Century Aluminum Company: Promise Amidst Market Noise [View article]
    CENX at $16 is the result of analyst opinion at BofA regarding LME pricing. I've used the fall to average further into CENX. Specifically Jan $15 can be written between $3.8 - $4.1. Assuming you get them about $4. That IF PUT cost basis is $11... 32% downside protection.. The If Put premium represents 25% upside move
    Mar 6, 2015. 02:45 PM | Likes Like |Link to Comment
  • Southwestern Energy To Get Long Energy [View article]
    agreed johnny. If your balance sheet is stretched, you need to hedge... particularly if you've debt covenants to meet (you really don't own anything if it's financed). Staying on point, xec has a strong balance sheet. Swn's was and remains ok too even after the $5b purchase by issuing equity in a hurry at depressed levels.

    Of note, a balance sheet doesn't run out of time or have concern about % of production... just a less aggressive way to play.
    Mar 6, 2015. 11:40 AM | Likes Like |Link to Comment
  • Vanguard Natural Resources: A Few Highlights From The Q4 Results [View article]
    Thx for recap.
    Mar 4, 2015. 11:32 AM | 2 Likes Like |Link to Comment
  • Southwestern Energy To Get Long Energy [View article]
    G-Man...
    Thank you:). Your wisdom appreciated!
    Out of favor stocks... check out my article this morning:
    http://seekingalpha.co...
    Let me know what you think.
    Marc
    Mar 4, 2015. 10:35 AM | Likes Like |Link to Comment
  • Ensco PLC: Dividend Slashed. Now What? [View article]
    really? The collapse in energy has caught many many investors and oil men by surprise. Casey here merely suggests buy the dip and offers esv as the best case in a bad situation...nothing new.
    Worthy is the better allocation (preservation ) capital vs balance sheet destruction to pay dividends.
    You either agree with mgmt or you dont. If supply falls (aka rig count...google Balken rigs in particular ) faster than the mkt is guessing, those nations and companies dependent on offshore will return. Esv may be among the few Lessors to chose from.
    Mar 3, 2015. 10:50 AM | 1 Like Like |Link to Comment
  • MasTec: Opportunities In What's Less Known [View article]
    Maple (& James),
    Weighting in CBI was feeling like an anchor for a LONG time. Thankfully we held in there. Less long snorkel!

    Careful about debt load analysis... while agreed FLR and JEC look good to me and I added those when I couldn't stomach doing more in CBI... it's noteworthy low debt didn't help KBR! Last week was a nightmare and I'll have to look deeper to figure out that abyss. To your point, it appears to me MTZ debt is financing growth of which 45% matures past 5 yrs.

    With Friday's close over $22 given the earnings beat, it's approaching fair (or more fair) value from when I described the investment at $19. 10+% gifts within 60 days are gifts. Not saying sell here, but not compelling to add. Given no yield and importantly margin compression hidden in the earnings report, if you're long shares, maybe sell a few calls against them?

    Even though vol's are falling precipitously, I still like pricing on October's $22 - 25 calls. Nice yield plays.

    Best,
    Marc
    Feb 28, 2015. 08:01 PM | Likes Like |Link to Comment
  • Ensco Slashes Dividend, But Here's Why I'm Not Selling [View article]
    Calm in the storm... Good article. The rationale changes for owning. From an income play to a value / balance sheet. Added to the catastrophe by selling puts (leaps)... generates the income lost and reduces further our cost basis.
    ESV will leverage their balance sheet tomorrow as opposed to appeasing weaker hands (shareholders looking for current income only) today.
    Feb 27, 2015. 02:31 PM | 2 Likes Like |Link to Comment
  • Has Eagle Rock Energy Partners Become The Best Upstream MLP Value Play? [View article]
    eroc up since earnings... go figure
    Feb 27, 2015. 11:33 AM | Likes Like |Link to Comment
  • Has Eagle Rock Energy Partners Become The Best Upstream MLP Value Play? [View article]
    eroc up $.20 since earnings... go figure
    Feb 27, 2015. 11:32 AM | Likes Like |Link to Comment
  • Century Aluminum Company: Promise Amidst Market Noise [View article]
    Free,
    I just had a chance to look back over my shoulder... If you trade options, look at the 'IF Put' cost basis. While there are many ways to analyze, so long as your If Put cost is below the current, you'll be fine as time is on your side.
    No reason to panic... ever! I'm also short Jan $18, avail for about $3. That If Put price is $15... As I write, CENX is trading at $19.65...
    The efficacy of put writing is to be wrong and still make money.
    Hope this helps!
    Feb 26, 2015. 02:14 PM | Likes Like |Link to Comment
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