Philip Davis

Options Trader: Thursday Outlook

Oh, so 8M more shares and TASR should start going up.


Applefly $10KP/$25KP - Rolling $155 callers up to $160s for $3 XXX Same for DTP

Options Trader: Thursday Outlook

CROX breaking up. GRMN flying, lots of our stuff doing well, I think we're getting a turn up here.

NVDA still down but I still like them.

TASR just getting worse and worse. Huge volume, 5x normal day so far with over 10% of the float being dumped this morning. There are 17M shares short at around 10 and they'll cover at $7.50 so this is probably the right spot.

Options Trader: Thursday Outlook

Our site is down so I'll comment here if anyone is around.

Options Trader: Wednesday Outlook

Actually we haven't been short on oil since we made a fortune in the fall when it double topped at $100 and we bet the farm both times. We started shorting again at $110 with a plan to roll up and double down on our puts for 3 months but we already had a great expiration in March when oil plunged from $110 to $98 so this (April) looks to be a losing month for us if you don't count SU, who just made us a mint, or OIH, who just made us a mint or BTU, who just made us a mint but XOM, CVX, USO and XLE haven't paid off for us yet but please sell us puts at these prices if you are bullish.

Just this Monday, right here in SA, I said buy PTR (up 13%), FTO (down 5%) and COP (even) as hedges against our puts on SU (down 4%), USO (up .5%) and XOM (flat) so I can only assume you don't actually read the posts, just spout off against anyone who challenges your world-view.

Of course at $120 we went all short and you can tell me how smart you are in June if oil holds up here but I say it's unsustainable and that's where we're placing our bets but we need people like you or we couldn't possibly find people willing to bet oil goes higher from here so thanks for being there for us!

Bluedog - I won't get into WHY a guy who's taken over $250M in contributions from oil companies won't release the SPR and knock of $7.3Bn in annual revenues for each dollar a barrel oil goes down (think about how cheap that ratio makes it for oil companies to buy politicians, pay off Nigerian warlords etc) because Yape will call me a dope or Michael Moore and hurt my feelings...

Options Perspective on How To Play Google Post Earnings, Plus C, BAC, XLF

LOL Silverspring! That's a lot of stuff. We teach this all on my site every day but the basics here are my 1/2 covers are owed $70 and we roll them into 2x whatever is $35 even but, by spending $10 more each to roll them up higher, we put them into May calls that are 100% premium. The gist of this is that rather than paying my caller the $75 I owe him, I force him into taking another round of high premium positons, giving me another shot at "beating him" while his $25 calls do an adequate job of protecting my Jan positions.

Of course today we also rolled up out of our Jan $420s as there was no need for us to be that deep in the money now that we see GOOG held up over the weekend.

Options Trader: Friday Outlook

I'm talking about PTR as an oil company which is part of the global run-up in oil which is causing inflation, nothing at all to do with China.

To clarify the point you guys seem to be trying to make about China - Yes, the anti-China rhetoric is ridiculous. America outsourced it's factory work to China and with it we outsourced a lot of very crappy jobs and a lot of pollution and a lot of health-care costs and a lot of social programs that were needed to care for under-paid factory worker families.

We also oursourced a tremendous amount of oil consumption, none of this is a really bad thing. Factory jobs began in the East coast cities and, as those areas became more prosperous they moved to places like Detroit BECAUSE prosperous cities don't want those jobs!

People have this Norma Rae vision of the glory of factory jobs but the reality of factory jobs is huge bankrupt companies like GM that can't afford the concessions they made in the 60s. How many people do you know who say "Oh I used to sew hair into Barbie dolls 10 hours a day - I wish I had that job back"?

So China can have the bulk of our manufacturing and when they become more prosperous, they will outsource those jobs to Africa (my investment prediction for 2025). Where we (US) are failing is in replacing those jobs with "high-tech" manufacturing jobs becuase we don't do enough R&D anymore to create the next big thing - that's not China's fault.

XOM spent $31Bn last year buying back their own stock and another $8Bn on dividend payments. This creates nothing other than fleeting shareholder wealth. During this time their CapEx was just $15Bn out of $404Bn in revenues (R&D spending = 0). No wonder PTR is catching up to XOM in market cap, at least they look for oil!

I like PTR, really I do, but all the oil majors have let their costs run wild (as evidenced by the record numbers being posted by the oil service companies, tanker companies etc) and that is a very dangerous position to be in when all they sell is a variably priced commodity.

Options Trader: Friday Outlook

I agree with you guys 100%, I was talking about PTR/Oil Prices being the root cause of inflation, not China but I do see how that's unclear to people who don't read me every day.

How To Solve the Housing Crisis Tomorrow

$6Tn worth of loans were written to the "deadbeats" you want to evict last year so the government doesn't have to print money, they simply use their good credit to purchase assets, the only difference is that they are not jacking up the homeowners with fees and interest rates.

Unpaid mortgages will be treated normally, the idea is that most people CAN afford to pay a 50% reduced mortgage.

If you have to resort to red baiting by your third question then you are already deep in a hole aren't you?

25% bonus. Well you must have $25K (or 25% over the loan amount) in value in the home to give. This automatically weeds out people who made no deposits, overpaide etc as we are not looking to bail out bad lenders or bad buyers.

We could work with the lender to improve the equity in a number of ways (yes, they could take a haircut rather than foreclose).

We are not inflating prices, we are maintaining prices at this level which I would grant may be inflated but that damage is done. Allowing the free market to take its course and wipe out another $5Tn in home values may sound fun for the vultures but it will certainly wreck the economy for many, many years.

Yes the government is in up to its eyeballs with Fannie and Freddie anyway so it is very much in their interest to soft-land the housing market any way they can.

Options Trader: Thursday Outlook

Thanks CNG! Actually my site is all about options, what Seeking Alpha uses are just my morning posts, where I give a macro view of the global economy. It's much easier to spot good trades if you know what is going on in the world...

I did pick an option on this post, it was JOSB May $22.50s which opened the day at $2.40 and finished the day at $4.50 (we also sold covers and rolled them during the day on the member site). If you read what I was saying, I came to the conclusion that JOSB would beat earnings DESPITE the poor retail report because of the poor economy driving men to buy suits to look for jobs.

This is how fundamental traders pick stocks, by studying the market and the news that affects the market. I'm sorry that bothers some of you but it's our system and it works for us.

Brother, Who Can Spare Another Dime for Oil?

User 161473 - I do appreciate the link list but I don't have a production question. While production could obviously be increased somewhat the answer is conservation. The US auto fleet consumes 25% of the world's gasoline with a world-wide low average of 17.9 mpg (vs Europe's 35 mpg requirement). That means a 5-year program to bring us up to EU standards could cut up to 5Mbd of global consumption. Pushing solar and other alt energy can cut another 3-4 Mbd over 10 years and if other countries are 1/2 as successful then global consumption can be reduced from 85 Mbd to perhaps 60 Mbd or less in about 10 years.

That would make production peaks pretty much a non-issue wouldn't it. When you are running out of something, finding ways to use it up faster is not always the best answer but just look at the Army, who awarded the fueling contract to Airbus even though the BA tankers used 20% less fuel because "fuel was not a consideration" - That kind of gross negligence comes from the top and it's a culture of waste that can only be eliminated by strong leadership.

Brother, Who Can Spare Another Dime for Oil?

The Ultra-deep drilling funding is a very complex road and has been blocked by both sides of the aisle at times but, recently, it's been the Republicans blocking the bill. I don't make these things up, the link to the original article is right in my post, here's a background paper on the R&D issue:

dpa.aapg.org/testimoni...

I see you focus on this one issue and then launch into an off-topic attack on Hillary but the fact is that Bush (who IS a Republican) had done NOTHING to conserve energy, despite the attack on our country during his first year in office and has, in fact, become the world's single largest buyer of oil and has knocked out the oil production of Iraq and made virtually no progress improving that over 5 years.

Those are facts, probably a 3M barrel a day swing in consumption between Bush and pretty much anyone else who was faced with the same situation and gave a damn about solving the problem.

Defend it all you want, vote Republican no matter what, that's all up to you but I am mad as hell and I am not going to take it anymore and I will work for a real change in this country and that includes replacing jokers like Markey with men of action who will do a lot more than point fingers at these crooks.

Options Trader: Monday Outlook

90K bankruptcies x 12 months = 1,080,000,000, just about 1% a year, should have clarified the year part.

McDonell - LOL, been so long I forgot their name!

Sorry user 153975 but I used to be the only options guy on SA and they tagged me with it. I don't like the title either. My site specializes in options trading but my morning posts are generally market overviews to set up the day's trading.

Meredith Whitney's Out on a Limb With This Citi Bashing

C update - we flipped to the June $25s at $1.70 when C broke over $23.50, couldn't resist...

Options Trader: Tuesday Outlook

VR - I did write a follow-up article over the weekend, click on my link on the top left to read it.

MJN - sorry but politics tends to affect stocks so we follow them. It was our political observations last week that led us to be bullish into the weekend as Paulson was being shuffled off to China and Bush is off to Eastern Europe and Cheney is safely back in his undisclosed location.

I'm not sure what your investing premise is? Pretend politics aren't part of the investing climate? Should we ignore just Bush or Congress too or does our head have to go in the sand when Paulson or Bernanke speak as well. I suppose we could ignore Supreme Court decisions, the SEC and the FCC and pretend our lives are ruled by squiggly lines on a graph and not by the socio-economic forces that we theoretically elect these people to watch over...

Meanwhile, I picked the May $73 XLE puts, which fell from $3.15 to $2.56 at the close (in members site we moved to the May $75s), down 20% for the day.

I also chose XLF $25s, which opened at $1.50 and closed at $2.10, up 28% for the day.

I also gave you MSFT $27.50s which opened the day at $1.60 and closed at $2.20 (up 37%) and the May $29s, which went from $1.30 at the open to $1.64 (up 26%).

The Apple Jan $150s made 10% on the day and the 2010 $150s made about 7% and, as predicted the markets really took off right after the ISM data at 10.

So I'm sorry you don't agree with my politics but they work for me but I will say that comments like yours do remind me why I reserve the vast majority of picks for the member site and I'm sure many analysts feel the same way, you don't pay for this advice yet you somehow feel that it is your right to deride the people who are willing to allow you to benefit from their research. What you gain by anonymously bashing others I have no idea - when I don't agree with something I read I simply move on rather than obsessing about it...

Those of you who are interested can follow VR's link to an article I published last Thursday at which point my members flipped positive on the financials and we picked up all sorts of fantastic bargains but, if you read the comment section where I tried to support my opininion, you'll see that the majority of the people there were much more concerned with being right or coming up with insults rather than having a discussion from which they may have learned something.

I'm not asking you to change, do what you will - but perhaps once or twice take the time to imagine that someone with an opinion that differs from yours isn't automatically an idiot.

Meredith Whitney's Out on a Limb With This Citi Bashing

FYI - in case you are keeping track, we called a top at $23.50 on C and cashed out our April positions and covered longer contracts. We still have our long XLFs but took front-months off the table.

This is all we were looking for, a nice 10% run that gave us about 6 different doubles in the financials. If they trade back down for no particular reason we'll get back in with shorter plays but this was a 100% winning play for us.