Philip Davis

Options Trader: Monday Outlook

IMAX - bad math, it was just 7%. It was a no trade anyway as the calls dropped way down in value this morning. I suppose the pre-movie excitement had them in a slightly higher premium.

Options Trader: Tuesday Outlook

I don't know of a proper Dow study. The S&P routinely changes components too and the Russell just rebalanced but with the Dow just having 30 components, you really can't just go pretending it doesn't matter when you trade 2 in, especially with their whacked out weighting system - that in itself could have used an extensive study to figure out what the hell they did.


SC Boeing: www.bloomberg.com/apps...

I would understand the lack of action by the government if the situation was insoluble, but it isn't. It just takes firm action and some vision. Unfortunately, those are things we are very short of in our government.

Options Trader: Friday Outlook

My prayers are with you Blue! We're all getting religious over on my board today...

Actually we've been buying as planned, very pleased to get the bargains today and going with 1/2 covers into the weekend.

Options Trader: Wednesday Outlook

Durables - not great but BTE. Unfilleds are interesting and inventories are an issue with the GDP tomorrow.

SUN - We know they have problems so we took the 30% gain off the table, VLO was a double and we're out of that too.

Looser than what Jigs?

Drawdown - Don't forget that retail stations were stocking up for the holiday too. That won't be reflected this week but next week the disappointing weekend driving might cause some serious blowback. It's ridiculous anyway when imports drop 696Kbd and they try to say there's tight supply.

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.

Financials and Retail: Not as Dire as They Seem

Wow, what a great discussion on this post!

So yes, that's a very good point about looking at the dillutive number of shares relative to earnings after the acquisitions, I will do that next time I revisit the banks.

I don't think WM is particualraly good but I do think that, like Chrysler and GM, they simply won't be allowed to fail. Also, even if the banks do repossess 20% of all the homes they lent money on and even if they only get 60% of the value they wrote a mortgage for, it will still be more money than what they've written off already. $400Bn in write downs is $200,0000 on 2M homes worth of value written off, that's some pretty steep discounts!

So yes, I think it's bad but, as hopeandfear says, not THAT bad. Who are losing their jobs? Construction workers and finanical workers - isn't that to be expected in a housing slump? I must say today's actions make things seem very dire, it's like people just can't get out of the markets fast enough...

Financials and Retail: Not as Dire as They Seem

Not sure you read that right, we're buying the financials! Picked up WM July $12.50s today because they were so cheap and C as well.

U.S. Banks Still Need To Come Clean on Subprime

$235Bn is the amount of Sub-prime ARMs alone, multiply your figure by 6 and that's the number of total loans at risk, current delinquency rates in the sub-prime category are 20% and climbing but Seeking Alpha retitled this post from my original "What Doesn't Kill Us, Makes Us Stronger" and caused a very interesting change in tone to the article. If you read it as it was intended, you'll notice I picked Citibank as a buy - I was saying it was good to put this behind us but, as always, we will keep our eyes on the very real issues that are destroying the lives of millions of homeowners. It's easy not to care - we take the harder path.