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Robert Edwards: Current Trading Ideas For February 19, 2013

|Includes:Apple Inc. (AAPL), APOL, DUST, GDX, HLF, NUAN, NUGT


Short DUST ETF and do naked short selling of far out of the money DUST calls. Over the weekend I did a study concerning gold stocks, as the GDX ETF is very oversold. Also checked out the gold stock triple ETFs of NUGT (if bullish) and DUST (if bearish). Decided that although gold is trading 100 dollars above the critical 1500 support level, GDX is below 40 and near major support. Gold stocks have greatly underperformed the metal and they discount a lot of bad news. Gold stocks are a leveraged play on the metal and that works for you on rallies but causes harder selloffs on weakness. I believe the weakness in GDX is overdone. Earlier when gold stocks were at this same level just under 40 on GDX, DUST topped out at 77 and 60. Now DUST is in the 47 to 48 area. On Tuesday, sold DUST Sept '13 60 Calls for 6.90. If gold stocks get weaker and DUST rallies from 48 to 67 then I will allow myself to get exercised and be short DUST. I will wait until I get a short-covering rally in GDX which will bring the price of DUST back down. DUST spikes strongly but comes tumbling back down every 3 to 6 months. Thus I sold September DUST calls, 7 months out. It would take a 15% additional sell-off in gold stocks without any bounce to get DUST to rally high enough to hurt me. I don't see that happening. Shorting the gold stock triple short ETF DUST is the best way to get long gold stocks because the slippage works for you. Shorting DUST is much better than going long NUGT. I also sold some 17 strike GDXJ puts expiring Friday, 3/16 as a way to maybe get long the junior miners at an extremely low price.

APPLE (NASDAQ:AAPL) Tuesday, 2/18 makes 5 straight down days in Apple. I doubt we see six. Bought calls on Tuesday weakness and sold out on close near unchanged. Still hold calls purchased on Friday, 2/15. If the company would come out with a surprise announcement, this stock could pop $50 at any moment.....probably sooner rather than later.


HERBALIFE (NYSE:HLF) Sold out of the money puts on Friday that were bought back on Tuesday's strength so I could go flat through earnings. Will look for weakness to sell out of the money puts again. Check out my latest HLF article here:

PETROBRAS (NYSE:PBR) On Fri 2/15 sold 16 strike puts expiring 2/22 and 3/16. Nice pop on Tuesday to make these immediately profitable.

NUANCE COMMUNICATOINS (NASDAQ:NUAN) With Friday's dip back to 18.70 area bought more shares. Looking for quick move back to 20.

APOLLO GROUP (NASDAQ:APOL) Resold 20 strike puts that were exercised putting me long the stock. On the move up to 19.45 today, sold stock at a 55 cent loss but with 67 cents premium received on the puts, made a small net profit and am now flat.

MOLYCORP (MCP) Did double calls for last week for nice profit, but this week 2/3rds of shares are not covered. Need a rally to 7.50 to 7.70 to get rest of shares covered in calls expiring this week and next.

Disclosure: I am long AAPL, MCP, NUAN.

Additional disclosure: I am also long AAPL calls, short DUST calls, short PBR puts, short GDXJ puts. My positions change daily.