Seeking Alpha

Philip Davis'  Instablog

Philip Davis
  • on Market Outlook
Send Message
Philstockworld.com is the fastest growing stock and option newsletter on the Web. "High Finance for Real People - Fun and Profits" is our motto and our Basic and Premium Chat Sessions offer readers a chance to speak to Phil live during the trading day as well as authors like Optrader,... More
My company:
Phil's Stock World
My blog:
Phil's Stock World
  • Testy Tuesday - 1,072 or Bounce!  0 comments
    Oct 4, 2011 9:08 AM | about stocks: CMG, DIA, DXD, EDZ, EEM, FCX, GE, GS, IWM, MS, SPY, TLT, TNA, VXX
     

    SPY DAILYHas it been a week already? 

    That’s right – last Tuesday our title, after 3 bullish days, was "S&P 1,200 or Bust (again)" and bust we did!  At the time I said "It’s not that I’m flip-flopping – we’re simply playing the range and if the trip from the bottom to the top of the range is just 2 days – then flip-flop we must!"  Our bearish hedge in that morning’s Alert to Members was 30 DXD Oct $18/20 bull call spread at .70 ($2,100) offset by the sale of 10 GE Jan $15 puts at $1.05 ($1,050).  DXD is already at $21.34 and the bull call spread is $1.30 (30 = $3,900)while the 10 GE short puts are $1.75 ($1,750) for a net $2,150, up 105% in the first week – even if the short puts were not stopped out with a smaller loss.  

    We also ran our Long Put List that morning (see Weekend Reading for recap of that strategy and list of short trade ideas) and those, of course, are up huge across the board as things got so bad yesterday we even had to short IBM – our list’s last brave holdout.  Another fun short we played that day was a ratio backspread on CMG.  

    Taking advantage of selling into the pre-earnings excitement, we were able to add the following trade to our virtual $25,000 Portfolio:  

    Earnings are on the 20th, the day before expirations so I like the volatility crush of selling 5 $340 calls for $9 ($4,500) and buying 3 Dec $350s for $15 ($4,500) for a free spread.  No matter what CMG does, $4,500 of premium will be gone from the callers on Oct 21st, then the Nov whatevers can be sold, hopefully for another $4,500 in premium or perhaps we can just pull the trade so let’s do one set in the $25KP and see how it goes. 

    EEM WEEKLYCMG took a nice dip since then (now $292) and the 5 Oct $340 calls fell to $2.20 ($1,100) but the 3 Dec $350s have held $8.60 ($2,580) for a net profit of $1,480 off a trade that cost no cash just 7 days ago.  These are the kinds of trades we love around earnings season.  We didn’t need to hold it for a month and now we can free up the margin (about…
    continue reading

    Posted in Immediately available to public


    Tags: BNPCMGDIADXDEDZEEMFCXGEGSIWMMSSPYTLTTNAVIXVXX


    Email This Post Email This Post Facebook Twitter  LinkedIn del.icio.us Digg

    Stocks: CMG, DIA, DXD, EDZ, EEM, FCX, GE, GS, IWM, MS, SPY, TLT, TNA, VXX
Back To Philip Davis' Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

  • Join us for a FREE Live #Trading #Webinar at 1pm (EST): #NYSE $IWM $SPY #Futures -- http://bit.ly/1hv6mEp
    about 19 hours ago
  • Goaaaaallll on #Gasoline #Futures and Morning Market Overview: #China #Currencies -- http://bit.ly/1MWy22u
    6 days ago
  • On Radio Yesterday, we called $NFLX short and $LL long - Winner, winner today! -- http://bit.ly/1WH7ViW (starts at 1:00:00).
    Aug 20, 2015
More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.