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Philip Davis
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  • Phil's Warning On TBills and 2 Downside Hedges 0 comments
    Sep 27, 2010 3:51 PM | about stocks: TZA, EDZ, OIH, DUK
     Phil -   September 27th, 2010 at 3:46 pm |  
     

     Market sooooo heavy………  hard…. to… hold….  up……….

    PGN/Pharm - What happened to the circuit breakers?  Man, I have no faith in these systems at all!  

    Hedges/Tcha - I think we did those on Friday.  TZA is good as you can sell Nov $23 puts for $1.55 and that pays for a $25/31 bull call spread at $1.85 so net .30 on the $6 spread that’s $1.80 in the money now (up 500% to start!).  

    EDZ is also good if our earnings are a miss and you can sell Nov $24 puts for $1.25 and that pays for most of the Nov $27/31 bull call spread at $1.40 for net .15 on the $4 spread that’s $1.80 in the money so up 1,100% if they flatline from here!

    OIH/Rez - Oh, we got out of those the next day.  I’d hang on at this point through Wednesday but any chance to get out even, take it.  

    Flashes/Pharm - I don’t care if you don’t trust the market - trusting the government to pay you back at all in 10 years is dodgey and believing that the dollars they give you after they rack up another $15Tn in debt (not to mention after a decade of unfunded baby boomer obligations coming home to roost) will be worth anything like the dollars you gave them a decade before is not even in the realm of rational.  I am not joking - it’s not…  People buying long-term TBills are simply not thinking things through at all. 



    Disclosure: Positions as indicated but subject to change
    Themes: Hedging, Options Strategies Stocks: TZA, EDZ, OIH, DUK
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