Kevin M. O'Brien's  Instablog

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MichaelJ8 Comments (126)
 
just curious, the quick price hike on tuesday to 72 and change? did this change your strat? did you use a straddle instead of a strang... or did you already have the options the week before when mon was at 70 and change. Thanks...
5 Jan 2012, 11:17 AM Reply Like

Kevin M. O'Brien Comments (1800)
 
I had the original strikes and the run-up Tuesday helped. MON would be up even more if the markets were positive. I took profits and out of the trade.
5 Jan 2012, 12:15 PM Reply Like

leokaplin Comments (206)
 
Just wondering if you saw the MON true breakout?
5 Jan 2012, 11:41 AM Reply Like

Kevin M. O'Brien Comments (1800)
 
I figured it would make a large move. If the markets were positive, MON would be up huge.
5 Jan 2012, 12:13 PM Reply Like

arronsky Comments (26)
 
crushed it on this trade. NICE work! I held on a bit longer than you and got rid of the call at 5.8 (it then ran up to 6 and change, but this was a 200%+ trade).

I still own the puts, which are now paid for, as I think they'll earn back some of their value over the next couple weeks. Did you close them out?
5 Jan 2012, 12:11 PM Reply Like

Kevin M. O'Brien Comments (1800)
 
I sold out completely. A bit too soon, but I always take profits when there, especially on a down day for the markets.
5 Jan 2012, 12:14 PM Reply Like

Kevin M. O'Brien Comments (1800)
 
There's a chance the puts may have value. Glad you did well.
5 Jan 2012, 12:16 PM Reply Like

arronsky Comments (26)
 
thanks for the posts... very excited to see you hit that $40K target this month! From what I've seen, you will.
5 Jan 2012, 12:26 PM Reply Like

Kevin M. O'Brien Comments (1800)
 
Thanks. I got some great trades coming up that should work great.
5 Jan 2012, 12:27 PM Reply Like

GoochyPuppy Comments (262)
 
What do you mean by "MOS shaping up nicely"? The post-earnings price is virtually flat; resulting in the volatility premium being sucked out of the options (as is typical post-earnings, of course), and now we're sitting on steady Theta decay against us.

Remember, I personally usually take the opposite side of this type of trade ... I sell an Iron Condor just wide enough to account for typical earnings moves (which ... IMHO and IMLE (in my limited experience), are, on average, much smaller than the pre-earnings volatility implies, or that the market expects...
5 Jan 2012, 03:08 PM Reply Like

Kevin M. O'Brien Comments (1800)
 
Well of course you came in past 3:00 EST, but the price was near $55.00 when I wrote the comment. No worries. Patience, my friend.
5 Jan 2012, 03:21 PM Reply Like

GoochyPuppy Comments (262)
 
Indeed... I apply my "opposite" strategy only close to expiration, so it becomes an "all or nothing" play. Whatever range the post-earnings price lives in the day or two or four left before expiration (I would have sold the Weeklies, in this case of MOS...), determines whether I hit max profit or max loss (though sometimes it's on the slope and ends up being break-even ... minus commissions). We'll see...
5 Jan 2012, 03:40 PM Reply Like

hpagey Comments (4)
 
great trade. Closed out successfully up 1k.
5 Jan 2012, 03:34 PM Reply Like

Kevin M. O'Brien Comments (1800)
 
Nice work. Glad you did well.
5 Jan 2012, 08:51 PM Reply Like

fantabella Comments (4)
 
Great call on MON. Closed out with a profit of $900.00. Great work Kevin.
5 Jan 2012, 05:45 PM Reply Like

Kevin M. O'Brien Comments (1800)
 
Same as me. Good work.
5 Jan 2012, 08:51 PM Reply Like

rainmaker03 Comments (31)
 
Kevin,

based on the earnings and guidance what is your feeling about how MOS will move? I'm holding $47.50-$50.00 put spread with $52.50-$55.00 call spread. Right now looking at a 23% loss. I believe your trade is structured $55.00 - $57.50 on the call side and $50.00-$52.50 on the put side- are you still confident that MOS will reach $57.50 by earnings or are you banking on a drop to $50? Either way I know it doesn't matter as long as it hits one or the other but I'd like to know your sentiment.

Earnings good, Q3 guidance so-so, year guidance good - I could easily see MOS trade sideways or just be pulled along by whatever direction the whole market goes.

thanks,
RM03
6 Jan 2012, 06:29 PM Reply Like

GoochyPuppy Comments (262)
 
I agree with rainmaker03; as I say, redundantly, I am a firm believer in directionless trading and believe that options tend to overprice realized volatility. MOS could, just as likely as any other equity, be a solid example of this, with flat trading through OpExp.
6 Jan 2012, 07:42 PM Reply Like

lcpl2378 Comments (5)
 
Nice call on MON, made some good scratch for the weekend!
6 Jan 2012, 07:06 PM Reply Like

Kevin M. O'Brien Comments (1800)
 
Thanks. I will be making a decision on Mosaic either tomorrow or Wednesday.
9 Jan 2012, 07:38 PM Reply Like

JohnP3 Comments (6)
 
Thank you sir for sharing your wisdom and trades. I look forward to reading about your thoughts and insight whenever they are available.
9 Jan 2012, 07:33 PM Reply Like

Kevin M. O'Brien Comments (1800)
 
Thank you, much appreciated.
9 Jan 2012, 07:38 PM Reply Like

rainmaker03 Comments (31)
 
Hi All,

I went ahead and closed out on MOS when it hit 55.15 for a 8% gain. It hit the upper BB, and now it looks like I timed it right. Seeing as the trade was down 28% overall for me as of yesterday, I will take it.

For those of you who are interested in seeing how another person (I definitely wouldn't call myself a trader) has done, here are my results. I have been following Kevin now for several months. While I don't do every trade he recommends (and have missed out on some goodies) so far the results have been excellent.

Successful:
NFLX (up 100%!) strangle
FFIV strangle
AKAM strangle
ORCL RIC
MON strangle
MOS RIC

Not Successful:
ARUN strangle

Broke Even:
GOOG RIC - closed it early yesterday, too risky for me, I may attempt a weekly expiration RIC the week of earnings

In play:
MON RIC (looking very good), as an experiment I opened up an RIC with the strangle
GLD RIC (looking good)
JPM RIC (looking good)
C RIC (looking good)

I do have concerns about opening up positions too early, but I can't argue with the results so far. Trading with Kevin has been brought back excellent returns.

thanks,
RM03
10 Jan 2012, 04:04 PM Reply Like

Kevin M. O'Brien Comments (1800)
 
Thanks Rainmaker- I closed the GOOG trade earlier today and will re-enter next week. The huge downward swing yesterday made this somewhat necessary. Still a great opportunity next week with GOOG.

I should have some more articles out soon, but I have been extremely busy with relocating.

Thanks again.
10 Jan 2012, 06:08 PM Reply Like

tstanulis Comments (4)
 
Rainmaker,

When you say it hit the upper BB does that mean that you are fusing together Kevin's RIC strategies with his intra-day trading system to find good entry and/or exit points? (I considered exiting the MOS near the spot as well but I am holding out for now...)

If so what kind of timescale are you applying to the charts? I would assume something wider than the 1 day w/ 2 Minute increments when applied to positions meant to be hold up to a week?
10 Jan 2012, 09:32 PM Reply Like

rainmaker03 Comments (31)
 
tstanulis,

I'm not a day trader but had concerns about the MOS trade after their earnings were announced so I have been following it very closely. If their earnings *and* guidance had both been extremely bullish like MON I wouldn't have paid attention to any technicals as I would have felt comfortable giving MOS more time to rise.

But due to my nervousness as indicated in an above post I was looking for any opportunity to get out of the trade with a minimal loss because I think MOS will be pulled by whatever way the market goes in the near future. When MOS spiked at the end of the day yesterday and hit the upper BB that I was my cue to close it out. MOS could very well end up at $55 by the end of next week for max profits, but I'm comfortable exiting the trade now as I'll roll over these funds into other goodies that Kevin is brewing up for us.

RM03
11 Jan 2012, 12:31 PM Reply Like

Novita Comments (16)
 
Have you decided how to close the ric on MOS?
12 Jan 2012, 11:05 AM Reply Like

GoochyPuppy Comments (262)
 
Still no update on MOS?
18 Jan 2012, 06:52 PM Reply Like

GoochyPuppy Comments (262)
 
I don't think my expectations are unreasonable. If the author is proposing a personal portfolio double using a particular strategy and actually list specific entry points, then I believe that was misleading if he did not intend to publish all the exit points and the net profit / loss of each trade.

i.e., He leads the reader into following his articles with a lofty goal (portfolio double during January 2012) and yet he doesn't intend to follow through on the results? That's rather flaky ... in my humble opinion.

No personal offense intended here. I'm just pointing out how this looks ... to ME.
21 Jan 2012, 03:30 PM Reply Like

Kevin M. O'Brien Comments (1800)
 
That is fine how it looks to you. I do not really care. However, read what I wrote to you earlier. Tell you what, post our own articles, see how the editing and time-related posting of articles actually goes, and then get back with me.
21 Jan 2012, 03:36 PM Reply Like

GoochyPuppy Comments (262)
 
Please see my query on the $20,000 article, here: http://seekingalpha.co...

I reiterate that I do not understand why it was not possible to publish the closing trade (if any) of the MOS position that you published _opening_.

I also reiterate that I'm not meaning to disparage you here: I'm just asking this so that myself, as well as other readers following the MOS or other _opening_ trades you publish, will know what to expect in regards to _closing_ trades.

Thank-you.
22 Jan 2012, 04:53 PM Reply Like

Kevin M. O'Brien Comments (1800)
 
Do you want a bib and pacifier with your trade, too? I can't walk everyone through their trades, nor tell them when to close it! That is your own responsibility. Find something better to do.

Thank you.
22 Jan 2012, 05:03 PM Reply Like

GoochyPuppy Comments (262)
 
Yes, actually, I'd prefer a pacifier to your unprofessional insults. Grow up and act like an author, not a school yard bully. Geesh... way to treat your readers.
23 Jan 2012, 03:31 AM Reply Like

Kevin M. O'Brien Comments (1800)
 
You have been constantly, insistently making disparaging remarks on my articles. That's all I will say about that.
23 Jan 2012, 09:06 AM Reply Like

ckoteles Comments (19)
 
Can someone please link me to where this trade was initially discussed? New to SA and haven't figured it all out yet.

Thanks!
21 Jan 2012, 10:13 AM Reply Like

Glenn Z Comments (22)
 
http://seekingalpha.co...

For future reference, at the top of this page on the left side you'll see a little box with links to the author's past articles, instablogs, etc. That box is there for any author so you can find their past posts.
21 Jan 2012, 02:04 PM Reply Like