Options Trader: Wednesday Wrapup

by: Philip Davis

I wasn’t worried, were you?

Well, OK, maybe a little worried, but we quickly got over it. It took us all the way until 9:44 to dump out of our PowerShares QQQ Trust, Series 1 (QQQQ) $47 puts and another 10 minutes to give up on the Diamonds Trust, Series 1 (NYSEARCA:DIA) $136 puts.

We flipped the iShares FTSE/Xinhua China 25 Index (NYSEARCA:FXI) calls from sold to owned right out of the box as planned and we hoped for a Daily Double. We had to settle for just 57% on the Coach, Inc. (NYSE:COH) July $52.50s and 71% on the China Mobile Ltd. (NYSE:CHL) June $45s, though, which were a very nice pick for the free site this morning.

Needless to say, we had a very fun morning and Optiondragon called it at 1:38 when he said we were having a pullback into the Fed minutes. We were all a little cautious ahead into the release, but Dragon once again nailed it four minutes ahead of the Fed by predicting "The Fed will say the same that 'inflation is the main worry for the committee and that the economy looks strong.'" So it was written, so it was done and we were off to the races again just a few minutes later!

Happy $100 Billion

As much as this followed my game plan for the day, I have to tell you I was stunned by the power of the response to minutes which revealed pretty much nothing new about the economy or the Fed’s thinking. I spent too much time reading the minutes and not enough trading and didn’t follow my own advice to buy DIA calls, which I had tee’d up earlier in the morning. Luckily, ZMan and Happy Trading were there to carry the ball with a slew of excellent picks!

ZMan had Noble Corporation (NYSE:NE) June $90s, Newfield Exploration Co. (NYSE:NFX) June $45s and HK June $12.50s, all huge winners on the day as were EOG Resources, Inc. (NYSE:EOG), Chesapeake Energy Corporation (NYSE:CHK), Grant Prideco, Inc. (GRP) and PetroQuest Energy, Inc. (NYSE:PQ). Happy Trading predicted the moves in the Nasdaq, the S&P and the BTK early this morning, but his Garmin Limited (NASDAQ:GRMN) July $65 calls this morning made everyone money as that stock promptly took off after giving us an easy entry. Google (NASDAQ:GOOG) was another big winner at Wang’s World with the July $500s yielding a quick 28%, but it was Apple (NASDAQ:AAPL) that gave us all a reason to celebrate as we wished Apple a very happy $100 billion (market cap) on this amazing move that Happy predicted back on April 1st with this chart:

Click to Enlarge
AAPL - 5 Years - Monthly

We simply have too many Apple positions to list and we couldn’t be more thrilled now that AAPL is moving on up to the vaunted S&P 100, replacing MedImmune, Inc. (MEDI) at the end of trading on Thursday.

We’ll check out our charts in the morning, today was just way too much fun and I’m just not in the mood but, needless to say, I bet they look great! Oil (boo!) went up a bit, but by the reaction of the energy sector you’d think we had a category six hurricane as they all went racing right back to near highs. My plan to sell the Tesoro Corporation (NYSE:TSO) $60 puts worked out well, taking some of the sting out of a huge run in the newly split stock, but Exxon Mobil Corporation (NYSE:XOM) caught me by surprise and I’m back to scratch on my leap puts.

The dollar made a run at 82.50 but thought better of it, gold closed just under the magic $660 mark and , and oil managed to hold $63 with a .34 gain. We’ll see what there is to see at tomorrow’s big inventory report, though, where we plan on taking more puts into the run-up.

Oil and Dollar

A lot of our oil puts stopped out today (and a few we are just plain trapped in), but I’m not going to complain as we find ourselves once again with an amazing looking portfolio.


US Markets

Wall St. is the only place where, when the things people want to buy go on sale, they panic. - Warren Buffet

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