Guest View
User: Pass: | become a member
*** Test Environment ***
Archive for the ‘Uncategorized’ Category

Put Player Positions for a Pullback in Lorillard Shares

www.interactivebrokers.com

Today’s tickers: LO, HMA, AMR & USO

LO - Lorillard Inc. – A three-legged spread involving April contract put options on the cigarette manufacturer appears to be the work of an investor positioning for the price of the underlying stock to slip ahead of expiration. Shares in Lorillard, the maker of Newport cigarettes, the number one menthol brand, are currently up 0.33% to stand at $78.00 as of 12:50pm. The stock rallied as much as 5.7% one week ago to trade as high as $81.18 after the FDA said the risk of lung cancer for smokers of menthol cigarettes does not differ significantly from that of non-menthol cigarettes. But, last week’s sharp run up in LO’s shares was fairly short-lived given other portions of the FDA report that were not quite as positive for big tobacco. One trader expecting Lorillard’s shares to fall in the near-term seems to have established a bearish butterfly spread. The investor picked up 5,000 puts at the April $75 strike for a premium of $4.40 each, sold 10,000 puts at the April $65 strike for a premium of $1.50 apiece, and purchased 5,000 puts at the April $55 strike for a premium of $0.35 a-pop. Net premium paid to initiate the put ‘fly amounts to $1.75 per contract. The trader profits if LO’s shares decline 6.1% from the current price of $78.00 to breach the effective breakeven point at $73.25 by April expiration. Maximum potential profits of $8.25 per contract pad the investor’s wallet in the event that shares plummet 16.7% to settle at $65.00 at expiration. Options implied volatility on the cigarette-stock is up 3.4% at 54.92% just after 1:00pm in New York.

HMA - Health Management Associates, Inc. – Shares in the health care services provider are down 1.4% in early afternoon trade to…
continue reading


Tags: , , ,



“Crashiversary” Week Begins – Just Another Manic Monday

Happy Crashiversary! 

Just 2 years ago this week, on March 6th, we spiked down to a low of 666.79 on the S&P 500.  That move was capping off a relentless drop down from 950 as they year opened and was dashing most people’s hopes of a recovery.  I say most, because certainly not ours as out Members were BUYBUYBUYing that F’ing dip.  I happened to be on TV the afternoon of the crash doing a 3-hour special on Tim Syke’s LiveStock show where I not only made 13 REALLY good picks that made 469% over the next 6 months, but I also explained my logic for buying on that particular dip so it’s worth watching if you have time to kill

That same afternoon, my friendbuddypal Jim Cramer was on TV throwing 5,320 around as a target for the Dow (it was at 6,626 that day so another 20% down) although you wouldn’t know it now because CNBC has redacted the video and changed the text on the link to his show that day.  Fortunately, it’s hard to get rid of video once it hits the web so now you can decide if the new CNBC summary matches the actual tone of segment they are hiding.  MSNBC’s summary of the segment remains: "Mad Money’s Jim Cramer makes the call that the Dow will bottom at no less than 5,320. Listen to why Cramer says the key index could still drop another 1,300 with CNBC’s Melissa Francis."

Click to ViewThe Fast Money crew had a chance to watch my broadcast but still chose to go on with a unanimously bearish show that day and this one you still can catch part of on the official site.  "A lot of people are calling bottoms," said Guy Adami.  "But I still don’t think we’re there, yet. It has to feel like the end of the world before the market can bottom."  

"The data that I’d watch to signal a bottom is the rate of decline slowing," adds Karen Finerman. "But I don’t see that, yet."  "We won’t be at the bottom until the financials participate in the market’s broader moves," adds Pete Najarian.  "I don’t think we’ll get a bottom until we get policy going forward that doesn’t seem like it’s just attacking Wall Street," adds Jon Najarian.  

Crashes tend to make investors fearful and Mr. Buffett says
continue reading




Long In The Tooth Rally

Asia down overnight, futures down, euro rate hike…. rather than rehash it all, let’s get to the bottom of line of picks and performance!

 





Three-Legged Bull Prepares for a PNC Rally

www.interactivebrokers.com

Today’s tickers: PNC, CEDC, SPLS & GILD

PNC - PNC Financial Services Group, Inc. – Shares in the financial services firm are down 1.00% at $60.34 in early-afternoon trade, but activity in May contract call and put options suggests one strategist sees shares in PNC rising sharply in the next few months. The three-legged bullish player appears to have sold 5,000 puts at the May $55 strike for a premium of 1.39 each, purchased the same number of calls at the May $62.5 strike for a premium of $2.15 per contract, and shed 5,000 calls up at the May $67.5 strike at a premium of $0.68 a-pop. The options trader paid a net premium of $0.08 per contract for the transaction, and stands ready to profit should PNC’s shares reverse course and rally 3.7% over the current price of $60.34 to exceed the average breakeven price of $62.58 by expiration day in May. The investor responsible for the trade could accumulate maximum potential profits of $4.92 per contract if the firm’s shares jump 11.9% to trade above $67.50 before the options expire. PNC’s shares last traded above $67.50 back in May 2010. The financial services provider reports first-quarter earnings before the opening bell on April 21, 2011.

CEDC - Central European Distribution Corp. – Near-term options activity on the vodka producer this morning suggests some investors expect the pain of Central European Distribution Corp.’s post-earnings hangover to stick around through March expiration. Shares in CEDC lost 11.2% today to trade at $12.38, the lowest recorded price for the stock since April 2009. The alcohol beverage provider’s shares dropped 45.8% during the trading week, from a closing price of $22.85 on Monday, to today’s low of $12.38. Put buyers in the March contract, however, do not seem to think CEDC has hit…
continue reading


Tags: , , ,



Friday’s Market Blow – Jobs or No Jobs?

DBA WEEKLYWhy are we bearish?  

For one thing, we like to go bearish when the market is testing the top of it’s channel as there is generally a higher percentage probability that we drop than we pop back over.  Secondly, as I mentioned yesterday, it’s not just the Federal Reserve that is in denial but the commodity speculators, the equity investors and even the bond investors as the ALL believe they are going to get paid while MATH says that’s not even remotely possible.  

What is math?  I know – thanks to cutbacks in our education budgets over the past 30 years, that is a question that vexes many Americans and it also creates a perfect environment for the people who CAN do math, those in the Financial sector perhaps, to design endless levels of complex instruments that are all designed to con people who have lower math skills than they do.  

Complexity is good.  Just like the legal scam, complexity forces you to seek assistance with your finances – the more money you have, the more complex your finances become and the more you need help and this allows swarms of leeches or, to be kind, remoras to attach themselves to you and feed endlessly off your earnings and savings (they don’t care which as they will happily destroy the host and simply move on to the next big fish).

Personally, I prefer simplicity.  My Grandpa Max was a Depression kid who built a business from scratch and invested his money well and had a nice life for himself.  He taught me how to invest when I was a little kid and, as you can imagine, he did not ask a "financial adviser" what to do with his money as he had seen where that had gotten his parents generation when he was young (he was 24 when the Global markets collapsed).  

Our investing days would begin by reading the papers (not just one – they all say different things, don’t they) together and pointing out things that looked interesting.  Not just the Business Section but whatever seemed like an important World event or a trend worth watching that would help us get ahead of the curve with our stock selections.  This is pretty much what I do now isn’t it (thanks Grandpa!)?  So, I will share with you what I consider the most
continue reading





Straddle-Strategist Sells Flextronics Options

www.interactivebrokers.com

Today’s tickers: FLEX, BMY, CQB & TSS

FLEX - Flextronics International, Ltd. – The Singapore-based provider of electronics manufacturing services popped up on our scanners after one big player sold a massive straddle in the July contract. Shares in Flextronics are currently up 5.0% at $8.14 as of 11:55am in New York. The sizable straddle play composed of a total of 49,000 FLEX options is almost on par with the overall level of open interest on the stock of 56,483 contracts. It looks like the investor is reeling in time-rich, in-the-money call premium as well as just out-of-the-money put premium, in the expectation that volatility will come off and shares in the name will remain around this level. The straddle-strategist sold 24,500 calls at the July $8.0 strike for a premium of $0.70 each, and sold 24,500 puts at the same strike for a premium of $0.60 apiece. Gross premium pocketed on the transaction amounts to $1.30 per contract. The trader keeps the full premium received on the sale as long as shares in FLEX settle at $8.00 at expiration in July. The short straddle strategy implies the investor at least sees shares trading within a certain range through expiration. In this case, the trader keeps some of the premium received and staves off losses unless shares in FLEX swing above the upper breakeven price of $9.30, or slip beneath the lower breakeven point at $6.70. The short stance in both call and put options expose the trader to potentially devastating losses in the event that shares work against him in the next few months. However, the investor need not hold the position to expiration. The trader may be able to buy back the straddle at an advantageous price at some point, benefiting from the erosion of time value as well as subsiding levels of implied volatility.…
continue reading


Tags: , , ,



Forward Thursday – Nothing Could be Drier than a Jolly Caucus Race!

Forward, backward, inward, outward

Come and join the chase
Nothing could be drier 
Than a jolly caucus race

Backward, forward, outward, inward
Bottom to the top
Never a beginning,
There can never be a stop

To skipping, hopping, tripping fancy free and gay
Started it tomorrow
But will finish yesterday

‘Round and ’round and ’round we go
Until forevermore
For once we were behind
But now we find we are be-

Foreward, backward, inward, outward

Wheeee – this is FUN!  

Up we go again, getting close to 100 points pre-market – once again punishing anyone who was foolish enough not to buy the F’ing dip.  How dare you short this market!!!  Like the Wall Street Pelican in the cartoon says: "You HAVE to run with the others if you want to get dry."  Of course it’s impossible for the participants (the bottom 90%) to get dry as they are not on the rock with a warm fire and simply keep getting wet over and over again but the Wall Street Pelican keeps playing his tune, giving himself a ready supply of dancing fish to snap up whenever he gets hungry.  

Of course, for those who miss the subtlety of the Caucus race, Disney also puts in the story of the Walrus and the carpenter.  "The time has come" the Walrus said, "to speak of many things.  Of ships and shoes and ceiling wax and cabbages and kings."  

The carpenter reminds me of the Tea Party, enabling their fat-cat (or fat-walrus) allies, only to get screwed over in the end.  Walt Disney, don’t forget, had gone bankrupt early in his career and had also got screwed by big business when Universal Studios took control of "Oswald the Lucky Rabbit" – the original Bugs Bunny from Disney.  "Alice Comedies" were and earlier work of Disney’s that culminated in the eventual release of Alice In Wonderland, with much of his early sarcasm and frustrations with the system still intact. 

Yesterday, the part of the Walrus was played by Doctor Ben Bernanke, who’s Beige Book (see my commentary to Members) refers to "non-wage input costs" which have "increased for manufacturers and retailers in most Districts."  Callooh!  Callay!  The Fed may as well be saying as they come up with brand-new words in order to
continue reading





 

Phil's Favorites

Jobless Claims Improve, Leading Indicators Decline: Economic Report Card

Courtesy of John Nyaradi.

Jobless claims improve while leading indicators decline in today’s economic report card

by Wall Street Sector Selector Staff

Weekly jobless claims declined to 424,000 from last week’s 432, 000 but stubbornly stayed above the all important 400,000 level for another week.

August Leading Indicators came in at +0.3% compared to 0.5% for July, as the economy continues registering weakness.

Good news came from July Home Prices which rose to +0.8% from the previously reported +0.7%.

But the biggest economic news of the week came yesterday when the Federal Reserve said it saw  “significant downside risks to the economic outlook, including strains in global financial markets.”

Global stock markets responded negatively yesterday an...



more from Ilene
 
 

Insider Scoop

Priceline.com Trades Higher on Q1 Earnings Results (PCLN)

Courtesy of Benzinga

Shares of Priceline.com Incorporated (NASDAQ: PCLN) are trading higher in the after-hours following the release of its Q1 earnings results. Currently, shares are up 2.74%, trading at $548.60; they closed the regular session down 0.67 %, at $533.97.

The company said that its Q1 EPS came in at $2.66 on revenues of $809.3 million; this compares to the Street's estimate of $2.46 per share on revenues of $779.5 million. Revenues rose 38.6% year over year.

"In the 1st quarter, the Group benefited from strong growth in our global hotel business, particularly at Booking.com and Agoda," said Jeffery H. Boyd, Priceline President and Chief Executive Officer.

He added, "Room nights booked grew by 55.8% and our international gross bookings grew by 79% compared to prior year...



http://www.insidercow.com/ more from Insider

Zero Hedge

Fukushima Explosion Update: Core Presumed Intact As Sea Water Used To Bring Temperature Down, Radiation Level At 1015 Microsieverts/Hour

Courtesy of Tyler Durden

The damage control to the Fukushima explosion reported earlier is coming fast and furious. According to CNN, "the explosion at an earthquake-damaged nuclear plant was not caused by damage to the nuclear reactor but by a pumping system that failed as crews tried to bring the reactor's temperature down, Chief Cabinet Secretary Yukio Edano said Saturday. The next step for workers at the Fukushima Daiichi plant will be to flood the reactor containment structure with sea water to bring the reactor's temperature down to safe levels, he said. The effort is expected to take two days." While the government is trying to play down the threat from the explosion, it has nonetheless double the evacuation zone radius from 10 to 20 kilometers: "Radiation levels have fallen since the explosion and there is no immediate danger, Edano said. But authorities were nevertheless expanding the evacuation ...



more from Tyler

Chart School

The Mega-Bear Quartet and L-Shaped "Recoveries"

Courtesy of Doug Short

Note from dshort: I retired this chart series last summer in deference to my prefered inflation-adjusted series that aligns the S&P 500 2000 high with the Nikkei peak in 1989. However, I continue to receive requests for this version, despite the "V" shape of the the recovery since the March 2009 low. This chart series overlays the current S&P 500 with the L-shaped "recoveries" after the Dow Crash of 1929, the Nikkei 225 after Japan's 1989 bubble, and the post Tech Bubble NASDAQ. Click the chart below for a larger version and use the links to see various comparisons.


Click for a larger image

I've ...



more from Chart School

Sabrient

Sabrient Risers - 3/12/2011

Top 5 RisersStockRatingAnalysisVLOSTRONGBUYAn increasingly positive growth rate of past earnings, along with improving expectations for long term growth, make Valero a good prospect for high returns.KROSTRONGBUYKronos Worldwide has been gaining recognition from analysts as a good canditate for achieving higher than expected earnings along with higher overall projected valuation.SFIBUYiStar is one of the top candidates projected to achieve both higher than previously projected earnings in the short run and a higher earnings growth rate in the long run.AMATSTRONGBUYApplied Materials has been...

more from Sabrient

Option Review

Bulls Scoop Up Sprint Nextel Corp. Calls

 Today’s tickers: S, FTR, JTX & SBUX

...



more from Caitlin

OpTrader

Swing trading portfolio - week of March 7th, 2011

This post is for live trades and daily comments. Please click on "comments" below to follow our live discussion. All of our current virtual trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading portfolio (strategy, performance, FAQ, etc.), please click here

Optrader 

Swing trading portfolio

 

One trade portfolio

...

more from OpTrader
 
 

Stock World Weekly

Stock World Weekly

Here's the newest Stock World Weekly:  Illusion Based on a Fantasy 

Comments welcome... share your thoughts. 

Download Newsletter 3/6/11


Stock World Weekly archives here >

...

more from SWW

Pharmboy

Biotech Junkies Update and Momenta Pharma Moving Forward

February is now past, and the Biotech Porfolio is loaded with winners and a miss (PLX).  MRK is down a bit, but I expect that trade to recover, and one could be more agressive and double down on it, or play another round at the Jan13 $30 options for roughly the same price.  Below is the summary, and note the grey boxes are ones that did not fill.  I am still a fan of BMRN, and like DEPO as well.  Now let's look at a few others.

Table 1.  PSW Biotech Plays Since January 2011

 

Our newest play is Momenta Pharmaceuticals (MNTA), who is pursuing a three-part business model which includes complex generic equivalents in partnership with the Sandoz division of Novartis, proprietary compounds, and follow-on- biologics (FOB).  It seems that this company is tied up in competition/litigation wit...



more from Pharmboy



FeedTheBull - Top Stock market and Finance Sites




As Seen On:




About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>

About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the Favorites backup site (blogroll, archives, more). Contact Ilene to learn about our affiliate and content sharing programs.

Favorites Site >>