I started off with another UTHR opening gift. I have also shuffled a few more positions around. A number of my trades are looking very good right now and I feel pleased with what I have. Perhaps that is a warning sign, as nearly all expansion is followed by contraction. At this moment I am sitting on 66% cash, with the majority of my margin on my GS and MER Backratio Call Spreads.
Trades out of the gate:
UTHR - Bought 2 units of 65p calendar for .10, sold 2 units for .40. Bought 4 units of 70p calendar for .10, exited 3 units for .40, and still holding the rest. So far this has been a wonderful gift. It looks like I don't have to get a job for the off season. I get to build my businesses PrePaid Legal and MySnowPro.
ACN - Oct/Nov 40p calendar. Sold 1 unit for .47.
JBL- Nov/Dec 22.5p for .25. Bought 1 unit. I would not add anymore to this as there is not enough premium in the front month to make it worth doing more.
MU - Exchanged (bought) 3 units Jan08 11c for 1.25, after which I legged out of (sold) my 2 units Jan08 10c for 1.95. Although, I am putting more Extrinsic value in play, the 11c actually has a 1.5% lower Imp. volatility. This sets me up for a better play when I roll it into a straddle. This is being traded on heavy volume! One of the fundamental reasons I entered this trade is that MU has a few components in the new iPods. Also, big funds don't like to hold stocks in the single digits, and MU has solid institutional $$ behind it. Technically I was playing a double bottom, so I figured with both of those reasons behind it was bound to bounce. I see resistance around 11.65-12. I will put my straddle in play in that area.
I am going to try to play it like JADE from a few months back.
UNM - Dec/Jan 25p - I sold my final spread unit of this trade for .17. It was basically just left over, and wanted to regain some mental capital. This was a nice trade 2.5x profit.
Following up on the BackRatio Call Spreads - aka Vacation trade
MER - The structure of this trade is Sell 1 -Jan 75call and buy 2 - Jan 85call. It is down another $1.50. And my spread initially purchased for an average credit of 2.22, currently it is $1.60 @ 70.10. I accidentally sold 1 unit for $1.70. With the information coming out that Merrill Lynch may get hammered with big write downs, the stock has dropped 10% in the past 6 sessions. If it drops below 69.85, look out below. The next support is around $67, and this should offer excellent resistance @ $72 to keep the stock down.
If the stock stays below $75 @ expiration, I keep the entire credit, as everything expires worthless.
GS - The structure of this trade Sell 2- Jan08 200call Buy 3 - Jan08 220 call. I purchased this with the underlying @ 210. Now the underlying is @ 216 and I am down a little on the trade. The reason? Volatility continues to drop. With a rise in the stock and a bump up in Volatility I like this play, as it gives me until Dec with GS.
One of our days from last March
Here is my latest read. It is a good read.
