Oct 12th – Resilient

A bounce back, with bulls not giving in to yesterday’s afternoon selloff.

re·sil·ient /rɪˈzɪlyÉ™nt, -ˈzɪliÉ™nt/ Pronunciation Key – Show Spelled Pronunciation[ri-zil-yuhnt, -zil-ee-uhnt] Pronunciation Key
1. springing back; rebounding.
2. returning to the original form or position after being bent, compressed, or stretched.
3. recovering readily from illness, depression, adversity, or the like; buoyant.
[Origin: 1635–45; < L resilient- (s. of resiliéns), prp. of resilīre to spring back, equiv. to re- re- + -sil-, comb. form of salīre to leap, jump + -ent- -ent); see salient]
The market sprung back from a pretty wicked late day selloff yesterday. BIDU took a beating, up 8 today. STV – China Digital TV Was creamed yesterday. Today up 20! off of yesterday's lows. Sheesh. I would have bought that on the open if I could have got it in the 20's or even low 30's. Speculation is alive and well.
Blake Shelton – not me, but we have all seen it.

I have been selective in my moves today. The bear inside me had me step in front of the IWM @ the 61.8% retracement from yesterday’s move.
UTHR – picked up another unit of this trade (70p calendar) for .10, then immediately sold it for nice morning profit. However, someone else who bought 30 contracts ahead of me. I hope it was someone reading this. And if so they can spend it on their lessons in Breckenridge this season. Right now the spread is mid-marking underwater, but that is pretty common when the spread, as the feb 70p option is so incredibly wide.
IWM – 85/81p for 1.41 @ 83.97. Would two days of an afternoon selloff be too much to ask?
ACN – done, exited… finished. I am out on the final unit @ .55. This has been a good trade, but with the underlying breaking out above 42, my Oct/Nov 40p calendar needed to be exited. The Oct was not providing adequate protection for my Nov. Purchased for .25-.30, exited between .50-.65. I also repurchased @ .40 and .45. And traded in and out of this spread over the past few weeks.
MEDX – Exited 1 unit of Jan/Feb 15p for .15. This trade is getting long in the tooth. Patience. I still have 3 units of this trade on.
PPCO – Exited 3 units of this for .16. Nice .20 per spread (after commission) profit on this trade.
USB – Bought 1 unit 32.5c for .04 and .03. I wasn’t able to put more on. bummer. I am pretty loaded on this trade, but with earnings coming out next week it should open up this spread. 8 units in total (about 160 contracts). Earnings on Oct 16th! Because this is a Call Calendar I must keep an eye on the Dividend Risk. The last Ex-dividend was Sept 26, 2007, the next is in December. So I should be safe here. The Dividend is .40 per quarter, so it could hurt if I was hit with that. Right now there is 1.20 in extrinsic value. I am looking to keep the extrinsic above dividend. That should keep me safe.
NFLX- Bought 3 units so far. 1/2 units @ .35 and .33, then 3 units @ .30. the Nov Imp Volatility is 63%, and the Dec is 53%. Earnings are Monday, Oct 22nd, aftermarket. I like having two weekends of Theta Decay between now and then. It will be interesting to see what happens to volatility prior to earnings. 3.5:1 reward to risk, pre-volatility crush
NFLX Chart with Expiration @ Nov 16
The LOGI (Nov/Dec 30p) trade is looking good. Up 1/4 of its 4:1 reward to risk ratio. A weekend will do it some good. (slightly ITM)
NVLS (Nov/Dec 27.5p) is doing well too. it hasn’t moved much in the past 3 days, but again, the weekend should work wonders. (slightly OTM)

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