Wednesday Trades

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Wednesday Trades

Tuesday Trades

ROVI Earnings Play

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Current Trades:

Current Payout:
Strategy:
February premium ATM calls are trading at over 80% volatility so 1 FEB 65 CALL and 1 FEB 70 CALL were shorted into earnings to collect premium against the long MAR 65 CALL bought on 1/28/11. In the event that ROVI misses earnings and the stock drops below 65 until Friday expiration then premium of 2.15 is collected lowering the risk of the MAR 65 CALL from 4.80 to 2.65 (2.40 * 2 = 4.80; 4.80 – [1.40 + 0.75]).

The MAR 75 CALL was bought today for two reasons:

  1. Unlimited upside potential in the event of higher than expected reported earnings
  2. Gives me more flexibility in the future if I want to put ROVI gains into a neutral spread (if the price of the 75 CALL drops then I can add one for cheaper to lower the basis and leg into the spread when price recovers; if price goes up then the deltas in the 70 strike will increase faster than the 75s so I can short 4 70s to offset the 75 CALL to spread the position; or at that point I could sell 1 65, and 2 70s for a spread)

Goal:
Lock in profit with potential for further gains.

Deltas for 70 and 75 MAR CALLS are .33 and .16 respectively when ROVI trades at 65.40. If a butterfly spread is legged on at 66.50 the premium will be approximately 2.00 and 0.90 respectively for the 70 and 75 CALLS. The benefits of this are as follows:

  • It would free up capital of $710 for other trades
  • The butterfly is on for a credit so the maximum risk of loss is a gain of $165 (if the stock closes at 65 > close > 75)
  • The maximum profit potential is $1,165 (if the stock closes at 70)

Anticipated Payout:

Wednesday Trades

 

Tuesday Trades

 

Monday Trades

IN
AIG – AUG 48 CALLS @ 2.59
BAC – AUG 16 CALLS @ 0.87
CME (hedge) – MAR 280 PUTS @ 3.40
DG – MAY 30 CALLS @ 0.90
EXPE (added) – APR 28 CALLS @ 0.45
FFIV (hedge) – APR 105 PUTS @ 2.25
MCD (added) – MAR 75 CALLS @ 0.67

OUT (-1.545)
AMZN (covered short) – APR 210 CALLS @ 0.73 (+0.10)
CME (part) – MAR 320 CALLS @ 3.30 (-2.833)
PG (part) – APR 62.5 CALLS @ 2.73 (+1.02)
PG (part) – APR 67.5 CALLS @ 0.428 (+0.258)
ROVI (part) – MAR 65 CALLS @ 3.36 (+0.91)
VIX (part) – MAR 20 CALLS @ 1.30 (-1.00)

SCALP (-0.091)
FFIV (in) – MAR 145 CALLS @ 1.521
FFIV (in short) – MAR 150 CALLS @ 1.05
FFIV (out part) – MAR 145 CALLS @ 1.25 (-0.271)
ROVI (in) – MAR 70 CALLS @ 1.52
ROVI (out part) – MAR 70 CALLS @ 1.70 (+0.18)

Weekly Results – 2/4/11

Friday Trades

IN
AMZN – APR 210 CALLS @ 1.05
DAL – MAR 11 PUTS @ 0.41
EXPE – APR 28 CALLS @ 0.40
GLD – MAR 135 CALLS @ 1.81
IEF – SEP 88 PUTS @ 1.75
PGshort APR 65 CALLS @ 0.85
PGbutterfly JUL 60/65/70 CALLS @ 1.81
SPY – FEB 129 PUTS @ 0.86

OUT (+0.892)
AMZN – MAR 145 PUTS @ 0.44 (-0.21)
FCX (covered short) – MAY 50 PUTS @ 2.30 (+0.33)
FRXvertical MAR 33/34 CALLS @ 0.45 (+0.25)
ICE – MAR 120 CALLS @ 3.90 (-0.385)
PG (part) – APR 62.5 CALLS @ 2.13 (+0.467)
ROVI (part) – MAR 65 CALLS @ 2.95 (+0.48)
SDS – MAR 23 CALLS @ 0.55 (-0.04)

Thursday Trades

IN
AMZN – APR 205 CALLS @ 1.05
AMZN – MAR 145 PUTS @ 0.65
CBOE – SEP 28 CALLS @ 0.80
PG – APR 62.5 CALLS @ 1.85
CBOEbutterfly MAR 22/24/26 @ 0.71
EXPE – APR 28 CALLS @ 0.50
FCXshort MAY 50 PUT @ 2.63
UUPshort SEP 24 CALLS @ 0.28

OUT (+2.667)
DBO – MAR 30 CALLS @ 0.60 (-0.15)
MCD (part) – MAR 75 CALLS @ 0.90 (+0.15)
ROVI (part) – MAR 65 CALLS @ 2.65 (+0.167)
ICE (covered short) – MAR 125 CALLS @ 2.15 (+0.28)
ICEvertical MAR 120/125 CALLS @ 1.82 (-0.086)

HEDGE
SDS – MAR 23 CALLS @ 0.59

OTHER
Reduced size of CME vertical and converted part to 300/310/320 butterfly then took part profit on 330 short leg of 320/330 vertical

CME (OUT part) – vertical MAR 320/330 CALLS @ 1.62 (-0.045)
1) CME (IN) – vertical MAR 300/310 CALLS @ 4.05
2) CME (IN) – short MAR 310 CALLS @ 6.20
3) CME (OUT covered part short) – MAR 330 CALLS @ 2.05 (+2.35)

orignal position: 320 + (320/330 vertical) = 2*+320 & -330
1: 300/310 vertical = +300 & -310
2: -310
3: +330

Two positions: 320/330 ratio vertical (net long) & 300/310/320 butterfly