Tuesday, November 23, 2010

Positions - Alcoa (AA) Jan 11 Options

The Nov $14 calls expired completing the November Options trade. In total this trade yielded over 1% from options play in about 6 weeks.

On Nov. 23 after news of Korean hostilities lowered AA's price down to $13, sold the January 11 $12.50 puts for .$51 cents. Price of the stock was just below $13 and implied vol was about 35

Worse case - if the stock falls more will be acquired about a cost $12 which is below book value and at the target acquisition price.

Best Case - Stock stays flat or rebounds staying (above $12.3 200 dma)and the option expires at a profit of approx 4% over 2 months or a 24% annualized return.

Probably case - Stock returns to low $13 and vol drops allowing an opportunity to take profits on a shorter term basis.

Tuesday, November 16, 2010

Intel Options - Dec 10 - 2

Intel below $21 on big down day in the market.

Add 1/5 position of $20 puts for Dec 18 for $.24 with volatility elevated.

Worse case the stock continues to fall and final lot will be acquired at net cost below $19.8 (below $20 acquisition target). Also is stock falls the covered call recently acquired will expire providing more down side risk.

Best Case - Intc bounces back from global market pressures more quickly and this option can return 1+% over 5 weeks or nearly 10% annualized.

Friday, November 12, 2010

Trade - Initiate NYX position

Bought two lots of NYXE on down market day with an average cost of $29.03.

Fundamentally - book value of $26.36 provides a good floor, forward pe of 10 seems attractive, nearly 4% div. Trading volume assumed to increase as traders/investors adjust end of year positions.

Technically - Support at 200dma 0f $28.8, chart level support around $28, and BV of $26.36. Also near bottom of KC.

Best Case: $34
Most Likely Case: return to over $30

Friday, November 5, 2010

Intel Options - Dec 10 - 1

Intel over $21!!!

Sold 1/5 position 12/18 $22 calls for $.29

If stock called away at $22 that is 10% gain on $20 cost basis stock plus over 1% cov call profit.

More likely - stock will retest 200dma around $20.70. If this occurs should be able to take profits on this position (maybe 1%) and consider selling puts at that time.

Wednesday, November 3, 2010

Unitin (UTR) - complete purchase

UTR earnings came out near expectations with few surprises. In addition the election and QE2 announcements are now behind us.

Purchased the second half of the position at $23.97.

Next steps
- X - Dividend date next week for .9% !!!
- Exit - Below $22 - 8% loss and support on chart
- Target Price $30. Mostly on expanding multiple

- Alert at $26 for 10% and hit 200dma or at year end for review.