I for one and praying for a huge drop at the open.
I have been 50% PUTs in my IRA since the last rate cut, figuring it would be sell the news. On any gap down, I am unloading almost all my puts.
The Naz has given up about 17% since the sell the rate cut news event, in about a week.
Even stalwart EMC plunging from 83 to 56. Last bottom was at 50 or so.
Holding PUTs on EMC from 78 and 72.
CLS from 72
CIEN from 98 and 92
RIMM from 73 and 65
and have been in and out of EMLX, VRSN, WEBM, and NEWP.
Missed the best two plays, JNPR and BRCD damn it!
It seems time for a relief rally to me.
I am tempted to buy some calls here as shown below.
As a hedge I will hold IBM NETE (just purchased at the open on FRI), and ANF (recent purchase at 31).
Here goes, copied from Greg M's board where I originally made the post.
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Play of the Day, especially on a gap down.
BRCD Feb 75 calls as it gets added to the Naz 100 index
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Based upon Max Pain analysis
iqauto.com
Any of the following are very reasonable plays for the upcoming week. I will likely do a basket of calls in the following.
BRCD - Max Pain is 85 but extremely close between 80 & 85
UZBBO = Feb 75 calls for 3
UBZBW = Feb 77 1/2 calls for 2
GUFBP = Feb 80 calls for 1 1/2
GUFCT = Mar 100 calls for 1 3/4
BRCM - Max Pain 105 but extremely close between 100 & 105
RDZCT = MAR 100 calls for 3 3/8
JNPR - Max pain 110-115 very close
JUXBR = Feb 90 calls for 3 5/8
AVNX - Max pain is 60
GUHCL = Mar 60 calls for 1 9/16
PWER - Max pain = 40
OGUCH = Mar 40's at 1 1/4
Based on Max pain I will maintain my put positions as a hedge:
IBM max pain = 110
ANF max pain = 22 1/2
NETE max pain is irrelevant, practically no open interest and the chart seems to suck 100%, with a downtrend recently started
I anticipate that I will soon close all other short positions.
Notes:
The above quotes are the ask prices at the end of day Friday
If we open down, these prices may be available at the open on Monday. If we open up, they most assuredly will not.
Do not chase too far but you may want to bid slightly higher for a better chance at a fill. Use reasonable discression.
Do not go nuts with these plays.
I selected March options where I could get them reasonably priced, otherwise Febs. Big differences on JNPR, much less so on some of the others. As a cushion I would prefer March options further out rather than Feb options nearer the strike.
Extreme open interest at BRCD Feb 85. Best guess if you force me out on a limb is BRCD closes between 80 and 85. This makes the 77 1/2 for 2 points a very good choice if forced to pick a single strike. A close at 80 would net a gain of 25%, a close at 81 would net a gain of 75%. I happen to like the odds rather than buying more strike 80's for the same amt of money.
BRCD activity on Friday was above normal I think. Perhaps there are a lot of people making the same plays, bid ask spreads became large during the day. This may NOT be a good sign but it is quite impossible to tell.
I am in a basket of 75's 77 1/2's and 80's already. If we gap down extreme I will add 75's or 70's.
TAKE PROFITS WHEN OFFERED. If BRCD shoots up above 80 during the day on Monday, take some profits off the table, it could possibly be your only chance.
M |
