Calls and Puts for Income Message Board

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Strategies & Market Trends : Calls and Puts for Income

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To: Jim P. who wrote (5198)	6/23/2012 7:52:57 AM
From: Robohogs	2 Recommendations Read Replies (1) of 5891

Given this mkt, I am contemplating BUYING near strike puts in some namesvand double selling the next strike out if credit available. Also BUYING LEAP calls and spreading with higher IV ST calls and maybe puts too. ALSO using long calendars to express opinions - i.e., stock has an event a la JCP or IDCC, would buy September calls and puts and short same strike July and then Aug - either same strike or higher/lower depending on vols. My acct getting too whipsawed and have been solving weekly margin issues. Much of risk matured during June cycle but I again got carried away this past week after solving calls equal to half of my acct value (was out of call by 9:35 on Monday as 2-3 positions triggered the call - one for half the amount involving covering an AAPL SHORT which had worked ok and the other covering a huge illiquid short for very high volumes). Both were profitable, although threat of buy-in on the illiquid short had me cover 25% above current prices at modest profits (arrggh) as I did not want the buy-in to come during a spike or cause a spike (margin was solved but stock unborrowable). Needless to say, if I coulda held short through Monday close I would have hit new highs for year but likely not to get there for few months now given risk reductions unless my weekly trading goes as well as this past week and my core holds up. New short calls on the name only covered up losses on short puts during the week. Great week trading events. In and out of JCP short strangles and straddles (made $ but took off short calls on Wed when stock moved with power only to put back on on Thur as stock weakened - left a few thou which was more than profit made). Great idea but terrible trading execution which is my norm. Great profits with IDCC short strangles but some losses at end of week on old core short put position. Followed Deal into ETFC but cut bait at breakeven as mkt hinted at melting Thur. Probably would have come back on Fri but I had too much longside exposure across all names. I followed CC into WLT (coal has been a sector where I minted money in Q1 for high 5 figures only to give it all/mostly back in Q2 despite double short monthly calls against longer dated short puts). Took modest gain Wed. and small smally loss on rest Thur. Will look to re-enter this week. Contemplating massive downside hedges for portfolio on Monday. Was in small overall call situation at end of week given over-selling calls on STX into whoosh and expiring JCP and IDCC positions but will be more than good Monday despite 3-4 core positions moving to the strikes and doubling or tripling margin requirements or more so my risk management is working. I want to reduce exposures further to make way for the hedge and to trade special sits on weekly basis without triggering calls. If I gave up all hope on CIE ($7 per margin per put) or CETV ($1 per put), I would be golden but still debating). Interesting names entering the week are MMR - massive Friday spike, GDP - look at Thur and Fri gyrations. I am short bunches of longer dated way OTM puts in MMR (added midweek) and short small amount of 12.5 July and Dec puts in GDP with short 12.5 and 15 July calls for half or so. The 12.5 call was deeply in money when sold and I almost covered it with stock near 15 early in week only to see stock hit 12 or so early Fri then 13 or so then 12 or so and back. Stock may be bottoming given ST volatility. I will take a big margin hit on Monday when MNTA crashes to 120% of my short put strikes (100% margin at Etrade) but may be interesting to write Jan 2013/14 7.5 puts as Company has more than that in cash but with a cash burn again. They just lost generic challenge to launch Copaxone on after market on Friday and have lawsuit against second generic on Lovenox still pending. They are also waiting on Copaxone approval but less important given 3 year block losing the patent case. Unclear what happens with Lovenox win too as their deal with Novartis switched to awful terms when second generic launched. Second generic maker theoretically could be on hook for old economics but unclear if court would hold them liable for costs due to MNTA's bad contract with Novartis/Sandoz. I wll ride with short calls on PCX and ATPG for at leadt this week. Both look done. I do have short puts on ATPG to think about as well as data due in Shimson gas well for ATPG due in early July. They are toast though in my view. If only I could have held my short there. Jon

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