1/16 wrap

AAPL +20 burritos are selling but with thinner margins CMG -16 JPM solid report & GS with a great report market unch after falling in the morning but rebounding throughout the day.  NASDAQ led the way while the DOW fell small.  Continues to be a market of individual names with that being said one strategy I have been considering is SPY short over night cover in the morning and get long but maybe it is too late.

A few updates and then on to tomorrow...

Well AAPL rebounded and unfortunately I did not add the call spread prior, but I still believe 500 end of week is in the cards.  So while I was hedged well for today's move the trade from now becomes a lot more risky, but still remains the possibility for a nice trade with two days to go.

PCLN we took advantage of early strength and wrote a 675-685 call spread today for 1.30 lowering my cost basis on the trade to about 1.90.  Currently getting 5-1 and now have options depending on tomorrow action, but as of now the trade is looking fine.

 With the weakness in CBS this morning it did not make sense to sell the front month calls in front of the Feb, but I took advantage of the early weakness and entered the Feb 40 calls at .60 as mentioned on Twitter.

With the spin off announcement after hours CBS is currently trading around $41, this should be a lot of cookies!!!

XLV from last week I took off half for a double and will let the rest run until it does not make sense to do so, but took the risk off and now have a guaranteed gain.  This is important when trading with a highly volatile instrument such as options take the risk off when you can and trail some to do your heavy lifting.

EBAY earnings play I decided to just take a net bearish position with a 50-48 1 by 2 put spread @.12, I got a bad fill by entering early in the day and trying to front run it a bit, but if it sold of into the close I would have been able to exit some and have a less risk trade.  EBAY is up after an earnings beat and depending on the call this one looks to be a loser.  My risk is $600 in the trade with upside to $10,000 so good risk to reward ratio.


There was also a fairly large trade in AAPL today with 2,000 march 530/610 call spreads being bought, I entered into this today as well.  I like this trade although picking a bottom on a gap up is not the best thing in the world, but this trade gives earnings and recovery time if they do miss.  Also serves as a partial hedge to my weekly position going on although that is not my reasoning for this trade.  There is also a lot of ways to trade around this position to generate dollars and lower the cost basis... more on that in another blog.

On to tomorrow...

CAVM not really a name associated with options activity but today traders were active in Feb 31's in the money for 3500 & Jan 32 for 1600.  A nice break out today through the 10 & 20 MACD crossing bullish RSI broke the line and looks ready for higher prices and Accum/Dist curling up so one to keep an eye on through the 50-day.

CCL opened higher today and was rejected hard near resistance and the April 36.50 puts saw some action today with about 3500 trading and seeing similar action in 39.50 calls possibly being sold to create a bear risk reversal.  April is too far out for me but could be a decent equity trade if it starts to break moving averages.

If finding bottoms is your thing this is a name to keep on the radar as call buyers were active today with over 7,000 Feb 11's going off  & Mar 11's have 4300 in OI while March 12's have over 15K in OI.  So one worth watching in the coming days/weeks.

INTC nice day today and is starting to look great, earnings are tomorrow but this could be tradeable for a run into earnings.  Also 15.6K Oct 25 calls traded in one block today.  So a large position and one I may look to buy into tomorrow although it is far out, but could be a way to play a good earnings report and maybe take a double and leave some running.

MRK HESS MDT all saw noteable buying or selling puts in the case of MRK but not really too much else of interest in today's trade in the options world.

Last one NUAN got rejected hard today and fell, but sitting on its 10 day and one I am interested in through today's highs.


Cutting it short with things to do... Good Luck!!!