OptionPundit

Category: Intraday Trading

  • Google Stock Pin : +86.4%

    After 6 months of paper trading and 2 months of real trading including one month with OPN subscribers (as speculative trade), I think I am beginning to understand Google’s (GOOG) behavior. This was my second consecutive profitable pinning action with Google. Well, this month it didn’t quite pinned at $430 but I was rewarded for a thoughtful plan. Just look at the intra-day chart of Google, compare with broader market and you will notice how Google behaved. I had shared my zoning thoughts with OPN subscribers last month (to view this you need to be a OPN subscriber). Last month it resulted in +58% gains in one day when we used a different strategy to play stock pin.

    google-stock-pin-mar-2008.png I opened a 430/420 Bull put spread for $4.40 credit, but I was little too early as Google dropped. I again open another round of $430/$420 Bull put spread but this time for $7.50 credit. Google behaved precisely what I had originally forecasted but then I started to book my profits. First half was covered for $2.75 and next for $2.15 per spread resulting in average 86.4% gains in one day. Well, in retrospect I would have been able to keep all the credit ($11.10 for $8.10 investment on average) as it would have expired worthless but I don’t like to give my profits back.

    When Google started to advance towards $440, a strike that was also suggested as a pin point based on “Max Pain Theory” (I didn’t agree with it and hence opened 430/420 earlier) I opened $440/$430 bull put but then quickly bot it back for almost break-even even though it would have given great results had I booked profits earlier. But hey, no coulda woulda shoulda.

    To add, GS was pinned near $180, OIH near $165, ISRG $300, MA $220, RIMM $105, Apple was not really pinned near to any strikes.

    As I expected earlier, it was not an easy week. Happy Ester and a fulfilling, well-deserved long weekend.

    Profitable Trading, OP

  • Yummy Burritos (CMG + 53%, +155%)

    I like 3rd Friday of every month i.e. Equity Options Expiration Friday and if this happens to be an earning announcement day, even better.

    cmg-intraday-ta.png Chipotle Mexican Grill (CMG) announced great results, a 61.8% rise in fourth quarter earnings, revenues for the quarter grew 31.5% from last year, yet missed “growth” estimates and was punished. It may turn around, but at least today wasn’t the day of yummy burritos for CMG shareholders.

    cmg-intraday-feb-15-08.png I decided to play straight puts on this for a very short duration, in a cheap way. Feb expiration is today, so hardly there is any time premium left in the options. Chose to play with 95 and 100puts for $0.45 and $2.33 respectively. Sold for $1.15 and 3.43 respectively, all within 30mins.

    BTW, Berkshire Hathaway has just disclosed positions as of Dec 31 and Krafts (KFT) was a surprise for some. Glaxo (GSK), Carmax (KMX) and Wells Fargo (WFC) are included in the portfolio. If you are looking for all the holdings, click here.

    Profitable trading, OP

    Till next option expiration friday, Profitable trading, OP

  • Thank you Goldman, Profit +100%

    (for details pls visit www.OptionPundit.net)

    Before Goldman’s conference call I posted that there could be a potential opportunity in GS when post-call move happens. I did listen to the webcast that was aired at 11am US EST. I was not really interested in how much did they make but what do they think of the future and how is the tone of the officers. Needless to say more, market is already reflecting its pov. There was lot of blah blah, but personally I wasn’t impressed with the quality of answers. But hey, they don’t run GS to please me, I am out with my gains.

    gs-intraday-trade-dec-18-2007.png    gs-transaction-12182007.png

    Here is a gain of +100% in few hrs time. I was out as soon as it hit the road for 100% gains, I bot 190 puts as well but as soon as it reversed the direction, I also hedged with 210 calls as well to keep it almost delta neutral. I will close before market closes else theta will take away my gains.

    And btw, if you haven’t heard, according to marketwatch, CNBC reported that GS had a horrible November. Additionally, the business channel reported that Goldman recently endured the worst two weeks in the company’s history.

    Have fun, profitable trading, OP

  • MON is Breaking Out

    (for details pls visit www.OptionPundit.net)

    mon-break-out-oct-26-2007.gif MON is breaking out! It is just about to penetrate 95 ceiling. I think the impact is due to improvement in it’s long term credit rating from A- to A and of course being in Bull Sector. Check out!

    Profitable trading, OP

  • A Productive Speculative Season

    (for details pls visit www.OptionPundit.net)

    This was probably one of the best options expiration times. No matter how hard I try not to trade speculatively on Option expiration Friday, I can’t avoid it. Trading with discipline has its own advantage and disadvantages, advantages being more though.

    HAR was the star of the day. The decline started from $97 when i got into it. I had to go out for a stroll so I closed my speculative position on it to realize later that had I been monitoring it, results would have been over +1600% in one day alone (well no coulda, woulda, shoulda). I got into again when it was trading at $90-89, to gain another +150%. Attached are the chart and my transaction details:

    har-speculation-chart.png     har-speculation-sept-21.png

    SNP, another beautiful trade, +16%, but I am still in as it is just breaking out.

    FDX, thanks for announcing bad results. I bot Puts when it opened higher, sold puts for profit and bot calls when it started to move up. I mostly don’t do intraday trades but this was too good to pass. One simple reason, 105 was a strong support and today is Options expiration, my theory told me it will dance around $105, so I have been milking it in and out.

     fdx-intraday-sept-20.png   fdx-intraday-trasaction-sept-20.png

    DFC, thanks to value investing, Dhandho investment, Mr Pabrai is one of the biggest holders. Supply is less and rate cut helped it bounce back nicely. This one I invested in stock as options were not attractive. Bot at 4.7 sold at 5.52 in one day i.e. + 17% on holdings.

    ZINC, GDX, ABX and many more. This has been one of the best speculative expiration week. Oh btw, income trade portfolio suffered a blow due to massive rally, but still yielding close to 6% for Sept expiration. This excludes all speculative gains.

    In last few minutes preparing for next week, all the ones that are dampened today due to pinning, expecting those to fly next week i.e. CAT, FCX, PCU, GOOG and others. Pls do your due dilligence before diving into any of those.

    Profitable trading, OP

  • CFC Closed for +15.7% profit

    (for details pls visit www.OptionPundit.net)

    I mentioned to watch out CFC for $19 area, and it did drop today. I opened a straight put and then closed it as it started to move back up. IV also played a key role as even though stock came back to the point where I bot my PUT, options were making money as IV has risen. Closed for 15.7% profit within few hrs time.

    cfc-trades.png

    I did open a BCS trade as well and I will manage it accordingly, if needed. There are some other interesting underlying that can offer good yield, for instance, XHB, FXI and IWM.  BAC trade is also already up >+10%

    Keep an eye for value, profitable trading, OP