Thursday, December 11, 2008
Santa Claus Trading Update
After a bad week or so my accounts finally had a decent day with SKF and SRS both rallying almost 20 points apiece.
Since my last trading update - Got Squeezed....
On Monday I bought more SKF at 106.16.
I also wrote more calls against my Dell position, selling the January 12.5s for .90.
And on Wednesday, after the close, I added to SRS at 76.90.
Today, I took a loss on my December 25 puts in Wells Fargo. I had bought them 6 days ago for 1.25....today I dumped them at .77 figuring I had plenty of short bank exposure through SKF.
I am strongly thinking about taking some of my SKF and SRS off the table right now after the close....
But am leaning toward letting it ride. Hopefully this pig won't get slaughtered!
Posted by CaptiousNut at 4:15 PM
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dell: I was never a big fan of the covered call. I see it as implicitly admitting that the stock won't rise during said holding period.
SKF: I, personally, would be hesitant to hold this much longer. It looks to me like rising prices on falling volume. I know you don't care for *techincal* analysis but it looks like a double top as well. For these two reasons, I would conder selling soon and then re-entering at a later point.
SRS: same sentiment.
SKF: Let it ride through the Bernie Madoff reaction.
SRS: Let it ride through the weekend as there are pervasive rumors GGP will file BK friday night due to the $900 million note they can't roll.
Yes, writing a call is such an admission, partially.
But the extenuating circumstance here is the *fatness* of options today.
As for SKF and SRS...
Yeah, they scare me. Fed will cut rates next Friday. This month is setting up for a massive short squeeze, seemingly.
I let a little SKF out pre-market at 141.74 and a little SRS at 107.87.
They closed at 123.88 and 77.25.
I hope you're right.
With these ETFs I would gladly take a quick 50 points over a slow 125. Know what I mean?
Yep. Those levered ETF's can blow up in your face so you gotta take what you can, when you can.
The Madoff reaction was good for a couple hours.
GGP got a big boost when it was reported that they refi'd 900 billion - what they neglected to say until later was that it was 09 notes and NOT the 900b that is coming due TODAY which they will default on. Nice pump fake.
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