(4 votes, average: 4 out of 5)
Loading ...While technically it’s past midnight here on the West Coast and thus I can officially begin my birthday celebrations (which had already started in Vegas) this here is a look back to Tuesday’s options action.
Much ado was made about end-of-quarter last minute fuckery, but compared to previous WTF patterns, the close was rather tame…
The put/call ratio was quite active on the other hand and nearly spiked back the other way from the previous day’s spike down. Looks like the big move down in the morning had investors running to the safety of protective puts:
As planned yesterday, I bought some SPY Jul’09 94. puts at the open…the first ‘real’ trade based off the index put/call ratio. It is currently showing ~15% profit and thus has become the proud owner of a trailing stop, set at just above breakeven. Futures are semi-bullish right now, so the only concern here is the possibility of a major gap up, which could potentially push the put price under the limit set along with the trailing stop and leave the sell order unfilled…
Quick Look at Some Individual Items:
- Latest biotech lottery number: SPPI. FDA decision coming up on the 2nd. The stock has been on an insane run and may be a good candidate for a straddle/strangle. Might want to go with Aug’09 options though, which are only a tiny bit more expensive than the Jul’09 ones (due to vast difference in volatility) but will be less adversely affected by the upcoming volatility crush…
- Data also expected ’soon’ in RIGL…volatility there is a bit more even amongst the months however…
- Lots of action seen in WYE, with all Oct’09 ATM calls very active on the day…bull call spreads galore!
- Couple of the highest volume equity options on the day were EXC calls, thanks to what seems to be a giant calendar spread with Jul/Aug’09 55. calls. 50k each; going long the Aug’09 while selling the Jul’09 to reduce risk and cost.
And that’s about it for today…DPeezy Birthday Special picks for tomorrow (assuming the semi-bullish futures hold up):Â RIMM (above $72.50) | CHK (above $20.25).
