Naming my price in Priceline

I have been planning an earnings trade in $PCLN and that day has come. I had worked up several different trade ideas but elected to execute the following plan:

  • Short March 1 weekly 670 Straddle as the 1st step
  • Long March monthly 670 Straddle (do this in stages)

This takes a different approach in that I am first selling weekly premium (elevated due to earnings catalyst) and then working through the rest of the day to buy the March monthly strikes as price moves in one direction and then back the other way. This takes advantage of the expected whipsaw/ebb & flow as we run into the earnings release.

When I initially reviewed the Option chain after the open today, the price difference was near $8 so I wanted to lessen that cost (I wanted to Name my Price). Buy taking this staged approach (which requires more work) I was able to ultimately reduce my cost outlay to a debit of $2.70 (sold the March monthly 670 Put first, then did the 670 Call as the last piece – when price went from Green to RED).

I am looking to further reduce this by selling some wayyyyy OTM premium in March (just considering this for now). A run into earnings makes this idea to sell Call premium way above, like at the 800 strike for example.

A trade adjustment in Eastman Chemical

I like the Specialty Chemical industry. I have a position in $EMN (Eastman Chemical, global chemical company which manufactures and sells a broad portfolio of chemicals, plastics, and fibers) for a client and did an adjustment yesterday to make the trade free overall. Here is the original trade:

  • Long the March 75 Call
  • Short the February 75 Call
  • This trade is called a Call Calendar. It was done for a net cost of $.56

The February 75 Call did expire last week thus allowing me to keep all the premium collected. This left my net cost at $.56 and so I wanted to reduce this now that we are into March expiration time-frame.

After some review of the chart, on a few different time-frames, I decided that it would likely rest or have a mild pullback. With that in mind, I made the following adjustment:

  • StO March 72.5 Call on a 2:5 ratio for $2.15
  • StO Mar 77.5 Call on a 3:5 ratio for $.25
  • So for each 5 contracts sold this brings in $505

Let me break this down:

For every 5 contracts of the long March 75 Call, I sold 2 March 72.5 Calls and 3 March 77.5 Calls. This trade has a credit so if I receive nothing for the March 75 Calls at expiration, the credit is my profit on the trade.

The stock has indeed pulled back today and this is the current pricing on the short option pieces:

  • March 72.5 Call is $.95/1.05 bid/ask
  • March 77.5 Call is $.05/.15 bid/ask

RSI Buy Signal – the Simple Approach

One of the future growth stories is 3-D printing. One of the key players to emerge in that industry is $SSYS (Stratasys). Although this stock is quite volatile, I noticed today that RSI was probing the O/B level at 30 on the Daily chart:

SSYS_RSI_buyAs you can see above, the last time it was near the O/B area was in late September 2012. Time for the next wave up?

Will.I.am % R for a Buy signal starring General Motors

 

Scream & Shout

Now on to some boring TA work on $GM (lol). I have been doing some scanning today and thought I would break out the Williams % R scans that I have configured:

Show stocks where Williams %R (14) crossed below -90.00 within the last 1 day
and Average Volume(90) is above 500000
and close is between 10 and 250

One that jumped out at me was $GM. Here is a Daily chart showing 4 Buy signals:

GM_williamsR

Just a Simple Approach here. Any dip under -75 and you enter a new Long. Use your normal Stop process (or protect with Options if you have that as part of your arsenal).

Position Updates – 02/18/2013

Most of my efforts this week in my personal accounts was with the management of expiring Options for February. I did add one new position – in $AIG – for the long-term account. The only position that required buying back short Call premium was $T – all other Option pieces expired allowing me to keep the premium collected.

Here is the Summary:

Positions_02172013I will be doing some work for March expiration this week as I need to put on new Collars. As always, the info on the Fab 5 positions are noted each week and you can find the latest update here.

The ETF Pair Short strategy. Here is the current price performance in 2013:

 

The Tree of Life

The concept of a tree of life has been used in science, religion, philosophy, and mythology. A tree of life is a common motif in various world theologies, mythologies, and philosophies. It alludes to the interconnection of all life on our planet and serves as a metaphor for common descent in the evolutionary sense. The term tree of life may also be used as a synonym for sacred tree.[1]

The tree of knowledge, connecting to heaven and the underworld, and the tree of life, connecting all forms of creation, are both forms of the world tree or cosmic tree, according to the Encyclopædia Britannica,[2] and are portrayed in various religions and philosophies as the same tree.[3] Рcourtesy of wikipedia

Life Technologies Corporation (NASDAQ: $LIFE) is a global biotechnology company dedicated to improving the human condition. Our systems, consumables and services enable researchers to accelerate scientific and medical advancements that make life even better. Life Technologies customers do their work across the biological spectrum, working to advance the fields of discovery and translational research, molecular medicine, stem cell-based therapies, food safety and animal health, and 21st century forensics. The company manufactures both molecular diagnostic and research use only products. Life Technologies’ industry-leading brands are found in nearly every life sciences lab in the world and include innovative instrument systems under the Applied Biosystems and Ion Torrent names, as well as, the broadest range of reagents with its Invitrogen, GIBCO, Ambion, Molecular Probes products. Life Technologies had sales of $3.7 billion in 2011, employs approximately 10,400 people, has a presence in approximately 160 countries, and possesses one of the largest intellectual property estates in the life sciences industry, with approximately 4,000 patents and exclusive licenses. For more information on how we are making a difference, please visit our website: www.lifetechnologies.com

Now for some TA chart review to see what the market thinks about this company. Here is a Daily chart:

LIFE_Gap_Fill

Now for a unique look using a Renko chart:

LIFE_RenkoNow we will move out to a Monthly view using candlesticks to see how it matches up to the Renko view:

LIFE_monthlyOne final look using PnF (Point n’ Figure) charting:

LIFE_PnF

 

The Fab 5 update – 02/15/2013

I came into this week with 2 empty seats to fill and did manage to fill one of the seats with a new position in $UTX (March 92.5 Calls). However, I still have 2 empty seats to fill as I closed the $MHK position (was February 95 Calls, decided not to move the trade to March but rather take the $). The $100 Roll was complete and this was quite a 4-week run already. Rung the register.

The $ARG & $KSU positions put in a very solid week and both look great for a stab at the $100 Roll soon.

Here is the Summary:

02152013Here are some candidates going in to next week:

Performance information for the Fab 5 since inception (October 2011):

  • 26 positions with a Complete status
  • Average gain of $11.02
  • 36 positions with a Not Complete status
  • Average gain of $2.63