Monthly Archives: March 2012

BBY 6 Month Chart

BBY Earnings Option Activity

There’s some interesting option activity today on $BBY with earnings before the open Thursday.

It looks like the May 23 Puts and the April 28 Calls are getting relatively devoured.

The May 23 Puts are getting sold for around $0.35 and the April 28 Calls are getting bought for around $0.75.

You can see from the 6 month chart why they’re playing the 23 Puts.

BBY 6 Month Chart

Looks like a bullish bet on the earnings, counting on an early pop. The vol will fade fast tommorrow and those 23 puts will probably expire worthless (unless it really tanks). The trader is trying to lower their 28 Call cost thinking they have little risk under 23 and a IV advantage before earnings.

Indicators

Pre-open Indicators

I like to look at the state of European markets pre-open. Here’s a chart with $AAPL thrown in for fun. No data on the $VIX until after the open.

Bear spreads 140/135 on the $SPY are on my mind.

Indicators

Good trading.

AAPL Holding Up the World

Is AAPL Holding Up The World?

I’m baffled at the near parabolic ascent of AAPL. We all know the history, the soap opera, the religion, the brilliant (though not diverse) products, the cash, the dividend, the buy back, etc. Ok it’s a great story, but recently I have the feeling they’re holding up the world.

These are some indicators I follow with todays data.  I added AAPL for a perspective.

AAPL Holding Up the World

I didn’t add the $VIX but it spiked up with the sentiment miss this morning. Will the VIX follow AAPL?

Good Trading.

palette table

Spring Projects – Pallets?

I’ve caught the pallet bug. I’m not sure if it’s a good bug or a bad bug, but the wealth of creative work done with old pallets is impressive.

People build houses, bridges, beds, bikes, and all sorts of crafty tidbits for the home with old pallets.

Old pallets were a nuisance for me in the past. I’d have large quantities of IT material arrive at my office, and the delivery guy would leave the pallet with all the material, normal.

The problem was that  garbage collectors in Paris won’t take pallets, and the people responsable for getting rid of our services’ old stuff weren’t happy! So… Pallets were to be avoided.

Then I started to stumble on complicated structures created out of ‘my garbage’. There’s something crafty about that…

In any case, this weekend I made a table, what I discovered is that it’s a refreshing spring project to break something, and then try to put it back together, in an even better form. It became a puzzle.

palette table

Good trading.

LULU 1M Chart

LULU Active Option Trading Pre-Earnings

$LULU is on my watch-list and they’re coming into earnings (Thursday) and looking at the active options today can give you a good idea for expectations. What strikes me as odd is that the active options today are on the May strikes, not the April strikes.

The most active strikes today are the May 75 calls and May 70 puts. The chart will give you an idea why:

LULU 1M Chart
 The 70/75 Straddle is the strategy of choice.

Are people buying this straddle or selling it? The reward profile looks more interesting to me on the sell side, but I honestly don’t know. If anyone has more info, I’d love to know.

Here’s the risk profile for the May expirations if you’re a seller.

LULU Risk Profile

The IV30 is at 43.63 and the HV30 is at 31.31. The break-even at expiration is between $62.50 and $82.50. This trade on the sell side looks very interesting to me, that’s a 20 point range. In other words you’d be betting that $LULU will stay over 62.50 and under 82.50 for the next 45 days. If you’re a buyer you’re betting it’ll break out of that range.

This is worth watching.

VIX 1 Year

VIX at Yearly Low

This continues to be a warning sign for me.

VIX 1 Year

Thinking puts on the SPY but more on that later, taking a break.

Good trading.

For the bull argument, this isn’t bad.