Friday, March 22, 2013

Buy NKE SPY APC (sell puts, strangles)

Buy NKE via selling Apr 55 puts @59.7
Nike higher on earnings. Chart pattern is a text book breakout from a cup-and-handle base formation. Support is at the base at 55. If it drifts down to the base, the plan is to roll out or perhaps even double the position.

Buy SPY via selling Apr 145 puts @155.3
I add to my tiny long position in the S&P 500 ETF. SPY has about an 8% chance of being below 145 at April expiration. Yes, there is the Monday Cyrus decision, but waiting until after that may mean smaller premiums. So I add a bit today, and may add more if it the market moves lower.

Buy APC via selling strangles: 
May 75 puts, May 100 calls @86.9
A short strangle is a bet on a trading range. These strikes add to my net long position. My interest in Anadarko Petroleum is mostly because it is the biggest component of the oil fracking etf. There is chart resistance right here at 87/88 and support at 77 and 75.

Why all this activity today? I am flush with cash from 14 positions expiring last week. With Monday and possible Cyprus news, even though there is a rally today, premiums may go down after the news comes out. There is always the risk of some explosive news, and I still have plenty of dry powder after opening four positions.

Net long APC KORS

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