The
takeover rumor rally in APC Anadarko Petroleum causes me some pain. I
was short strangles and the stock is near the short June 110 calls. I
sold some July puts to hedge my position. Other highlights including
covering short puts in BEAV BE Aerospace, hedging in DAL Delta
Airlines. I rebalance in IWM the Russell 2000 etf and the move lower
gets me to net neutral.
The sentiment at AAII is getting to be a
concern. Others cite a record high bullish reading among advisers at
Investors Intelligence. Transports are moving lower. Interest rates
have ticked up. So there are reason for concern. It isn't time to
prepare for the big one, but a minor squall has been in the forecast
for over a year now. Here is this week's recap:
Thu
Sell DAL Jul 45 calls @38.4. Delta Airlines knifing lower. I
hedge my short Jul 35 puts by selling some calls.
Wed
Sell APC Jul 100 puts @108.0. Anadarko Petroleum up on takeover
rumors. My short position in APC Jun 110 calls is deep in the red. I
sell yet another layers of puts to reduce my negative delta, but my
net position is short. It is a difficult situation. I weigh other
choices such as buying back the calls and taking the loss, buying
shares of stock to hedge the short call, or selling other puts at
different strikes and expiration, before deciding.
Tue
Sell GLD Jul 115 puts .25 @121.4. Gold showing signs of life with a
small up day. I rebalance my short strangles back to net long. I am
betting on a continuation of a narrow trading range between 115 and
128. In the big picture this is a narrow window, but in the short
term gold is not moving.
Buy
to cover BEAV Jun 90 puts .35 @93.9. BE Aerospace says it is
splitting into two companies. I took my position on news that they
were seeking strategic alternatives. The outcome was not a buy-out,
so the stock drops. I get out with a small profit.
Sell
SLB Jul 97.5 puts .30 @106.5. I open a July position in Schlumberger.
Sell
IWM Jun 112 puts .22 @116.5. I rebalance my complicated position on
the Russell 2000 etf. I am still net short. It doesn't want to go
down.
Sell
WFC Jul 49 puts .17 @52.5. I open a July position in Wells Fargo.
Position
Summary:
long
AMGN ASH BEAV CNX DDS DIS EPI EWG
long
HON JWN SLB UNH VRX WAG
net
long APC DAL
net
neutral AAPL GLD IWM SPY
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