My Options Account on August 8, 2013

Today was a really good day for me.  My account was up $1,017 today.  My big winner was HLF, my largest position.  Herbalife was up 1.48 to 66.65 today and as long as the stock stays above 66 tomorrow I'll be a big winner.  I added one more 66/64 put credit spread sold for .55 today and I bought back my 4 62.5/60 put spreads and my 4 62/5/61 put spreads for .07 and .05 respectively banking those gains.  I moved the funds into an earnings play on PCLN.  My HLF options were up $651 today.

Priceline is one of my favorite stocks to watch and it has been up a lot over the past 3 months, 6 months and 1 year.  The PEG ratio is a respectable 1.28 so the stock is still valued appropriately based on the expected growth.  With that said I was expecting the stock not to move up as much as it did so I sold 3 680/685 call spreads for 1.22 each.  The stock was currently trading at 933 so the stock would need to go up more than 47 points on Friday for me to lose money.  Priceline reported very stellar earning and the stock rose and has settled after hours at 981.60.  To say I'm nervous about my position is an understatement.  A lot of things can happen tomorrow so I'll be watching closely.  I also added 1 995/1000 call credit spread for .65 and 4 855/850 put credit spreads for .35.  I'm kicking myself for this move now because PCLN has been so successful and must have outstanding management.  I just didn't think they could do so well with the business they are in.  Guidance wasn't raised for the next quarter so this could help the stock stay where its at or move a little lower tomorrow.  We'll see.

I'll be watching all my other options as well tomorrow.  Here is a summary of where I'm at:

AAPL $460.86; 3 460/455 put credit spreads; 3 470/475 call credit spreads.  I have a tight range here but I feel pretty good about these positions unless the market heads lower.

GOOG $892.66; 1 885/880 put credit spread; 1 905/910 call credit spread.  I feel good about these positions and hopefully we don't see a big move on Friday.

NFLX $250.40; 2 245/240 put credit spreads; 2 255/260 call credit spreads.  I don't feel compfortable wih this position even though the stock price is in the perfect place for my condor.  I've seen too many 10+ moves but I had to hold on due to the size of the premiums.  The stock was only up 1.19 today so hopefully we see another day like that tomorrow.

I bought back my TSLA 130 put and sold the 128 put so I banked a $80 gain today.

Check back tomorrow and I should have a morning update or possible trades.  PCLN should be a good stock to trade tomorrow. 

Jonny

My Options Account on August 7, 2013

Today was a pretty good day.  I didn't make many trades today and just let my positions ride.  NFLX was my big winner as the stock was down 6.69 to 249.21 and its sitting right between my strike prices.  MA was my big loser as it was down 7.68 to 646.32 which is below my 650 put that I sold.  I am still confident in the upside of MA so I won't buy back just yet.  HLF was down just slightly and I think the stock will head higher if we can have a positive day in the market.  For earnings I sold one TSLA 130/128 put spread for .82.  The stock was up big after hours so looks like I'll bank that $82.  Overall I lost $18 in my account today and I'll be looking for a big positive day on Thursday.

Jonny

My Options Account on August 6, 2013

The overall market was down 0.74% on the Nasdaq and 0.60% on the Dow.  My account lost $347.  AAPL was down 4.25 to $465 and I need Apple to stay between 460 and 480.  I like Apple's upside so I feel pretty comfortable with my position.  If the overall market is down a lot this week then I am at risk on my 460 puts.  I have a small position in GOOG and the stock was down 8.43 today to 896.50.  I'm in a good position as I need Google to stay between 885 and 920 by Friday. 

My largest position is in Herbalife and I added to this position today when the stock was down.  HLF finished down 1.11 to 65.56.  I added some 66/64 put credit spreads with an average price of .925 and some 66/65 put credit spreads with an average price of .50.  If HLF can go and stay above $66 by Friday I'll be banking a very large percentage gains on all my positions.  The stock moved in relation to the overall market today and I expect HLF to have a very large move up at some point in the near future.  It may not happen this week or next week but it will happen based on my opinion.  I lost $189 on my HLF positions today.

Another stock that I am very bullish on is Mastercard.  MA was up 11.55 to 654 today.  I am bullish but I wasn't expected such a large move in this stock so quickly over the past week.  I sold the 660/665 call spreads so I want MA to stay below 660.  Based on the current action I don't like my chances.  I re-positioned my put spreads and sold 3 the 650/645 for 1.35.  I  have a very tight range so I'll be looking for the stock to stay relatively flat tomorrow and will look to exit with some small gains either tomorrow or Thursday.  Its more of a guessing game at this point and I don't like to be in those positions. 

My last option position is in NFLX and the stock was up again today by 2.06 to win 255.90.  I'm not ITM in my 255/260 call credit spread but didn't exit because I re-positioned my put spreads to 245/240.  I'm going to watch to see how this stock moves on Wednesday.  I feel NFLX is way overvalued and I'll looking for a pull back this week.

Jonny

My Options Account on August 5, 2013

I had a very good day in the market today.  As I discussed previously, my main focus this week is on HLF (Herbalife).  I strongly believe this stock will go higher or at least not go down.  There's a lot of news out on this stock so I believe we see more investors/traders go long which could catapult this stock much higher.  Going into the day I had 4 contracts of the 62.50/60 put credit spreads.  I added 4 contacts of the 62.50/61 put credit for .41 (32.7%) after the stock was up about .60 on the day.  I also added 1 more contract of the 62.50/60 put credit spread for .68.  I also bought 1 65/67.5 call debit spread for .85 to take advantage of more upside this week.   The stock rose throughout the day and in the afternoon I added 2 66/64 put credit spreads for .85 (69.5%) and 2 66/64 put credit spreads for .95 (85%).  At the end of the day my positions in HLF were up $366 after the stock finished up 2.75 on the day.  If that isn't an indication of where the stock will be going I don't know what is.  The overall market was down and this stock was up over 4%.

I also entered some of my standard credit spreads and here is a summary of my positions:

AAPL $469.55 3 460/455 put credit spreads at .78; 3 480/485 call credit spreads at .51
GOOG $905 1 885/880 put credit spread at .55; 1 920/925 call credit spread at .65
MA $642.45 3 630/625 put credit spreads at .84; 3 660/665 call credit spreads at .55
NFLX $254.03 2 235/230 put credit spreads at .60; 2 255/260 call credit spreads at .63

My account was up $443 today which is much better than most Monday's.  NFLX is my only concern at this point.  The stock just shot higher at about 1pm Central and went from $246.80 to $254 in two hours.  I'm checking into why as this stock is way overpriced.

Jonny

My Options Account on August 3, 2013, HLF Analysis

I know its Saturday but I often times do my research for the coming week on the weekend.  I always like to have a plan before Monday comes.  One stock that I've learned a little about is Herbalife (HLF).  I made some money on this stock last week due to the earnings play.  I noticed a huge amount of shorts in the stock (30 million and 43% of float).  I learned that a hedge fund manager named Bill Ackman shorted an extreme amount of this stock believing that their business model is illegal.  I've had some experience is multi-level marketing companies and know the model is not illegal.

The numbers look very good for HLF.  Herbalife just reported earnings that beat expectations and guidance was raised as well.  Investors love growth and this company is growing.  They've grown 27% over the past five years and are expected to grow at a 15% rate over the next five years.  The trailing PE is only 14.99 and the forward PE is 11.38.  The PEG ratio, which is the PE ratio divided by the five-year growth rate is only .88.  I got this number off of yahoo finance.  It appears it takes the average PE of the trailing and the forward.  The lower the PEG the cheaper the stock.  Anything under 1.00 is considered to be a very good value. 

Bill Ackman is going to do his best to try and bring the stock price down but due to this large short interest there is extreme risk of the stock moving up very fast and very high.  I can't predict the future but I'm going to be watching this stock closely and will try to profit off of it.  For next week I already have 4 62.5/60 put credit spreads that I sold at .76 on Friday.  That is a 41% gain of the stock can stay above 62.50 by Friday.  The stock is currently trading at 64.09 so there is some risk but after seeing their earnings report last week and with all the shorts I think its a very good risk to take.

To give a little information on how the amount of shorts can benefit the longs I want to give my take.  I've seen this many times before on stocks that seem way overvalued and have a lot of short interest.  Any sudden move up will create a "short squeeze".  During a short squeeze people who are short are forced to cover or buy back their shares by their broker.  These forced purchases of the stock create a fast move higher in the stock.  HLF is very similar but they are not overvalued and have more shorts than I have ever seen in a stock.  This is a receipt for a very fast move higher at some point in the future.  Now let me be clear about this, Bill Ackman holds a lot of these short shares and he won't be forced to cover.  But I'm sure there are plenty of smaller traders who followed Bill's lead who won't have a choice if this stock starts moving up.  I don't buy into Bill's theory that HLF's business model is illegal so I'm going to stay long on this stock and I'm expecting it to be very profitable for me over the next few months.

I'm going to be posting some more analysis later so please check me out again soon.

Jonny

My Options Account on August 2, 2013

Today was up and down for me.  I made $304 in my account today and only a $4 gain on the week.  My MA plays worked out perfectly as the stock stayed just above 645.  However, my PCLN plays took a large loss today as the stock continued going up.  I also lost a little on GOOG and AAPL.  I made money in AMZN, LNKD and AIG.  I'm a little disappointed in how this week ended but it could have been much worse.  I'll have some very good plays for next week.  Have a nice weekend.

Jonny

My Options Account on August 1, 2013

Today was a very volatile day on the upside for my stocks.  MA was up 35, PCLN up 29, GOOG up 16.  My main concern will be on all three of these stocks going into tomorrow.  I did some trading on MA today and purchased a 640/645 call spread.  The stock is currently at 646 and if it stays above 645 tomorrow I'll make a profit of $310.  I purchased the spread for $190.  I also bought back my put credit spread and sold 1 635/630 put credit spread for 1.01 and one 645/640 put credit spread for 2.20.  It will be important that MA doesn't move down tomorrow.  I also sold 2 655/660 call credit spreads so I don't want to see the stock move up too far.  I think we have a pretty flat day in the market and my stocks all around.

PCLN blasted right through my call strike of 895 and the stock is currently at 904.  I am expecting a pull back tomorrow but getting the stock to drop $9 will be hard unless the overall market is down big.

GOOG also went through my call strike at 900 and the stock is sitting at 904.  I just need Google to go down a little tomorrow.

I have a tight range in AAPL 450-460 and the stock is at 456.83 so just need Apple to stay where its at or go down slightly.

I adjusted my NFLX call spread yesterday to 250/255 and the stock is at 249.20 so I need this stock to stay the same or go down tomorrow.

For AMZN, I adjusted my call spreads to the 305/310 and the stock went up throughout the day and is sitting at 305.50.  I'll need Amazon to take a breather and go down a little tomorrow.  

For earnings plays I checked out LNKD and decided to buy a strangle spread.  The stock closed at 212 and I bought the 200/195 put spread for 1.55 and the 220/225 call spread for 1.75.  They reported very good earnings (.38 vs. .31 est) and the stock is now up to 229 in after hours trading.  As long as they close over 225 or under 195 I'll make a profit of $170 or 50% in one day. 

I also put in a small play in AIG.  I sold 2 46/45 Put credit spreads for .25.  The stock reported good earnings and I should have no trouble pocketing the $50 gain tomorrow.  That's a cool 28% gain after commissions in one day.  And this one seemed easy.  Wish I had more capital to invest.  It was a last minute decision with my remaining buying power.

So to summarize, I need the market and most of my stocks to go down tomorrow with the exception of MA and LNKD.  Hopefully tomorrow will be a good day.  I've had my fair share of bad expiration Fridays so I'm due for a good one.  We'll see how it goes.  My account lost $657 today, which isn't all that bad considering the volatility.

Jonny

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