Trading Diary: June 1st – 5th

by Dan June 7, 2015 11:02 pm • Commentary

Here is a quick recap of trades that we initiated, closed, or debated in the week that was June 1st to June 5th:  

Monday June 1st:

New Trade – $LNKD Awaiting Your Response

Trade: LNKD ($200.60) Buy July 200/220/240 call fly for 4.75

The stocks recent base around $200 looked poised for a bounce to fill in a bit of the earnings gap. This trade structured offered an attractive risk/reward for a stock alternative.

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New Trade – $LVS: Sandstorm

TRADE – Buy the LVS ($50) July 1st weekly/ August regular 47.50 put calendar for $1

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Tuesday June 2nd:

Name That Trade – WW JD?

Looking at ways to play for a breakout of recent consolidation, possibly to new highs given the investor excitement surrounding Chinese Internet stocks and what appears to be a mania in Chinese stock markets.

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Name That Trade – $AMBA: From Zero to Hero

We took a look at the set up into the company’s Q1 results and concluded:

A beat and raise is likely to cause shorts (short interest about 25%) to trip over-themselves to cover above the prior highs ($96), while a miss and guide down sends the stock easily down 10%.  That being said, I suspect the stock is between the implied range ($84 to $98) on tomorrow’s open.

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Wednesday June 3rd:

Name That Trade – PG: Cincinnati Red

With the stock approaching 52 week lows we thought it made sense to look at the set up.

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New Trade – Low Prices in $WMT

Trade: WMT ($74.90) Buy June 73 / 75 / 77 Call Fly for .75

Its our sense that the stock should find some support in the mid to low $70s and short dated options presented the opportunity to define a range where the stock should trade in the coming weeks.

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Thursday June 4th:

Trade Update – TLT: Closing June Call Fly for a Loss

Action: Sell to Close TLT ($119.20) June 120/125/130 Call Fly at .85 for a .40 loss

We thought it made sense to cut our losses in front of the May Jobs report as the reaction could be binary for our trade that was out of the money.

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Trade Update – GOOGL: Closing June Call Fly for a Gain

Action: Sell to Close GOOGL ($552) June 540/565/590 call butterfly at $9.50 for a 3.50 profit

We had two different GOOGL trades on and decided the close the one with more near term delta risk:

with the stock up just 1.5% the call butterfly is worth a little more than 50% more than what we paid.  Given the fact that we added a call calendar days later (read here), we are going to take the profit on the shorter dated trade and leave the call calendar for Q2 earnings in July.

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Name That Trade – CSCO Systems Go

One large holder doesn’t see a ton of upside above $30 over the next couple months.

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Friday June 5th:

Name That Trade $AAPL: Adding Yield To Your Precious

Against 100 shares of AAPL at $129, Sell 1 of the July 125/135 strangle at 3.50

Long holders should consider adding potential yield over the next month or so.

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Name That Trade – BABA Black Sheep

Stock Alternative: BABA ($91.30) Buy The July 90/100 call spread for $3

Considering long stock alternatives to play for a move back to January’s breakdown level.

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