The LEAPS Trader
105 W. Monument Street
Baltimore, MD 21201
Friday, July 27, 2007
Email – #385
** Loving LEAPS
The market is tanking – will it go lower? Maybe, but there is a distinct tone to this market that tells me that we may have a rebound in the near future.
There has been terrible news about sub-prime and private equity in the past two days. But long rates are heading lower, and that may be catalyst for an upward move once the sellers are finished selling. And there are pockets of strength – in the very same sectors that are being trashed. Homebuilders are not collapsing as one would expect with all the bad news – not that I would be a buyer… I still regret liquidating our Toll Brothers puts a tad early!
Techs, as measured by the options premiums, are also holding stronger than one would expect. Our Cirrus Logic (Nasdaq: CRUS) position is barely down, even though the company reported a weak quarter (the forward looking statements were quite good, however). Our generic drugs play, Mylan Labs (NYSE: MYL) is seeing additional insider buying today.
Our China play is gaining steam – don’t be fooled – the China story has not peaked just yet. But I would rather have a position betting against that market, regardless of the short-term indigestion we occasionally endure.
Our LEAPS strategy has served us very well this year, giving us a lot of healthy profits so far. I don’t expect it to change in the months ahead as we are primed to profit in a lot of sectors. And with LEAPS, our outlay is small and our upside could be staggering.
Karim
Current Portfolio:
Company / Symbol: Mylan Labs (NYSE: MYL)
Option / Symbol: Jan. 10 $20 call (WYQ AD)
Date Purchased: 6/18/07
Current Price: $2.75
Comment: Hold.
Company / Symbol: FTSE/Xinhuau China 25 Index (NYSE: FXI)
Option / Symbol: Jan. 09 $80 put (VHF MP)
Date Purchased: 6/11/07
Current Price: $3.38
Comment: Hold.
Company / Symbol: Cirrus Logic (Nasdaq: CRUS)
Option / Symbol: Jan. 09 $10 call (VUR AB)
Date Purchased: 6/1/07
Current Price: $0.95
Comment: Hold.
Company / Symbol: Coeur D’Alene (NYSE: CDE)
Option / Symbol: Jan. 09 $2.50 call (ZYB AZ)
Date Purchased: 4/17/07
Current Price: $1.95
Comment: Hold.
Company / Symbol: S&P 500 MITT (AMEX: MCP)
Date Purchased: 7/18/03
Current Price: $13.34
Comment: Hold.
Company / Symbol: Advance Micro Devices (NYSE: AMD)
Option / Symbol: Jan. 09 $35 call (VVV AG)
Date Purchased: 6/21/06
Current Price: $0.20
Comment: Hold.
Bull & Bear Spreads
Company / Symbol: GoldCorp (NYSE: GG)
Option / Symbol: Jan. 09 $30 call (OPJ AF)
Date Purchased: 6/9/06
Current Price: $3.70
Comment: Hold.
Company / Symbol: GoldCorp (NYSE: GG)
Option / Symbol: Jan. 09 $40 call (OPJ AH)
Date Purchased: 6/9/06
Current Price: $1.55
Comment: Hold. Sold call against January 09 $30 position.
Company / Symbol: Microsoft (Nasdaq: MSFT)
Option / Symbol: Jan. 09 $32.50 call (VMF AZ)
Date Purchased: 5/25/07
Current Price: $2.60
Comment: Hold.
Company / Symbol: Microsoft (Nasdaq: MSFT)
Option / Symbol: Jan. 09 $40 call (VMF AH)
Date Purchased: 5/25/07
Current Price: $0.67
Comment: Hold. Sold call against January 09 $32.50 position.
Company / Symbol: Chesapeake Energy (NYSE: CHK)
Option / Symbol: Jan. 09 $35 call (VEC AG)
Date Purchased: 5/25/07
Current Price: $5.45
Comment: Hold.
Company / Symbol: Chesapeake (NYSE: CHK)
Option / Symbol: Jan. 09 $45 call (VEC AI)
Date Purchased: 5/25/07
Current Price: $2.00
Comment: Hold. Sold call against January 09 $35 position.
