Trading Diary Aug 20th

Hereisaquickrecapofallofthetradesthatwe?

initiated,closedorexpiredintheweekthatwasAug20thtoAugust24th?

MondayAug20th:

TRADE:BBY($18。

70)BoughtSept/Dec22CallCalendarfor。

62

Dan?

Afterpreviewingtheirquarterlyreport,wecametotheconclusionthatBBYforthetimebeingwillnottradeasanearningsstory,butratheraspecialsituationasinvestorsweighthepotentialforthefounderandlargestshareholderofthe?

beleaguered?

electronicsretailertopulloffhisproposedbidtotakethecompanyprivate?

SeptvolseemedunusuallyrichtolongerdatedoptionsandwefeltthatsellingtheimpliedmoveinSepttotheupside,butusingtheproceedstobuylongerdatedcallsinDecmadesenseasitwilltakesometimetogetmoreclarityonthepotentialbid?

Withthestockdownabout7。

5%sinceputtingthetradeonMonday,thecalendarisactuallyunchanged,IwilllooktocovertheSept22PutswhentheyareofferedatafewcentsandlooktospreadtheDec22Calls?

ReadPost?

here?

andupdatehere。

TuesdayAug21st:

TRADE:DELL(12。

40)BoughttheSept/Oct11PutCalendarfor。

09

Dan?

AfterpreviewingDELLsquarterlyreport,itbecamefairly?

apparent?

tomethatevenwithexpectationslow,the?

likelihood?

ofanupsidesurprisegiventhePCsupplychaindatapointsofthelast2monthswasntgreat?

CalendarswereveryattractiveduetothevoldifferentialbtwnSeptandOctoptions,andfranklytheyweredollarcheap?

WithDELLclosingdownabout10%ontheweek,thePutCalendarendedupbeingupmorethan2xwhatIpaid?

IwillnowlooktocoverSept11putsandpossiblysellsomeOct10PutsagainstheOct11putsthatIownandfurtherdefinemyrisk。

Read?

here。

WednesdayAug22nd:

TRADE:MSFT($30。

57)BoughtOct30/28PutSpreadfor。

48

Dan?

Onthehealsof?

disappointing?

quarterlyreportsandforwardguidancefromHPQandDELL,itisbecomingincreasingly?

apparent?

thatPCsalesareinalessthanstellarspotandsalesaresoftinfrontofMSFTslateOctupgradeofWindowsandtheeverincreasingcannibalizationofPCsalesbytablets?

Additionally?

thepriceactionofMSFTonaweekthatsawnewhighsintheSPXwaslessthanstellarasthestocksitsabout7。

5%fromthe52weekhighsinMarch?

IchoseOCTasitwillincludetheirnextquarterlyearningsreportandwillalsoincludereviewsofWindows8,whichfromwhatIcangathermaybeabitdisappointing。

Read?

here。

ThursdayAug23rd:

TRADE:SBUX($48。

04)BoughtSept47Putfor。

90

Dan?

SBUXchecksalotofboxesasitrealtestonameswewanttobeshortheadingintothelast4monthsofthe?

year。

WearefirmlyinthecampthatEuropeisattheprecipiceofarecession,thatChinasslowdownislikelytobemorepronouncedthanmostbullsthinkandthatthe?

likelihood?

thattheU。

S。

isabletode-couplefromthisweaknessisntgreat?

SBUXexpectstogetmuchofitsnearterm?

growth?

fromEuropeandChina,whiletryingtoenterintonewproductcategoriesintheU。

S。

ifMCDandCMGsrecentresultsareanyindicationofthehealthoffastfoodsalesintheaforementionedregions,SBUXwithitspremiumvaluationcouldface?

significant?

pressureifthecompanyisnotabletostemrecentsalessoftness?

Alsoitisattractivetousfromatechnicalperspectivetoshortstocksthatwere?

considered?

marketleadersinthelatestbullrun,buthaverecentlybrokendownonfundamentalnews?

IchosetobuySeptbecausethisisreallyamarketcallandIamlookingforabroadmarketselloffintheweekstocomeandanamelikeSBUXshouldtradeinlocksteptothedownsidewiththeSPX,orworse?

AlsochosetoBuyoutrightputsastheimpliedvolwasrelativelycheapandIwilllooktosellalowerstrikeputagainsttheSept47soncethestockstartstoheadlower。

Read?

here。

TRADE:CRM($146。

50)BoughtOct130/110putspreadfor$3。

60

Enis?

Thepost-earningsreleasepriceactiononThursdayeveningwaswhatIwouldhaveexpectedafteraslightearningsbeat,butrevisedguidancelowerforQ3?

Therevenuebeatsandbetterguidancesoundnice,butasIsaidinmypost,CRMsissueisthatitsearningsgrowthhasbeenstagnantfor2yearsnow,evenwhilerevenueshavegrown?

WhileIamalreadyskepticaloftheargumentmadeinfavorofAMZNslong-terminvestmentinthenameoffutureearnings,IcanatleastseesomerationaleforthebuildingforthefuturecaseinAMZNslowcurrentearnings?

However,CRMsspendingincreasesasrevenuegrowsaremuchmoreshort-terminnature?

Withsucharichvaluation,noearningsgrowthwouldnormallybeseverelypenalized?

Alas,CRMsbouncerightaftertheopenonFridayshowsthatthecurrentinvestorbasedisagreeswithme?

Inanycase,IstillviewCRMasparticularlyripeforaselloffifthebroadermarketsentimentjustshiftsbacktoneutral?

Butonanyselloff,ImlikelygoingtotakeanyprofitsontheOctputspreadmorequicklythanifthestockhadnotheldupsowellafteratepidreport?

Readhere。

FridayAug24th:

TRADE:XLK($30。

55)BoughtSept30/29PutSpreadfor。

20

Dan?

Thistradeisjustasimpledefinedriskshorttermbetthatthebiggestofbigcaptechtakesalittlebreatherasweheadintowhatcouldbeaninterestingpre-announcementseasonasweheadintothefinalmonthofQ3?

Butmostimportantlythistradewas?

conceived?

toplayforaneartermpullbackinAAPLasthestockhasthepotentialtoselloffonanydisappointmentaboutexpectedproduct?

announcements?

intheweekstocome?

AAPLmakesup20。

6%oftheXLK,andthetop5weightednamesmakeupnearly50%oftheentireetf?

Paying。

20topossiblymake。

80iftheetfisdown5%inthenext4weeksseemslikeaveryreasonablyrisk/rewardespeciallyasAAPLsrecent15%runismaskingbroaderweaknessinthetechspace?

Read?