LEAPS Trader Update Wednesday 6/7/06
Attacked From All Sides
Hell hath no fury like a market worried about a slowing economy and under attack by the Fed. Nothing is safe with commodities, blue chips and techs all getting hammered. Overseas markets are all down sharply again Wednesday night. The portfolio took a major hit as those stocks with the most profit and the most bullish trends being hammered for big losses.
Fortunately we have insurance puts on most of the positions and with one more day of declines most can be sold for enough to cover the cost of the LEAP and give us a free ride. I am going to list some exit targets on some of the put positions that could give us a decent reduction in cost. With the market so oversold I believe we will see a bounce soon and I would love to exit these puts before that happens.
SLB $60.55 July $60 Put SLB-SL @ $1.65 on 6/6 - Exit target SLB @ 57.50
ACI $42.92 July $45 Put ACI-SI @ $1.85 on 6/5 - Exit target ACI @ $40.00
FTI $62.92 June $60 Put FTI-RL @ $1.10 on 5/23 - Exit target FTI @ $55.00
BHP $40.39 June $40 Put BHP-RH @ $1.50 on 5/22 - Exit target BHP @ $37.50
MDR $42.66 June $40 Put MHH-RH @ $.83 on 5/22 - Exit target MDR @ $37.50
TRN $52.75 June $60 Put TRN-RL @ $1.00 on 5/22 - Exit NOW @ $7.10
PTR $102.00 June $105 Put PTR-RA @ $4.20 5/22 - Exited @ $103
GG $27.47 July $27.50 Put GG-SY @ 1.95 5/01 - Exit target GG @ $25.00
FTO $52.27 June $50 Put FTO-RJ @ $1.80 5/22 - Exit target FTO @ $45.00
CSX $63.13 June $65 Put CSX-RN @ $1.20 5/22 - Exit target CSX @ $61.00
BTU $55.29 June $52.50 Put BTU-RT @ 2.70 5/22 - Exit target BTU @ $50.00
CCJ $38.91 June $35 Put CCJ-RG @ $1.20 5/22 - No target, out of range
HAL $70.35 July $65 Put HAL-SM @ $2.00 5/22 - No target, out of range
VLO $58.82 June $55 Put VLO-RK @ $1.50 5/22 - Exit target $52.50
Changes in previous positions:
TIE - $36.10 Buy July $30 Put TIE-SF if TIE trades at $34.75
BHI - $81.00
Sell Jan $100 Call BHI-AT currently $3.20, stop loss @ BHI $85
Buy Jul $80 Put BHI-SP currently $3.60, stop loss @ BHI $85
Exit target on July $80 Put BHI @ $75.
If these targets are not hit please do not let the accumulated premium evaporate, especially on the June puts. Use your own judgment but capture what you can if the prices begin to rise again. I will update the strategy in the weekend newsletter.