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The current format of the Play Updates has changed. Only the pertinent data that has changed from the prior week will be shown in an effort to concentrate more on new commentary on new plays rather than restating existing positions. Each play has a link back to either its last full commentary or its initial description.

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THE $32.94 -1.21 - TODCO ** Stop Loss $30.00 **

Todco gave back exactly what it earned the prior week and most of that was on Friday.

Earnings were reported on Thursday at $1.11 compared to analyst estimates of $1.01. This was more than a 300% gain over the same quarter in 2005. Revenues rose 73% on stronger day rates and improved rig utilization.

The drop came from post earnings depression as those traders who weathered the China storm ahead of earnings raced for the exits with their profits.

To see the initial commentary on this position click here

Earnings: March 1st, $1.11 vs .34 cents in comparison quarter

Current recommendation: Hold

Breakdown target $39 hit 12/7/06

Position: 2009 $45 LEAP ZYU-AI @ $8.40

Insurance Put: None

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CHK $29.89 -.58 - Chesapeake Energy ** Stop loss $28.50 **

CHK declined slightly and given the market conditions I have no complaints. No news and no change in play.

To see the initial commentary on this position click here

Earnings: Feb-23rd, 90 cents vs est 76 cents.

Current recommendation: Hold

Position: 2009 $35 LEAP VEC-AG @ $5.30

Insurance put: none

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FXI $95.10 -10.30 - China 25 Index Fund ** New Stop $93 **

That was a very ugly week for the FXI with the majority of losses coming from the Tuesday crash in Shanghai. We entered this position at $94.50 back in November and that $10 drop erased our gains. That is the peril of investing and we should be glad we are still up +2.40 on the LEAP. With some analysts saying there is still another drop coming in the Chinese markets I am going to add a stop loss at $93 to avoid going negative on the LEAP.

The iShares FTSE/Xinhua China 25 Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the FTSE/Xinhua China 25 Index.

Component list

This iShare focuses on the largest companies in China (58% of it positions) and Hong Kong (42%). These are the most liquid companies in these markets. With Asia growing by leaps and bounds the FXI generated a +40% return in 2005 without using options. We hope to do better using LEAPs.

Current recommendation: Buy under $105

Breakout target: $94.50 hit 11/22/06 on gap open to $95.80

Position: 2009 $100 LEAP Call VHF-AT @ $13.50

No insurance

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MRO $89.24 -3.35 - Marathon Oil

Marathon dropped with the market despite very positive production news. MRO said production available for sale in 2007 would range between 390,000bpd and 425,000bpd compared to 365,000bpd in 2006. Based on their current projects they see available production rising t between 465K-520K bpd by 2010. No change in play.

To see the initial commentary on this position click here

Earnings: Feb-1st 3.06 vs 3.43 (Q4/05) $1.08 billion profit

Current recommendation: Buy at $85

Position 2009 $100 LEAP Call VXM-AT @ $12.60

Insurance put: 2/18/07
Position: March $85 PUT MRO-OQ @ 65 cents. Stop $85

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HES - $51.42 -4.16 - Hess Corporation
(Formerly (AHC))

The new high was short lived and the -$5 drop triggered our put insurance entry at $52.50. Maintain a profit stop on that put at $47. FBR upgraded HES to an outperform on Thursday citing an increase in reserves and growth from several new projects. The analyst raised his target price to $69 from $58 saying a 100% owned Gulf of Mexico project would add $15 to the share price.

To see the initial commentary on this position click here

Earnings: Jan 31st, $1.13, vs $1.44 in Q4/05, 230% replacement

Current recommendation: Buy at $47

Position:
11/05/06 2009 $50 LEAP Call VHS-AJ @ $6.80
Cost adjustment put exit +1.60, cost = $8.40

Insurance Put: Triggered Jan-3rd @ $49
01/03/07 May $45 put HES-QI @ $2.60, exit 1/26 $1.00

Insurance Put: 2/26/07
MAY $50 PUT IGG-QJ @ $1.35, profit stop $47

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BTU - $38.94 -5.50 - Peabody Energy

The buyout of TXU was responsible for the coal crash. TXU had planned to build 11 new coal fired plants and the coal would have come from Peabody and Arch Coal. As part of the deal to acquire TXU the investor group said they would scrap plans to build 8 of the 11 plants. This knocked BTU back into consolidation range where it spent the last six months. The plants were not going to be completed to 2011 so you could say this was a drastic over reaction to the news. I am adding a short put to reduce costs if BTU declines to $35.

SELL JAN-08 $30 PUT LLW-MF is BTU touches $35

To see the initial commentary on this position click here

Earnings: Jan-25th +42% including special items.

Current recommendation: Buy at $35

Position:
10/22/06 Jan-2009 $50 LEAP Call ZZT-AJ @ $8.70
02/05/07 March put stopped -$1.00, cost = $9.70

Insurance put: Triggered with drop through $39
01/03/07 March $35 Put BTU-OG at $1.15, stopped @ $42.50

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DVN - $64.45 -1.71 - Devon Energy ** Closed **

Devon continued to show no life and I said last week I would close it without any rebound. The LEAP is 10 cents below our purchase price and the put is in the money. We will exit with a breakeven or better.

Devon is on the brink of a support failure at $63.50 and we still have the March $50 put. I would monitor the put carefully on any further decline in Devon and it is entirely possible we could see a touch of $60 before the March expiration. It is currently in the money so we should capture any further drop. I am removing the stop and leaving it up to you when to close the put now that Devon is out of the portfolio. The impending fall in nat gas prices is the weight on Devon.

To see the last full commentary on this position click here

Earnings: Feb-7th, $1.36 vs est of $1.36

Current recommendation: Buy at $60

LEAP Position:
10/03/06 Position: 2009 $70 LEAP Call VVH-AN @ $9.00
Cost update: 1/22 Put exit +0.20 = $9.20

Insurance put: 2/16/07
MARCH $65 PUT DVN-PM @ $1.05.

Insurance put: Triggered 12/18 at $69
Position: Apr-2007 $60 Put DVN-PL @ $1.30, exit $1.10 1/22

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RIG - $75.43 -3.32 - Transocean Inc ** New Stop $74 **

The nearly $6 drop from Monday's highs put RIG back into the congestion range where it spent the last two months. There was no news and no change in their positive outlook. It was just a market correction at its finest. No news and no change in play.

Their rig report released Feb-2nd

To see the last full commentary on this position click here

Earnings: Feb-14th, $1.25 vs 46 cents in prior quarter.

Current recommendation: Buy at $74

LEAP Position:
10/03/06 Position: 2009 $80 LEAP Call VOI-AP @ $12.90
01/31/06 Cost update Put stopped -1.15 cost = 14.05

Insurance put: Triggered at $79 on Jan-3rd
1/3/07 Feb $75 PUT RIG-NO @ $2.55, stopped $77.50, $1.40

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TSO - $92.20 +.97 - Tesoro Corporation ** Stop Loss $89.00 **

Tesoro survived the market crash and actually posted a gain for the week. I raised the stop once again because I think this spike is getting out of hand. We are up +$25 on the LEAP and I am not giving that back! If stopped we will reenter with a different strike on the next dip. Citigroup raised the price target for TSO to $112. Let's hope they are right!

To see the last full commentary on this position click here

Earnings: Jan-29th, $2.28 +129%

Current recommendation: Hold

LEAP Position:
10/04/06 Position: 2009 $70 LEAP Call ZGC-AN @ $7.70

Insurance put: None

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SLB $62.25 -2.33 Schlumberger

SLB gave back last week's gains and returned to support on no news. I added a short put to reduce costs.

SELL JAN $55 PUT WUB-MK on a touch of $60 by SLB

To see the last full commentary on this position click here

Earnings schedule: Jan 19th, +71% to $1.13 billion

Current recommendation: Buy at $60, stop at $55

LEAP Position:
1/2 9/11/06 @ $8.60
1/2 9/12/06 @ $8.00
Position: 2009 $70 LEAP Call VWY-AN @ $8.30
Cost update for expired Jan put +2.00 = $10.30

Insurance Put: 9/18
Position: Jan $50 Put SLB-MJ @ $2.00, expired

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SUN $63.87 -2.38 - Sunoco

Sun actually performed rather well and gave back only about half of the prior week's gains. No complaints here!

SELL JAN $55 PUT WUD-MK on a touch of $60 by SUN

To see the last full commentary on this position click here

Earnings: Jan-31st, -57% $1.00 vs $.96 analyst est.

Current recommendation: Buy at $60, stop at $54

LEAP Position:
9/12/06 Position: 2009 $70 LEAP Call VUN-AN @ $13.50
Cost update expired Jan put +2.40 = $15.90

Insurance Put:
Position: Jan $55 Put SUN-MK @ $2.40, expired

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FST $30.70 -2.69 - Forest Oil ** Closed **

Forest disappointed everyone with a drop in earnings and a warning that Q1 would also be lower due to production problems and bad weather. This was a real case of bait and switch. Forest had been very positive in their conference presentations and then posted at 46% drop in earnings.

Enercom conference presentation

To see the last full commentary on this position click here

Earnings schedule: Feb-27th

Current recommendation: Buy at $30, stop at $27

LEAP Position: 9/12/06
Position: 2009 $40 LEAP Call OJG-AH @ 4.50

No insurance due to cheap LEAP

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VLO $57.00 -1.77 - Valero Energy

Valero held its ground and part of the prior week's gain despite the various refinery problems.

They presented at the Credit Suisse Energy Conference on the 8th. You can listen to that presentation here

No other news and no change in play.

To see the last full commentary on this position click here

Earnings: Feb-1st

Current recommendation: Buy at $50, stop at $45

LEAP Position:
9/24/06 Position: 2009 $60 LEAP Call VHB-AL @ $7.70
Cost update expired Jan put +2.25 = $9.95

Insurance Put:
Position: 9/25 Jan $45 Put VLO-MI @ $2.25, expired

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PBR - $86.47 -9.14 - Petroleo Brasileiro ** Stopped $89.50 **

Petrobras imploded with China and the Latin America markets. It was also hurt by the Chavez nationalization of the remaining properties in the Orinoco Belt. It was a bad week for Asia and South America.

To see the last full commentary on this position click here

Earnings schedule: N/A

Current recommendation: Buy at $92, stop at $85

LEAP Position:
9/08/06 Position: 2009 $100 LEAP Call VDW-AT @ $14.90
Cost update Jan expired put +1.80 = $16.70, exit $12.50, -4.20

Insurance put:
9/11 January $70 PBR-MN @ $1.80, expired

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DO - $75.12 -4.72 - Diamond Offshore ** New Stop $73.00 **

DO continued its decline and based on the chart I don't want to spend any further money on puts. I added a new stop loss and we will exit if support breaks.

To see the last full commentary on this position click here

Earnings schedule: Feb-8th

Current recommendation: Buy at $75, stop at $69

LEAP Position:
8/29/06 Position: 2009 $80 LEAP Call VCT-AP @ 14.20
Cost reduction: Oct $70 Put profit -3.15, cost now $11.05
Cost increase: Dec $60 put expired -2.40, cost now $13.45

Insurance Put:
10/08 Dec $60 Put DO-XL @ $2.40, expired

Position closed:
10/03 October $70 put DO-VN @ $1.65, exit @ $4.80, +3.15

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ATPG - $38.58 -4.36 - ATP Oil and Gas Corp ** Closed **

ATPG also disappointed with earnings and another star performer bit the dust. This was not a good week for earnings surprises!

To see the last full commentary on this position click here
Earnings schedule: Mar-2nd.

Current recommendation: Buy at $38, stop at $34

LEAP Position:
8/20/06 Position: 2009 $40 LEAP Call VCL-AH @ $11.70
12/17/06 Cost update expired Dec 35 put -1.50 = $13.20
Exit 3/04 @ 8.50, -4.70

Insurance put:
9/06 Position Dec $35 PUT HKU-XG @ $1.50, expired

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PTR - $112.66 -7.86 - Petrochina ** Stopped @ $119 **

PTR took a substantial hit on the Asian debacle and gapped through our stop at $119 on Tuesday. I like PTR again in the $105-$110 range so I am putting back on the watch list.

To see the last full commentary on this position click here

Earnings schedule: N/A

Current recommendation: Buy under $125.50, stop at $119

LEAP Position:
5/14/06 Position: 2008 $120 LEAP Call LJC-AD @ $16.20
Cost adjustment: Close short Dec $115 call +1.30 = $17.50
Cost adjustment: Close long July $90 puts +3.00 = $20.50
Cost adjustment: Close long Sept $110 put -2.60 = $17.90
Cost adjustment: Expired Dec $100 put +2.20 = $20.00
Cost adjustment: Closed Jan $135 put -2.60 = $17.40
Exit 2/26 bid at $10.40 for -$7.00

Insurance put: (12/31)
1/03/07 Jan $135 Put PTR-MG at $138.50, $1.90
1/04/07 Profit stop at $132.50, $4.50 for +2.60.

Insurance put: (9/11)
Position: December $100 Put PTR-XT @ $2.20, expired

Insurance put: (8/13)
Position closed:
Sept $110 Put PTR-UB @ $2.40, stop @ $106 @ $5.00, +2.60

Insurance combo: Closed
Short: Dec $115 Call PTR-LC @ $3.20, 6/13, exit $4.50, -1.30
Long: (2) July $90 Puts PTR-SR @ $3.70, 6/13, exit $0.70, -3.00

Insurance puts: (Closed 6/7)
Closed: June $105 PUT PTR-RA, @ $4.20 (5/22), exit 6/7 @ $4.30


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Non-Energy Positions
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None
 

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