|
|
|
|
|
 |
|
|
 |
Wednesday, May 20th, 2009
10:15am (EST)
Freeport-McMoRan (FCX, $51.81, up $2.29) has been on a major roll since March and is up another 5% this morning. The stock is a frequent guest here in the blog and we have made some good trades in the past playing its options. I made a Watch List for the sector in May of 2008, a month after we launched the blog, when the stock was at $117. The original blog can be read here and it is a good review on setting up Watch Lists.
We went long Freeport-McMoran in early March with the March 35 call options and made a pretty decent return. The real trade was to go out to the June 35 (FPAFG, $17.10, up $2.35) back then. They were probably going for under $2 and THAT would have been a monster of a trade.
Of course, those options are expensive but for option players looking for some more upside, the June 55 calls (FCXFK, $2.10, up $0.70) and June 60 calls (FCXFL, $0.80, up $0.47) are active. The July 60 calls (FCXGL, $1.85, up $0.55) could also do well and you may be able to get better entry prices today.
The chart for Freeport is showing more upside at the moment but it is hard to trust a stock that fell from $70 in September to under $20 in 2 months. However, the decline was steep so the retracement could get interesting. The only thing working against you is the three-day weekend coming up and if these options do well for the rest of the week, I’d look to close them out Friday.
Rick Rouse
Rick@OptionsMentoring.com
Tags: Freeport-McMoRan
Posted in Commodities, Company Commentary | No Comments »
Tuesday, May 19th, 2009
7:45pm (EST)
Note: There was a problem with the Weekly Wrap sent out on Sunday night and I apologize if some of you received it late. We had a technical issue sending the newsletter out and some of you may have just gotten it today. The Weekly Wrap is posted Sunday nights here in the blog so if you can always check here if you don’t receive it by midnight.
OceanFreight (OCNF, $1.79, up $0.11) had another solid day before reporting earnings after the bell, adding 6%. The company reported a profit of 13 cents a share on revenues of $2.6 million and in after-hours the stock is up another 7% to $1.92.
I had mentioned in the Weekly Wrap that the stock was getting some heavy looks and on Monday morning the stock was still going for $1.52 after the open. I listed the December 2.50 calls (QZVLZ, $0.64, up $0.05) as an option trade but we were booked. They were going for 40 cents on Monday as well and are now up over 50% in just two days. They could inch up again on Wednesday if the after-hours gain holds.
The point I want to make is that both the stock and options have done well. If you had bought a 1,000 shares on Monday it would have cost you about $1,500. On Wednesday, it looks like you will be able to sell them for $2 and make 33% on you investment. With the options, you could have bought 20 contracts for $800 and sold for 70 cents (probably) on Wednesday. That’s $1,400 or a $600 profit in 48 hours.
The Baltic Dry Index (BDI) is an index for commodity shipping rates that measures dry bulk shipping rates on 40 routes across the world. I use this as a tool to get a read on the sector and when the action is starting to pick back up again. Today, the BDI closed at 2,605 which is a seven month high. We are still well off the heights of 11,000 which was hit in May 2008 but well above the low of 700 in December.
Although business is being conducted at reduced prices the renewed interest is a good sign for the shipping industry. However, we still have to protect our gains in case we run into some stumbling blocks. If you got into any of these trades, set stops accordingly, but hopefully, we can ride the gains for the rest of the week.
BTW, Cisco Systems (CSCO, $18.88, up $0.16) sneezed and made it to $19.35 before slipping…
Rick Rouse
Rick@OptionsMentoring.com
Tags: Baltic Dry Index, Cisco Systems, OceanFreight, options blog, options mentoring blog
Posted in Commodities, Option Trades, Sectors | No Comments »
Thursday, February 19th, 2009
Well folks, its been nearly a year since we started the blog and today’s entry is my 500th. I guess that means one or two things. I talk too much or there has been a lot going on with the market. I guess you could say both but what is really cool about the blog is that in seconds, it can take you back to what the market was doing on whatever day you pick.
This information is so valuable and I refer to a lot of my notes by searching this site. If you ever want to get a quick history of anything I have written about, like Google (GOOG, $353.11, up $10.45) or any other stock that you might be researching, just type it in the “search” box. Want some cool Watch Lists to track certain sectors that have three or four of the top stocks in that industry? Just click on the “Watch Lists” link.
Want to relive the hard fall Merrill Lynch or Lehman Brothers took? Just type them in the “search” box. Wanna check how oil flowed from $40 to nearly $150? Yeah, you get the hint…
We started the blog to provide you with another resource to learn about options. I wanted to take this time to thank all of you who check in to keep up to date with the stock market or to read what I am rambling about. I’m working on some other cool stuff to make the blog more interesting and valuable. I’ve been researching everything I have blogged about and the option trades I have profiled and I’m putting everything together in a spreadsheet.
What you should know about the trades is that I like to trade options on stocks I know. You will see how we have played the same stock over and over, up and down, with options that have made triple-digit moves. Of course, the portfolios are for informational purposes but you should use them to your advantage. It only takes a little bit of money to make a lot of money in options. I’m working hard to get this information out by the end of the month.
Anyways, feel free to drop me a line and let me know your thoughts on the blog, options, or the market in general. I really want to hear from everyone who reads the blog even if it’s to say “Happy 500!”. Send me your ideas, thoughts, and questions and I will try to cover most of the topics in the future. I won’t be able to answer all of you back but I do try and respond to a lot of them and I do read all of your emails. Thanks everybody for making the blog a huge success!
Rick Rouse
Rick@OptionsMentoring.com
Tags: Blog 500
Posted in Apple, Commodities, Company Commentary, Earnings, Economic News, Financial Stocks, Gold, Google, Hot Stocks, IPOs, Market Analysis, Mergers and Acquisitions, Oil, Option Trades, Sectors, Stock Earnings, Strategies, VIX, Watch Lists, Yahoo / Microsoft | No Comments »
Wednesday, December 17th, 2008
Gold is up strong this morning as the yellow metal is higher by $27 and now stands at $870/ ounce. I’ve been talking about the correlation between gold and a weak dollar and the gold trades outlined on Monday have been low risk/ high reward. I have been expecting a continuation of the sell-off in the dollar and today’s move in gold could put it on a track to $900 by the end of the week.
This week’s “triple witching” options expiration on Friday could have a big effect in both gold and silver. If gold continues higher it will fuel the buying in the shares of gold producers. Barrick Gold, Goldcorp, Gold Fields and Newmont Mining all are moving higher today.
Barrick Gold (ABX, $36.90, up $1.99)
The December 35 calls (ABXLG, $2.15, up $1.00) were going for 80 cents. Set stops at $1.60 and remember they expire this Friday. The January 35 calls (ABXAG, $4.10, up $0.90) were profiled at $2.70. Set stops at $3.75.
Goldcorp (GG, $32.65, up $1.00)
The stock is up $2 in two days and the December 30 calls (GGLF, $3.00, up $0.85) are now deep in-the-money. They haven’t quite hit a double from an entry price of $1.65 but set stops at $2.90. The January 30 calls (GGAF, $4.60, up $0.60) were at $3.50 and are up 30%. Set stops at $4.25.
Gold Fields (GFI, $9.78, down $0.30)
The December 10 calls (GFILB, $0.20, down $0.30) were profiled at 50 cents. They hit a high of 70 cents when the stock hit $10.10 but are quickly fading. The January 10 calls (GFIAB, $1.20, down $0.10) closed yesterday at entry prices but are down 8%. Gold Fields has always lagged the “Big Three” and really, probably, should’ve never made this list.
Newmont Mining (NEM, $41.59, up $1.49)
The December 40 calls (NEMLH, $2.00, up $0.70) were trading for $1 and you could close positions now for a 100% return. We will keep the January 40 calls (NEMAH, $4.30, up $0.70) open which were profiled at $2.85 and are showing a gain of over 50%. Set stops at $3.90.
It looks like NovaGold Resources (NG, $2.87, up $1.15) is going to get the $20 million it needs to survive. The stock was trading at $1.30 and I had mentioned the heavy volume it was experiencing as the bears were circling the wagons. Three weeks ago the stock dropped 80%, from $1.70 to 58 cents, when the company announced that it might not be able to repay the loan. Don’t get caught up in the hype.
Rick Rouse
Rick@OptionsMentoring.com
Tags: Barrick Gold, Gold Fields, Goldcorp, Newmont Mining
Posted in Commodities, Company Commentary, Gold | No Comments »
Monday, December 15th, 2008
With the Fed meeting on Tuesday, Gold stocks are enjoying some nice gains today. There seems to be some investors scaling back into gold with December and January call options.
Barrick Gold (ABX, $33.39, up $2.07)
December 35 call (ABXLG, $0.80, up $0.50)
January 35 call (ABXAG, $2.70, up $0.95)
Goldcorp (GG, $30.38, up $2.43)
December 30 call (GGLF, $1.65, up $0.95), or 135%
January 30 call (GGAF, $3.50, up $1.27), or 57%
Gold Fields (GFI, $9.87, up $0.67)
December 10 call (GFILB, $0.50, up $0.30)
January 10 call (GFIAB, $1.30, up $0.30)
Newmont Mining (NEM, $38.50, up $2.66)
December 40 call (NEMLH, $1.00, up $0.65)
January 40 call (NEMAH, $2.85, up $0.95)
I also wanted to warn some of you about NovaGold Resources (NG, $1.33, up $0.56). The stock is getting a tremendous amount of action as the company scrambles to raise $20 million. The deadline is December 29 and it will be interesting to see if NovaGold will survive.
Although gold could be set to rebound, the price has dropped because of the U.S. dollar’s recent strength. Gold typically acts as a hedge against the U.S. dollar which makes Tuesday’s FOMC meeting all the more important as to the direction we go from here.
Rick Rouse
Rick@OptionsMentoring.com
Tags: Barrick Gold, Gold Fields, Goldcorp, Newmont Mining
Posted in Commodities, Sectors | No Comments »
|
|
|  | | | |
Get RSS Feed
Freeport-McMoRan Breaks $50
Wednesday, May 20th, 2009
10:15am (EST)
Freeport-McMoRan (FCX, $51.81, up $2.29) has been on a major roll since March and is up another 5% this morning. The stock is a frequent guest here in the blog and we have made some good trades in the past playing its options. I made a Watch List for the sector in May of 2008, a month after we launched the blog, when the stock was at $117. The original blog can be read here and it is a good review on setting up Watch Lists.
We went long Freeport-McMoran in early March with the March 35 call options and made a pretty decent return. The real trade was to go out to the June 35 (FPAFG, $17.10, up $2.35) back then. They were probably going for under $2 and THAT would have been a monster of a trade.
Of course, those options are expensive but for option players looking for some more upside, the June 55 calls (FCXFK, $2.10, up $0.70) and June 60 calls (FCXFL, $0.80, up $0.47) are active. The July 60 calls (FCXGL, $1.85, up $0.55) could also do well and you may be able to get better entry prices today.
The chart for Freeport is showing more upside at the moment but it is hard to trust a stock that fell from $70 in September to under $20 in 2 months. However, the decline was steep so the retracement could get interesting. The only thing working against you is the three-day weekend coming up and if these options do well for the rest of the week, I’d look to close them out Friday.
Rick Rouse
Rick@OptionsMentoring.com
Tags: Freeport-McMoRan
Posted in Commodities, Company Commentary | No Comments »