Option Block 361: The Happy Bottom

Trading Block: A little bit of a down day on the street, but nothing like last week. Zynga and Groupon after the bell. ZNGA closing south of the 3 handle. VIX futures trading below the VIX cash. Grains and wheat options and the Russia embargo.

 

Odd Block: Combos trade in Flotek Industries Inc. (FTK), puts trade in Gerdau SA (GGB) wheel trade.

 

Xpress Block: LULU has been running hot, but cooled down during the day. Three-to-four leg tickets coming in September. IdeaHub adding 8 names into premium harvesting. What is we see of a Whaley product?

 

Mail Block: Listener questions and comments

• Question from Reuben Brooks - A few months back, on one of your shows, I think option block, Uncle Mike from RCM was talking about some kind of special offer for individuals in the "wealth accumulation" phase. You jumped in and pointed out that we listeners would be "stupid" to not take advantage of this. So, I am trying to not be stupid. I was not able to follow up right away on that (and in fact I have fallen behind on my podcasts), but I would like to find out more. Can put me in touch with Mike? If you have any other resources for me, i would love to hear it. I am 25, an engineer, I am intrigued by active trading but a bit dubious of technical analysis, and trying to find more edge, and use options to exploit that (either long-term or short-term). Have been trading options in 1 lots to learn. Your podcasts have been a HUGE help in blasting through the steep initial learning curve.
• Question from Christian C Caropolo - If you buy an option on a company that ends up merging or being bought out with another. What happens to the option you own?
• Comment/Question from Kaiserdog76: Thanks for the Option Block update today. Missed Longo’s presence but Sebastian did a decent job. Worlds shortest Odd block, but after looking on the web page I found the "Juicy" unusual activity I crave!! That VNDA trade is intriguing. There are some heavy OTM open interest in VNDA all over the strikes and going well out into the future. I do love me some Bio-Tech!  So today I have two stories for you. One of failure and one of success. Let’s start with the failure. Back when PBYI was around $49-50ish I had bought 100 shares in small chunks. When the stock popped to $70 I thought how smart I was and sold every last share. For a decent profit. I know you are thinking well how is that failure? That 4-5 thousand dollar investment would be worth over $20,000 now, so yeah. It can be hard to sleep at night FML for real. My second tale is a much happier one. I own shares on WIN and love the dividend and super well defined uptrend the stock has been in for quite some time. I wanted leverage though. So I took the proceeds from my dividend on WIN and financed some OTM call options on WIN. Well on Tuesday when WIN announced the IRS had "Okayed" them spinning some of their assets into a REIT. WIN popped and I realized over a %1,200 percent gain that day. Now I was able to sell those calls and lock in some fantastic profit all while not selling a single share. So you win some and you lose some I guess. Thanks for everything you guys do! Love the underground radio!! Mark- Kudos again for covering Barclay's and the HFT shakedown that has been going on. It is the biggest thing no one seems to be talking about. Please keep it coming!
• OX Question - Maker / Taker goes away in the UK. Are we next?

 

 

Around the Block: What will the US do, and how will it affect the markets?