Morning Rage 2.29.2012

Another important note, Israeli officials stated today, “They will not warn the US before attacking Iran.” Is that the reason why Crude just caught a bid trading at the $107 level. Furthermore, keep an eye out for Bernanke’s (semi-annual testimony) speech. Should be interesting! Also, Sweden and India reports Q4 GDP numbers. Lastly, the 2nd round of LTRO program just took place and the EUR/USD is currently trading near its session lows at $1.343. Fed QE Spending injections are causing investors to want to own hard assets like Silver and Gold. Silver suprasses the $37 mark as central banks are covering their short positions. Gold is trading at a key resistance $1780 level and continues to be the best inflation hedge for those fearing an inflationary environment,

Wednesdays before the bell earnings:
Costco – Reported earnings and revenue numbers that topped wall street expectations. Earned $.90 a share vs $.79 per share estimates. Revenue reported was $23B or up 10%. 52 week range ($69.5-$88.68). Costco CC is expected to take place sometime around the opening bell today.
Joy-Joy Global should meet or beat profits and sales expectations mainly because it is expanding into China’s International Mining Business. Analysts expect Joy to report $1.35 a share, up from $.96 a year ago. Revenue estimates are $1.15B for the quarter and year end revenue of $5.5B.

Liz Claiborne- Quarterly Earnings and estimates Q4E of $.10 Quarterly Revenue Q4E $477M. As of January 31st, there was a significant short float of 30%. In my opinion, any good news regarding earnings could send the shorts running and the stock flying.

By Greg Zimny


kotm is the leading real time equity options trading resource on the web. Led by Andrew Keene, a veteran options market maker and floor trader, provides our subscribers with essential daily trading reports that contain key equity option activity statistics, S&P e-mini daily pivot levels, and Andrews highest probability “Trades of the Week”. also operates the Live Trading Room where members can join us, see us, and learn how professional option traders trade real money on a daily basis.

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in-the-media Throughout a 10 year market making career at the Chicago Board of Options Exchange, Andrew went from a young clerk to an aggressive educated trader. At one point in his career, he was the biggest independent on the floor AAPL options trader in the world. Andrew regularly gives interviews on CNBC, Bloomberg, CBOETV, First Business, Options Profits and other media outlets. Andrew’s views are concise, often contrary to the mainstream, and sometimes controversial. He openly discusses his options trades and keeps his fans updated with his thoughts on the management of those trades.

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Bloomberg 1.18.2012

Andrew Keene, an independent trader, interviews from the floor of the CBOE with Bloomberg’s Trish Regan and Citigroup’s Mark Mahaney. Andrew talks about how he believes ebay’s auction front business is similar to a declining business model of Groupon (GRPN). As an options trader he gives his options trade and how he thinks Europe and a soft guidance will affect the company. He also discusses the 100 and 200 Day Moving Average and how those will affect his day trade for earnings. Andrew gives a great take on the fundamentals, technicals, and chart to place his equity options trade.

Cam at the Close 2.28.12

The ECB has lent over $450 Euros since it incorporated LTRO on December 21, 2012. There is speculation that the ECB is going to inject another $470 billion this week. In my opinion, the market has anticipated this move for a while and I think the official announcement should be a non-event. Then again, the trick is always trying to determine what information is priced in to markets and what isn’t. Amyris Inc. (AMRS) is getting crushed since the company reported poor fourth quarter results from its leading drugs. AMRS is down over 11% to $5.72. Apple (AAPL) is expected to announce its iPad 3 on March 7th. AAPL made another new 52 week high of $534.62. Dominos Pizza (DPZ) broke out of its wedge today and shot up 13.50% to $38.02. Pizza stocks were some of the best performing stocks in 2011. ZAGG Inc. (ZAGG) saw a 10% rally today after a .02 earnings beat. I am surprised the stock isn’t up more given that 50% of its shares are sold short.

With Gold and Silver showing continued strength, small beta pin actions plays are starting to show signs of strength. I like Paramount Gold Mining (PZG) on a break of $2.82-$2.84. Very easy risk management as a stop can be placed underneath the descending trend line. A break of $3.15 on heavily volume could send PZG to $4 in a short amount of time.


Unusual Options Activity 2.28.2012

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Earnings Trade of the Day 2.28.2012


Trade: I sold the COST March 82.50-80 Put Spread and sold the March 87.50-90 Call Spread for $.75 total. 
Profitable: I make money on this trade if COST Closes between $81.75-$88.25 by March 16, 2012.
Break-even: I break-even on this trade if COST Closes at $81.75 or $88.25 by March 16, 2012.
Unprofitable: This trade is unprofitable if COST Closes under $81.75 or above $88.25 by March 16, 2012.  The most I can lose on this trade is the amount this spread can be worth $2.50 minus the amount I sold it for $.75 for a total of $1.75.

UPDATE 2.29.2012 I got filled on this trade yesterday and COST is rallying but not enough for this spread to be worth more than I sold it for.  This spread that I sold for $.75 is worth $.57 good for 24% profit in one day. 

UPDATE 3.1.2012 I will leave this position on until expiration and it is currently worth $.44.

UPDATE 3.2.2012 After not taking my SINA and GPS earnings plays off for profits after earnings, I am bidding $.37 for this spread, good for a double if I get filled.

UPDATE 3.7.2012  This spread is still worth $.75 and I knew it would be worth more if I didnt close it, so now I am leacing it on because if the stock expired today it would be worthless.


Trade: I sold the FSLR March 40-41 Call Spread for $.24. 
 I make money on this trade if FSLR Closes under $40.24 by March 16, 2012.
 I break-even on this trade if FSLR Closes at $40.24 by March 16, 2012.
 This trade is unprofitable if FSLR Closes above $40.24 by March 16, 2012.  The most I can lose on this trade is the amount this spread can be worth $1 minus the amount I sold it for $.24 for a total of $.76.

UPDATE 2.29.2012 I did not get filled on this trade and I am a little upset, because the stock is selling off hard making this spread worthless.  Oh well, on to the next trade, but the thought that it was a winner makes me feel a little better.  On to the next trade.

UPDATE 3.1.2012 With FSLR selling off once again, this spread will expire worthless tomorrow.

UPDATE 3.2.2012 With FSLR selling off once again, this spread will expire worthless today.

UPDATE 3.5.2012 This spread expired to be worthless.  


Trade: I bought the SODA April 35-55 Strangle and sold the March 35-55 Strangle for $1.30 total. 
Profitable: I make money on this trade if SODA closes between $35-$55 and the April volatility does not get crushed too bad.
Break-even: I break-even on this trade if SODA Stangle Swap is worth $1.30.
Unprofitable: This trade is unprofitable if SODA Strangle Swap is worth less than $1.30.  This is a very hard trade to explain, but I basically want to the front month Strangle to be worthless and have April volatility not get crushed, so the April strangle is worth more than $1.30.

UPDATE 2.29.2012 With SODA selling off, but not as much as expected this spread is worth $1.10.  I will leave this trade on, because there is still a 35% skew between April and March volatility, so I think it will flat line, making this trade profitable.  

UPDATE 3.1.2012 With the spread increasing in value everyday closer to expiration, this spread is now worth $1.35.  I will be looking to sell the spread around $1.75.

UPDATE 3.2.2012 I am offering this spread in the book at $1.65 and maybe I will get filled.  The reason I like to put orders in the “spread book” is because it is free advertising, if someone wants to take the other side of the trade.

UPDATE 3.5.2012 I have this spread offered at $1.60 in the spread book, I have teo things working for me, the closer to March expiration the better and the more SODA selld off the better as well.  

UPDATE 3.6.2012 With the stock selling off even more, this spread is worth $1.65 and I am trying to sell it and close it, so I can move to the next trade.

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