Break-even:  I breakeven on this trade if GMCR closes at $22 or $32 between now and June 15, 2012.

Unprofitable: I look at the at-the-money straddle in GMCR in June and it is implying a $5 move either up or down between now and June expiration.  I want to be LONG premium in the back month for earnings and short it in the non-earnings month.  So, I bought the September strangle and sold the June Strangle and will make money as long as GMCR stays in a $22-$32 range.

UPDATE 5.7.2012  With time on my side, this Spread is currently worth $3.65 and increasing in value over 7% over 1 day.  I will leave it on for more potential upside.

UPDATE 5.8.2012  With lack of movement, this spread is increasing in value by the day.  This spread is currently worth $4, but I wll leave this on for more upside profits.  

UPDATE 5.9.2012  With stock moving all over the place, this Spread is currently worth $3.85, but leaving it on with time on my side.  

UPDATE 5.10.2012  In theory, everyday that by, this Spread should increase in value if the stock does not move.  Today, it is worth $4.05, but I will leave it on until at least June expiration.

UPDATE 5.11.2012  In theory, everyday that by, this Spread should increase in value if the stock does not move.  Today, it is worth $4.05, but I will leave it on until at least June expiration.

UPDATE 5.14.2012  This spread actually moves around everyday and today this Spread is worth $3.80.  I will leave it on until ar least June expiration.

UPDATE 5.15.2012  This spread is back to be worth $4, but I will leave it on.

UPDATE 5.16.2012  Time is on my side and I will leave this trade on until at least June expiration.

UPDATE 5.22.2012  This Spread is still worth $3.70, but it will be left on until further notice.  

UPDATE 6.4.2012  This Spread is still worth $3.40 and I am leaving it on to capture my profits as June options go down faster than the September ones. 

UPDATE 6.15.2012  This Spread is still on and is currently worth $3.50.  I will take it off on Friday

Read more about closes by www.keeneonthemarket.com

Any impressive movers: not really, body central corp BODY is down about 45% and for caffeine people
caribou coffee is down over 17%, an interesting side note is coffee is the second most traded commodity
in the world

With many industries down the drug industry is up and herbalife is proving to meet their upgrade as
they are up almost 5% today

And the big news of the day is the hit the non-farm’s payroll gave us this morning of 115,000 compared
to an expected 165,000 and a march of 154,000; this was anticipated by the market however still takes
its toll as does the unemployment rate which rose to 8.2% from 8.1%

Linked in had a surprising jump and after hours are up over 9%

The M2 money supply showed a quite a change to a -40.5 Billion from last week’s 26.4

Bloomberg released its consumer comfort index which came in at a -37.6 for week ending April 29 th
from a -35.8 the previous week which had taken it to a 4 year high. Personal finances and measure
of the buying climate were the two of the three components that were down indicating a current
somewhat pessimistic outlook by consumers

The EIA Natural gas report posted an increase in natural gas storage of 28 billion cubic feet(bcf) during
the week of april 27th, 30 billion was expected. This less than expected increase could indicate a higher
than expected demand as it settled up 4% to $2.34 per MMbtu

The San Francisco Fed president spoke today mainly addressing unemployment; his belief is that it is
high due to cyclical weakness, it was rather inconclusive

Thanks for checking in, we will do it again tomorrow

Where’s the Oversight?
These big mutual fund companies such as American Funds, Vanguard, and Fidelity are basically useless when it comes to holding boards accountable. How many times have you seen one of these companies file a 13D and take an activist position?
The reason I blame the mutual funds is because they accumulate a ton of assets under management from investors 401k’s and monthly mutual fund purchases. I can’t think of many times where one of these companies, who might hold 7% – 10% of the outstanding shares, ever takes on management.
Most mid-cap and large-cap stocks have institutional ownership of over 80% of the shares outstanding. They have the muscle to stop the sweetheart deals and good ‘old boys clubs on these boards but choose to do nothing.

The boards of most companies are filled with presidents of universities, CEO’s of other companies, former politicians, and other “celebrity” type directors. Rarely do you see anybody that has years of industry experience. The board has the fiduciary duty to protect the shareholders but in essence it is the CEO who runs everything and the boards are yes men and women.

Evil Hedge Funds?
The politicians and media love to portray the hedge fund industry as gun-slinging high rollers out trying to break up companies for a quick buck ala Pretty Woman. While there are some quick draw McGraw traders out there, a vast majority of hedge funds are longer term investors.
They get vilified in the media of being wealthy fat cat tax evaders but at least they are going after crappy managements. There are some great activist investors out there that have the capital to take a 10% stake in a company and force change upon horrible managements. This is something you don’t see the mutual fund industry doing.

The Need for Change
Hopefully people wake up to these cozy relationships on the boards and the self dealing that many insiders partake in and get angry.
McClendon may have started Chesapeake but once he took it public it wasn’t his company anymore. However he and the board have treated it that way. Who in the world has ever heard of a company buying a CEO’s map collections for hundreds of millions? Who ever heard of the CEO skimming off the top of every well drilled? Who ever heard of a CEO running a hedge fund right alongside the company? It’s amazing he hasn’t even been fired yet.
Unfortunately more of this goes on than most people realize or imagine. Until more people get angry about it, it will continue.

Unfortunately I own CHK. Fortunately it’s only been a round-tripper for me as I bought a long time ago for $19 and change and have ridden it up and back down again. There’s valuable assets there, but as long as McClendon’s at the reigns they are his assets.