Trade of the Day: Buying FXE June 22nd 125-126 Strangle for $1.88
Risk: $188 per 1 lot
Reward: Unlimited
Chart: Bearish overall, picked up a few buyers at the $122 level.
Notes: I am playing movement in the FXE before the Greek elections and since the stock has stagnant lately, it is due for a major rip your face off movement, but I’m not sure in which direction.
UPDATE 6.27.2012 Thankfully I managed this trade will and got out of it for $1.20. Moving to the next trade.
The news of its chairman resigning today, the day
after the CEO quit, encourage a huge sell off of the stock.
The FTSEurofirst was up .2% as investors placed cautious bets to brace themselves for the upcoming
Greek elections. The Pharmaceutical and food & beverage industries led the way to shallow gains. In
Spain retailer Inditex was rewarded for their first quarter profit growth with an 8.4% jump in stock
prices.
In the US the MBA purchase applications were released today with purchase applications jumping 13%,
their highest level in 6 months, pointing to strength in home sales. Refinancing applications also 19%
back to its levels of April.
In commodities energy and metals are down today; crude, natural gas, gold and silver all in the red.
Contributer Chris Rygh is currently pursuing his MBA in Wisconsin and has a passion for the Market.
Comments can be directed to ryghcw19@uww.edu
TiVo’s first-quarter loss of $0.17 a share was wider than the analyst expectations of $0.15 cents a share. TiVo also announced that it expected a second quarter loss of $28 million to $30 million and service and technology revenue of $53 to $55 million. Previously, analysts had expected a loss of $16 million, almost doubled in current expected losses. The majority of the loss is associated with litigation expenses in TiVo’s lawsuit with Verizon Communication (VZ) over patent copyrights. The California based DVR provider has seen major losses over the past few years as rising costs and increasing competition from cable companies and on demand services continue to pressure TiVo’s bottom line.
For the period ending April 30, TiVo reported a loss of $20.8 million, or $0.17 a share. Compared to the previous year’s profits of $139 million, or $1.04 a share, TiVo has significantly increased costs against their bottom line. Net revenue rose 48% to $67.8 million, while service-and-technology revenue climbed 40% to $54.5 million. Gross margin widened to 51.1% from to 46.1%. TiVo has not issued dividends in more than two years.
Thomas Doherty is a student at Villanova University majoring in Finance and Economics. All questions and comments can be sent to Thomas@KeeneOnTheMarket.com
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Break-even: I break-even on this trade if WSM closes at $35.40 on June 15, 2012.
Unprofitable: I lose money on this trade if WSM closes above $35.40 June 15, 2012. The most I can lose on this trade is the amount I paid can be worth $3 minus the price I sold it for, $1.60 for a total of $1.40.
Reason I Like This Trade: WSM has sold off the last 4 times, so I think it will continue. Also, I will not lose money on this trade even if it rallies, because I am selling premium.
UPDATE 5.22.2012 Part of the reason I liked this trade is because I think the stock market is headed lower. I will leave this Spread on as it closed worth $1.30
UPDATE 5.24.2012 I talked about this yesterday in the LIVE trading room, I took off half the position at $1.65 and I still in the other half and it is worth $1.25
UPDATE 5.29.2012 I am glad I took half of my position off for a profit and I am leaving the other half on, but the stock continues to work higher.
UPDATE 5.30.2012 With a sell-off in the stock market today, I took the other half of my position off at $1.35 for a net of $1.50. Time to move on to the next trade.
Read more about total by www.keeneonthemarket.com
I still want to see a “Panic” day of the stock market down 2% in a day and flush out some weak bullish hands. The key levels to the downside is 1274, which is the unchanged on the year and if we take that level out then it could get real ugly. The news out of JPM and Europe does not look as it is improving and with Facebook now under the $38 IPO price, I think we continue lower. I do think that the stock market is oversold, but have yet to see a rally day in May when the stock market closes on the highs of the day. This week might be a slow one with little economic data, with Home Sales tomorrow, Durable Goods and Jobless Claims Thursday, and Consumer Sentiment on Friday.
