Wednesday, September 3, 2014

Time to Take a Profit in Tesla

– Posted in: Free Rick's Picks

It's time to for subscribers who bought the Tesla October 3/September 5 300 call calendar spread last week for as little as 1.20 to take profits on half the position, since it's now trading for around 4.80 following a $20 rally in the stock.  For further details, check out today's tout and the accompanying chart.

TSLA – Tesla Motors (Last:251.55)

– Posted in: Current Touts Free Rick's Picks

Tesla’s strong rally has turned the Oct 3/Sep 5 calendar spread into a solid winner. The spread is currently trading on a bid/asked of 4.50/5.07.  This means subscribers who bought the spread for as little as $1.00 last week could have quintupled their stake. The most paid for it would have been about 1.54. In any case, I'll suggest offering half of the eight spreads to close today for 4.70. We'll plan on rolling what's left on Friday by covering (buying) back the September 5 300 calls we're short and shorting the Sep 12 300 calls at the same time. ______ UPDATE (10:40 p.m. EDT): The stock's push to an intraday high at 291.42 made the spread an easy sale for $5.00+, so I'll consider the order filled.  Now, roll the four spreads that remain into the October 3 /September 12 calendar as detailed above. _______ UPDATE (Sep 7, 10:31 p.m.): The midway price on the spread intraday was 2.30. Imputing the premium to the four October 3/September 12 calendar spreads we now hold would zero out the initial cost of 1.54 and add 0.76 to the real-time value of the spread.  We'll plan on rolling the spread again on Friday by selling the September 19/September 12 call spread (and thereby covering the short Sep 12 300s), but for now do nothing further. _______ UPDATE (Sep 15, 12:54 a.m.): I'll use a 0.37 price, midway between the intraday high and low, as the spread price unless I hear from someone in the chat room who did better or worse. Imputing this new premium income to our Nov 22 / Sep 20 spread gives us a CREDIT cost basis of 1.13, for a guaranteed minimum profit on the position of $452. That would be in addition to whatever the Nov 22

DIA – Dow Industrials ETF (Last:170.58)

– Posted in: Current Touts Free Rick's Picks

The Diamonds have come so tantalizingly close to the long-term Hidden Pivot target shown, 171.67, that we should probably do something, anything, just in case a major top is forming. Accordingly, I'll recommend bidding 0.42 for four Nov 22 150 puts, day order. This is highly speculative, so don't bet more than you might care to lose. _______ UPDATE (Sep 3, 8:41 p.m. EDT):  Our bid went unfilled; however, when buying options, especially put options, and most especially when the bull is dominant, the appropriate response is to keep lowering our bid until we get filled. According, let's try bidding 0.36 for six Nov 22 150 puts.  The bid is loosely pegged to the 171.97 target shown, although there's always the possibility the pullback we expect will come from p=171.25.

ESU14 – Sep E-Mini S&P (Last:1994.750)

– Posted in: Current Touts Rick's Picks

The stock market has grown so excruciatingly boring lately that one almost needs to avert one's eyes to get through the day. If you find your self numbed by the lack of activity, try bottom-fishing a midpoint pivot like the one shown.  This particular support will change if the point 'C' migrates higher, but the usefulness of the pivots themselves will not be diminished merely because the market is virtually trendless. ________ UPDATE (Sep 3, 8:35 p.m. EDT): Zzzzzzzzzzzzzzzzzzzzzzzz. ______ UPDATE (Sep 4, 10:53 p.m.): Smelling more and more like a top, don't you think?