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Monday, August 22, 2005

testing bands+range expansion


using option spreads
short 1 oct 20 @.90
long 2 oct 17.50 @ 20
.50 net credit

short 1 sep 27.50 @1.40
long 3 sep 25 @.20
1 net credit

short 1 oct 35 @.95
long 2 oct 30 @ .20

net credit .55


short one sep 17.5 @ 1.55
long 2 sep 15 @ .4

net credit .75

all the stocks have positive expectations when previously hitting the same std deviation points, expanding range on the down move and decent fundamentals and liquidity

used mostly in the money options to short as the stocks are beaten and look poised to advance, which would cause a contraction in premium if they rally back aove the strike. the worst case in all of these is that the stock stays between strikes and we get put stock slightly above market

in intc we would own stock at 26.50 if it stays between 25 and 27.50

in gps we own stock at 19.50, the bottom of the 8 month range.

in bks we own stock at 34.50, the support point

in jakk, we own stock at 16.75..about 7 times reaffirmed earnings

should any of the stocks crack,we re long 100 shares and short 200,giving us a back up the truck trade.

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