Take VZ and BA Profits

Plus: Close X and DRYS Calls

By Bryan Bottarelli
Thursday, November 06, 2008 11:26 AM EST
Thu, 6 Nov 2008 16:26:00 GMT

PLAY: Sell your BA November 50 Puts (BA WJ) at market, good for the day.

PLAY: Sell your VZ November 32.5 Puts (VZ WZ) at market, good for the day.

Dear Bottarelli Research Member,

As I mentioned yesterday, we’re finally seeing the downside move that I’ve been expecting. This morning, we were able to capitalize on this downward push by locking in a really strong profit on our DXD November 65 Calls (DXD KM). Once again, congrats on this winner.

Over the last hour, we’ve seen our two remaining put positions continue to push higher, while at the same time, our two upside call positions have been stopped out. Specifically, the DRYS December 22.5 Calls (OOC LX) and the X November 40 Calls (X KH) that we were holding in case of a market bounce have each triggered our pre-determined stop prices. If you haven’t already done so, close these positions out now. While I still like the idea of holding upside exposure in DRYS going into December, I fear that a powerful downside move will make stocks a lot cheaper over the next few days. I may decide to re-enter the DRYS call position, but let’s give it a few days to drift lower.

DRYS

At the same time, let’s go ahead and off-set these upside call losses by locking in profits on our two remaining put positions. The BA November 50 Puts (BA WJ) that we entered yesterday for $2.50 are now trading as high as $3.70, good for a 48% gainer. And the VZ November 32.5 Puts (VZ WZ) that we entered for $2.55 have traded as high as $3.30, good for a 32% gainer. Let’s go ahead and lock in both profits now!

BA

PLAY: Sell your BA November 50 Puts (BA WJ) at market, good for the day.

PLAY: Sell your VZ November 32.5 Puts (VZ WZ) at market, good for the day.

All told, that gives us three put winners against two call losers. In a volatile market like this, maintaining profitability is the biggest concern. Our strategy of balancing our directional bias is doing a good job of keeping our risk at appropriate levels while at the same time still allowing us to trade in the black. If any other trading opportunities come up, you’ll be the first to know. Until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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