SBR Traders Desk: Option expiration day as world markets rally

[SBR_John]

Could be a good day to gamble on index options on the call side.

Look at the last 3 days, firm opens followed by selling that gives way to a strong afternoon. Its holiday volume which kind of helps make it predictable.

Anyway the SPY Dec 145 calls closed at about 1.80 with the SPY at 146.79.

It looks like we could be in for a run higher maybe 2 points on the SPY. The tough part is finding an entry point and catching some of that run. Lets see how the ftse opens. As I recall there is nothing on the US calender except a post GNP revision.

[DrunkenLullaby]

You're playing with going with any bullish position in this economy John. I would recommend staying on the sidelines or picking up some gold, but good luck anyway.

[Dark Horse]

Futures up over 100 right now. Looks like strong opening.

Always opportunities. Netsuite (N) IPO'd yesterday. Shot from 26 to 35.

RIMM popped (Blackberries). Missed out even while watching it...

Solar stocks doing well.

[Dark Horse]

I just try to keep it simple. Waiting for McDonalds to come down a bit and ready to load up. With all these worries about a recession where are people going to eat? McDonalds isn't going anywhere. And they're just scratching the surface in China. There's a few people out there that could chow down on a big mac (like 4 times the population of the US).

[jjgold]

Look for late selling after 2:30PM

[SBR_John]

I think this one day play has leggs for those with iron clad bellies. SPY is up .45 pre to 147.30, puts that option around 2.30.

[Dark Horse]

RIMM is up 15%, but they're still well off their 52 week high. Tempted...

[SBR_John]

Powder dry.

Im not going to chase the big open pop. For a day trade I think the session lows will come in as they have the last 3 days about 11am to 11:30am in the east.

[Dark Horse]

So selling now and buying back in a few hours?

Opening bell. All hell breaks lose... Again. GL.

[SBR_John]

About time to look for the pullback. Doesnt look like its coming on schedule with the past 3 sessions but lets see. SPY has traded in a very tight range currently 147.90 at the high of the day.

I still think she pulls back to 147.29 and closes over 148, like 148.11.

[Destroyer]

A good play here is to straddle the option. In periods of high volatility in the financial markets, a straddle is the best strategy to deploy if there are uncertainties regarding the direction of price movements for the underlying deriative instrument e.g., stock, ETF, etc.

[SBR_John]

Spy is 148.34 with no let up in sight. I still think we get a dip but maybe now we look to buy at 147.40ish

[SBR_John]

Well we got the mini pull back (hope its a mini pullback anyway)

Im in the SPY Dec 145 call (SFBLO) at 2.51. Currently at 2.47.

I'm looking for a close of 3.11+ with a stop at 2.

[SBR_John]

Market holding in a very very tight range. Very unusal.

The SnP SPYs are now at 147.43 almost no change for an hour. Spooky calm.

Im not sure where we go from here. You could make a bullish arguement that selling never came in even at these higher prices and a rally is in the making. But just as likely is that the selling will come if we continue to flat line at these levels.

[DrunkenLullaby]

Slightly off-topic, but do any of you guys watch Bloomberg TV or do you slum it on CNBC?

Not only is Bloomberg's content at a much higher level (not alot of hype) but some of the female correspondents are quite stunning.

[SBR_John]

I watch cnbc but not on serious days like today. Better to block that stuff out.

Meanwhile we are in slow rally mode at the highs of the day. SPY back knocking on 148 and the Calls at 2.91.

[DrunkenLullaby]

Looks like a good call by you today John. Gold not too shabby either.

[SBR_John]

SPY at 148.22 a new high for the day. I'm bailing on the 145 calls at 3.20 for no good reason. This slow rally up is a bit hard to read and one would have to think there could be at least a little selling to creep in.

[Dark Horse]

Slightly off-topic, but do any of you guys watch Bloomberg TV or do you slum it on CNBC?

Not only is Bloomberg's content at a much higher level (not alot of hype) but some of the female correspondents are quite stunning.

CNBC's the Fast Money is great for traders. As far as the analysts on the other programs. Most of them are just filler. The way to make money is to be a step ahead of the news, but they're always trying to explain what just happened.

[HAPPY BOY]

Johnny I dont know what to make of this market. All the experts calling for a recetion in 08. I need some good guidance my friend. Im nervous. So far Im playing ostrich and sticking my head in the sand. Today was a nice day, but how long. I just don't see how some of the bad thing in 07 (housing, gas, world climate) dont come to roost in 08.

[SBR_John]

You will be a happy boy indeed in stocks in 08!

Im not big on the market but I do thinks stocks will continue to go higher into 09. The fact that experts say there is a 50% chance of a recession is very bullish. There will be no recession you can bank that. World economies are growing at the fastest pace in history and rates will stay low.

Grab some defensive stocks if you want to play safe. Names like Cisco, Catepillar, Philip Morris and Merk. Then buy a couple of names that have been destroyed lately but will come back strong in 08 like Bank of Amer, AMR and Starbucks.

Stay away from retail, housing and high flyers.