Out With the Old… (DIA,XRT,PIR,FIT,SLV,XBI,XLE,GS,UIS,SIRI,RSX,QQQ)
The local authorities in my city have just notified me that my newborn son’s name is not acceptable to them, and that I’m going to have to change it.
If ever there were a case of government overreach, this is it.
They’ve informed me that in order to keep the moniker that I’ve longed to give him, I’ll have to go to the courthouse on my own time and at my own expense to have the child’s name officially registered before a judge.
If, of course, the judge agrees.
In this day and I age, there’s no shortage of asininity in the world. I can be a Satanist. I can have a sex reassignment. I can purchase and cohabit with a robot. But I can’t call my kid what I want to call him?!
What the hell is going on!?
People call their kids all sorts of crazy, dimwitted names, like Sourberry or Gauzeleak, while my wife and I sit puzzled at what could possibly be so wrong with the sweet sound of ‘Dander’.
That’s right, Dander.
My wife’s great uncle from Denmark, who passed away nearly a year and a half ago, was called Dander.
So what’s the problem?
There’s very little today that the modern nation state considers beyond its purview. Lawmakers regularly enter into the most private realms of their constituents’ lives, mostly in the name of ‘security’ concerns that are rarely legitimate.
It was only a relatively short time ago that they decided the capital markets were also a legitimate domain for their tampering.
And though the results on the surface appear to have been more than satisfactory, it clearly won’t end well.
It’s our firm belief that the unwind of all the current government intervention is about to begin. Not that the ultimate end is nigh. No. Just that the death throes are about to commence. And they may last a good long time. Indeed, we can’t say when they’ll conclude. But they’re clearly about to start.
Before we get to a trade that exploits that action, we have no less than a dozen initiatives now to discuss!
That’s what happens at year end, folks.
We start with a real oldie that wound down last week for good. It was opened on September 8th, 2016 and asked you to buy the XRT March (2017) 44 CALL for $2.54 and sell the XRT March (2017) 44 PUT for $2.55. Total credit on the trade was $0.01.
As it turned out, on expiry, we owned one lot of XRT at $44, so the following week (March 23rd) we wrote a letter called What Tuesday Wrought, in which we wrote a credit of $3.83 and sold a January 19th 41 CALL.
Failing some bizarre happenstance, the CALL will expire in-the-money tomorrow, and we’ll have suffered a $0.16 loss.
Next up is a trade from a letter called Volume Precedes Price (February 23, 2017). There, we suggested buying the PIR September 15th 7 CALL for $1.25 and selling the PIR September 15th 7 PUT for $1.30. Total credit on the trade was $0.05.
A day before it expired, we rolled out the PUT (then, in-the-money) until January 9th, and on that date we got PUT a lot of PIR at $7.00 a share.
With the stock now at $4.01, we’re underwater $2.94, and we say eat it. Another train’ll be pulling up any moment.
Moving along to our March 2nd trade from a letter called Polyunsaturated Cat Meat, you’ll recall that we had you purchase the FIT January 8 CALL for $0.85 and sell the FIT January 5 PUT for the same price, for a net zero outcome.
And so it ended. Both options expired worthless. Nothing done.
Our April 6th venture was entitled Break Out the New Silverware, and there we encouraged you to consider buying the SLV January 19th 17 CALL for $1.60 and selling the SLV January 19th 18 PUT for $1.75. Total credit on the trade was $0.15.
Today, with SLV trading at $16.06 (and our purchase price at $18.00), we’ve got a paper loss that we’re hanging on to. Precious metals are strong. We recommend you wait it out.
Next call came from a letter titled Crude Drug Dealing (April 20th), in which we urged the sale of the XBI January 19th 75 CALL for $3.45 and purchase of the XLE January 19th 69 CALL for the same price.
On January 4th of this year we sold the XLE 69 for $5.60, and tomorrow the XBI CALL expires in-the-money. We’re therefore obligated to roll it out and up by repurchasing it for $12.95 and subsequently selling the January 18th (2019) 80 CALL for $14.45. We pocket a $1.50 credit in so doing.
On June 22nd we wrote the DREADFUL ANXIETY PANIC SHOW, in which we recommended two separate actions. The first was to buy the GS July 7th 245 CALL for $2.67 and sell the GS January 19th 200 PUT for $6.90, for a total credit of $4.23.
There, we pocketed the full premium as both options expired worthless.
The second was to sell three (3) UIS January 19th 11 PUTs for $1.05 each and use the proceeds to purchase two (2) UIS January 19th 13 CALLs for $1.70 each. Total debit on the trade was $0.25.
As of tomorrow, our short UIS PUTs will be in the money, so we’re rolling them out. Buy back all three for $2.10 each and sell three UIS July 20th 11 PUTs for $2.40 each. You gain $0.90 in the process.
On November 2nd we ran a piece called Breaking News: Kremlin Behind Market’s Rise, in which we recommended buying the RSX May 18th 22 CALL for $1.25 and selling the RSX May 18th 22 PUT for $1.43. Total credit on the affair was $0.18.
Today, the CALL trades at $1.82 and the PUT for $0.62. Sell the former and buy back the latter and you net $1.38 on nothing laid out courtesy Vladimir Putin! Adjusted for minimal commissions gives you a take of 820%.
We’re Almost There, Gang!
On the 7th of December we asked you to purchase the QQQ January 12th 159.50 CALL for $0.50 and the QQQ January 12th 147.50 PUT for $1.30. Total debit on the trade was $1.80. We were expecting a big move, and we got it. Just not big enough. On January 4th we sold the CALL for $1.30. The PUT expired worthless. We lost $0.50 on the effort.
Finally, our December 21st trade, from a letter called Top O’ the Year to Ya! asked you to sell the DIA January 5th 245 PUT for $0.96 and buy the DIA January 5th 240 PUT for $0.41. With your $0.55 credit, we recommended you buy three (3) DIA January 5th 255 CALLs for $0.17 each. Total credit on the affair was $0.04.
In the end, everything expired worthless, leaving us our four buck premium.
We’re in the midst of a very powerful move, friends, that will not stop until it’s exhausted.
That’s why we’re playing it with a long calendar strangle.- Content protected for Normandy Executive Lounge, Option Trader Elite, Executive Lounge members only]
Many happy returns,