Weekly Update: April 16, 2015

| April 16, 2015

Weekly Update:  April 16, 2015


What To Watch

Equities had a quiet but positive week so far.  The S&P 500 is up over a percent since our last update and is up nearly 3% for the year.  Interestingly, small caps are seeing more positive action, climbing over 6% on the year.

Meanwhile, crude oil has made a strong recovery.  It’s actually positive on the year, after rebounding an impressive 24% over the last month.  Many energy stocks have followed suit, and are back to posting gains for the year.

So far, earnings season hasn’t resulted in any big market swings.  The most meaningful news so far has been in financial stocks.  Banks seemed to have finally turned it around, with many surprising beats reported this week.  That’s generally a good sign for the economy.

Economic news has been mostly uneventful.  The results continue to be mixed, making it very hard to know when the Fed will decide to raise rates.  The markets are betting on September, which seems like a reasonable bet.  As always, the decision to raise rates is going to be directly tied to several key economic variables.

Let’s look at our positions.


Portfolio Recap

Position #1: Take Two Interactive Software (TTWO) April 25 Calls

Price Paid: $1.15

Current Price: $0.20

Time Until Expiration: 1 day

The sideways market really hurt our April positions, which expire tomorrow.  TTWO basically traded in a straight line for the last month!  These calls could easily finish in the money, so make sure you sell them out tomorrow (if you’re still long) and avoid the risk of getting long shares.


Position #2: Prudential Financial (PRU) April 82.50 Calls

Price Paid: $1.77

Current Price: $0.05

Time Until Expiration: 1 day

PRU decided to stop moving the last few weeks, and time decay did the rest of the work.  Unless we get a big spike tomorrow, the calls will finish worthless.  If PRU does spike, make sure to sell out of the position.


Position #3: Blackberry (BBRY) May 10 Calls

Price Paid: $0.70

Current Price: $0.43

Time Until Expiration: 29 days

BBRY is back in the game, trading in-the-money for the first since we bought the calls.  We could be close to a breakthrough on this trade.  And, we still have almost a full month left for the thesis to play out.


Position #4: Cree (CREE) May 37.50 Calls

Price Paid: $1.47

Current Price: $1.17

Time Until Expiration: 29 days

CREE is has been fairly quiet, and remains in striking range.  This is the type of stock that can move quickly in a short amount of time.  We’ll definitely see some action before expiration in a month.


Position #5: GoPro (GPRO) May 48 Calls

Price Paid: $1.55

Current Price: $2.10

Time Until Expiration: 29 days

GPRO is definitely our best performing position right now.  It’s clearly in the black and hit as high as 68% gains so far.  Not too shabby for a trade we made last week!  Still a lot of room before our exit point, so stay tuned.


Position #6: Splunk (SPLK) May 60 Puts

Price Paid: $1.48

Current Price: $1.10

Time Until Expiration: 29 days

We just bought SPLK puts yesterday, so not much to say yet.  You can expect this stock to be volatile and our option value to change quite a bit day to day.  We’ll be patient with this trade for sure, as they’re our only puts at the moment.


Category: OTW Weekly Updates