This blog is for those that have a good understanding of the fundamentals of the market. If your still trying to figure out how much you might need to retire...skip this blog till after. It will be enlightening to read after the fact as everything i'm wondering about will be revealed.
I bought GS at 131. I bought them at the beginning of July with some of my teacher summer money. 10 measly shares, but hey, I was looking for about a $10 profit per share going into earnings. I expected GS to, as usual, blow away earnings even though they were in trouble with the SEC. The company is fantastic at making money and what many call "best in breed" so I had confidence I could make an easy 100 bucks off of them this month.
Last night GS settled with the SEC for 500m. A drop in the bucket for GS and the key to all this, they don't have to admit any fraud wrongdoing which means the likelihood of civil suits are taken off the table. The stock shot up to 155 and this morning it's about 151. A $15 profit, more that I expected. It will drop after Bank of America's less than stellar earning report and the fact that the dow futures are lower this morning. I should take my profit and pull the trigger right at the opening bell. But I'm hesitant.
GS is a fantastic stock. I could keep the 10 shares of GS, knowing it will drop a few bucks but will pop back up over the long haul. I wasn't planning on staying long on GS but now that they settled with the SEC there's no where to go but up for GS throughout the year. If I sell at the bell I could buy the 10 shares back at a lower price...but what if it doesn't go low enough to cover my trade expense? And then they have a blow out quarter and the price gets away from me on Tuesday? Here's what I decided to do...what do you think of this.
I am going to buy Nov 2010 155 calls on the what I expect to be a small pull back. I am going to keep my GS shares and let them run knowing they'll be back up to 180 by the first quarter of 2011 and take the dividend. I want to pick up more shares but I probably won't be able to do that until I start getting paid again in september. I tried to sell 1 contract of 130 puts to make some money but I don't have that much money in my account. It's too bad...I can't wait till next year when I'll have more money and can do that move. So that's my move for today.
Just getting numbers from Citibank. I have 3 units (300 shares) of jan 2012 calls with a 4 dollar strike price. I have time to figure out what I'm doing with that...
1 comment:
Thank god my options for citibank don't expire until 1/2012 and I was long. The bottom line is this..with the banks, they are getting their financial house in order but not loaning cash, which means they're not growing the top line. I like JP Morgan and Bank of America better than Citibank right now. I would love to sell puts on both and buy calls on both, but again, I don't have the cash.
I didn't sell GS and I didn't buy calls, thankfully. The stock dropped into the mid 140's. And I like the stock at this price, but again, I have no cash, so I will look at calls going into earnings set for Tuesday.
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