Today, I bought 40 Dec contracts of SPY Puts with a strike price of $85. I believe we will retest and break through the 850 levels before Dec options expiration. The three main catalysts are:
* Heavy selling due to hedge fund redemptions in mid November
* Institutional tax selling before the end of the year
* Lower seasonal year-end volume allows for easy manipulation of the market
On Friday, I sold out of Berkshire Hathaway at $4500 a share. I purchase the stake in the fall of 2006 at approximately $3300/share.
In addition, I sold 50 shares of Alleghany at $380 only to watch it skyrocket to $420 at the market close. I bought into Alleghany about a month ago at $310 dollars a share.
The markets are very irrational right now, and the only reason the BRK, Y, and MKL are stock rocketing is because they do not trade options and cannot be shorted. Market makers are unintentionally manipulating the prices given all the AIG activity. The US markets are the equivalent of the Karachi Stock Market where stocks cannot be shorted. So much for the confidence and stability in the US markets…
I still hold MKL, SHLD, SHLD Leaps, and SPY Puts. I purchase the S&P puts to protect against a crash into the next several weeks here.
I sold my RIMM call contract this morning for $1,261.73. Total profit of $470.00
I sold 560 shares of RIO at 34.50 for a loss of 594 dollars.
I bought two NOV 35.00 AKAM call contracts at $2.80.
I am still holding 2 OCT JWN calls and 1 NOV RIMM call.
From the article: “Ackman made little secret of his belief that Lampert was offering to pay below what the shares were worth, and at one point went to Ontario regulators to complain about Lampert.
Ackman remains Sears Canada’s second-largest shareholder.
However, over the past “several months,” according to one hedge fund manager, Ackman and Lampert had several conversations in which the Sears chief laid out some of his vision for the company, including plans to use some of the $2.6 billion in cash on hand to buy back stock. ”
I don’t buy NYPost’s story on a truce between Lampert and Ackman. I wonder if Ackman will focus on SHLD during the upcoming Value Investing Congress in late November.
PEACE OFFERING - nypost.com
I bought 1 RIMM NOV 17, 2007 $ 110.000 CALL contract today.
I sold 1 JWN OCT 50.00 Call contract today for 1.60. Profit: $45.00
I am still holding 2 JWN call contracts and my position in RIO.
I picked up 560 shares of RIO at 35.53.
I sold 1000 shares of EMC today at 21.00. Total profit : $440.00
I bought 1000 shares of EMC at $20.56.
I exited NOK today at 38.00 (entry was 37.19). Total profit: $ 430. 00. I expect NOK to eventually trade in the low 40’s, but there may some profit taking over the next day or two.
I still own 3 JWN $50 call options.