Very weak action in European and Asian markets is carrying over to Wall Street this morning, as the major indexes all opened lower. However, I continue to like our open call positions and want us to hold on for now. The early move in the iShares Russell 2000 ETF (IWM) may have been a head fake, and if our calls expired this week then I would consider selling. Instead, we have until next week and I believe the current weakness is setting the stage for an end-of-the-year rally so continue to hold the IWM December $116 calls.
Similarly, Bank of America (BAC) is down today after warning on the quarter’s trading revenue before a conference presentation. Trading revenues are very volatile and not the main source of their revenue, so I’d like to watch how the stock trades amid the weakness. Hold the BAC December $16.50 calls and I’ll keep you updated on my outlook.
Our one trade that does expire this week is the MSFT calls, which has also gotten caught up in the market selling but I remain positive on the name. The position could be a good roll candidate to allow for more time for a rebound, so I will be in touch if I see an opportunity to do that. For now, keep holding the MSFT December $47 calls.
Update on Our Call Positions
Very weak action in European and Asian markets is carrying over to Wall Street this morning, as the major indexes all opened lower. However, I continue to like our open call positions and want us to hold on for now. The early move in the iShares Russell 2000 ETF (IWM) may have been a head fake, and if our calls expired this week then I would consider selling. Instead, we have until next week and I believe the current weakness is setting the stage for an end-of-the-year rally so continue to hold the IWM December $116 calls.
Similarly, Bank of America (BAC) is down today after warning on the quarter’s trading revenue before a conference presentation. Trading revenues are very volatile and not the main source of their revenue, so I’d like to watch how the stock trades amid the weakness. Hold the BAC December $16.50 calls and I’ll keep you updated on my outlook.
Our one trade that does expire this week is the MSFT calls, which has also gotten caught up in the market selling but I remain positive on the name. The position could be a good roll candidate to allow for more time for a rebound, so I will be in touch if I see an opportunity to do that. For now, keep holding the MSFT December $47 calls.