Multi-Fineline Electronx (MFLX)

I did a search on Investools for stocks with High Shorting Interest. MFLX is one of the stocks that came up.

It has bad fundementals in an industry that is currently bad.

It is on a long-term down trend since mid-2006.

Last earnings, it gapped up then went down on low volume.

Earnings a few days ago appears to be doing the same. And high from this earnings was lower than last high.

I placed an order to sell a 20C/22.5C vertical spread for $0.75 credit. Bid/Ask spread was 0.55-0.85

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RUT vs. IWM

Looking at the numbers for RUT & IWM.

I need to do 10 times more contracts on the IWM than the RUT for the same dollar amounts.

Even if I go 0.30 off the Mark on the RUT, I still end up with more in my account on the RUT.

I think for now I will stick with the RUT.

I cancelled my IWM order I placed earlier this evening and changed it to a RUT iron condor.

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iShares Russell 2000 ETF (IWM)

I just found out that the IWM is fully electronic where the RUT is still partly open outcry.

The partial open outcry is why I've often had to go quite a ways off of the Mark to buy or sell an option.

Although I have to pay more in fees because the number of contracts is larger for the same amount in a trade, I've been told that I won't have to move much off of the Mark and therefore the added fees are not a big concern.

I'm going to try this out and see if the IWM fills near the mark.

IWM Mar08 Iron Condor 76/77/60/59 Call/Put @ 0.28 (mark = 0.29)

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Russell 2000 (RUT)

I have a vertical with a short Feb 690 Put. I don't feel comfortable that the stock will stay above that at expiration this week. And as we get further into the week it will be even harder to get out of it.
So I am buying back the spread at a loss.
Order to buy at 3.20
Orig credit on the iron condor was 2.35
So total loss of 1.15

Update:
Order actually filled at 2.90
So total loss of 0.55

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Apple (AAPL)

Looking again to do a longer term option trade. And again looking at one of the present day “blue chip” stocks, Apple.

Above chart shows AAPL on a 5 year up trend. Up and down short-term trends are marked by green & red blocks.
It looks like each time the stock has bounced off the 5 yr trendline, it has made substantial gains in 6 months or less. When it had strong down trend, it made up the loss in less than a year.
However, in recent weeks, the stock has fallen thru the 5-year trendline.

I see support at 120 & 117.

Although none of the recently announced new products, have the impact of the iPhone, I cannot see where this company would go into a long term down trend.

I am going to look into buying some long–term (Jan09 calls)
Jan09 150 Call, Mark=14.67
Will hold off on this a bit longer.

And some short-term (bull put spreads)
Feb08 115/110 Put spread @ 0.86 credit
~75% probablity, ~17% ROI
Below both support lines

Feb08 110/105 Put spread @ 0.41 credit
~85% probablity, ~8% ROI
Lower ROI but less than 2 weeks AND lower risk.

I’m going to go with the lower risk / lower ROI one this time.
Put order in for Feb08 110/105 Put spread @ 0.45 credit

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Yahoo for YHOO!!!!!!

For once, I was on the good side of a surprise news event.

On Jan 31st, I decided to buy 2 Jan09 17.5 (at-the-money) Call options @ 4.45 on Yahoo (YHOO).
I had read that Yahoo was not projecting good earnings in 2008 because they were putting the money back into long-term improvements for profits in 2009. The stock was at about 1/2 the price it was in late October 2007. I thought this would be a good stock to try some long-term options on for those reasons and that it is one of today’s “blue chip” equivalents.

If I bought Jan09, then that gives the stock time to slowly increase in price.

The next day, Microsoft announced that they wanted to buy YHOO. The option shot up to 11.00
At that point I put a 0.50 trail stop on it.
The options sold the next day for 11.45, a net profit of 7.00

Yahoo for YHOO!!!!!!

It was a big profit on a small trade. But it was a positive trade and a big plug in the leak in the account balance lately.

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