Thursday, December 20, 2007
Looking for Mr. Goodbar
It sure looked like it was going to be another slow burn day, with premium getting sucked out of the near options at lightning pace. Then, at 13:00 a flurry of buying, followed by a modest low volume retracement before a full scale rally at 14:00 that carried through the rest of the day. Some suspicious pre earnings moves in RIMM got the momo going, which has followed through after hours. I made my move to sell naked the 51 calls in the first half hour and sat out the action for the rest of the day. With all the gaming that goes on at expiration, I'm tempted to hold back on tomorrow's session hoping to gain some clues to the level of short covering that was responsible for the breakout surge this afternoon. On the other hand, with excellent news out of ORCL and RIMM I'm expecting a good pop for tomorrow's open, which should scare the bejesus out of all the guys that sold the 51 naked all week, which will probably foster even more cover buying. If we actually do get momentum that pushes the near 52s into double digits I will be inclined to fade that move short term.