Hello world. We are having a spectacular couple weeks on our story trades and we haven’t made many moves. Some deep ITM YHOO calls expired last week and we rolled forward to July $40s. We also took advantage of the SLTD run on Friday and sold a few trading shares and rotated them into HOTR. Both are good but I like the HOTR fundamentals better. Still have high exposure to SLTD. Still holding TASR calls and this looks ready to explode above $30 with police stories still mainstream in the news. The recent Baltimore demonstrations will keep strong momentum in this name. We exited NEON as this was mostly a technical trade for us. The short position in NEON is tremendous and any amount of good news can send this flying. We’ll keep a close eye on this and buy back in when it reaches a support level. GOGO has been extremely disappointing after the $22 break last week. I have May calls in this which are at risk. Did sell some on Friday which were still profitable. GPRO continues to show strength. This stock is just fundamentally cheap now. Upcoming earnings will be a catalyst. One more stock I want to mention – TSEM is now at 50 DMA support and may be a good entry here. I don’t know this stock well but have followed contributor Randy Hughes into this trade. We’ve been trading ITM calls on this for the last several months with great returns. Randy will hopefully soon post his story trading thesis on TSEM on this blog.
Out of all of these story trades, YHOO continues to be the safest one. What I love about YHOO is the floor is pretty well-defined. The stock can’t go much lower unless BABA completely crashes. This has allowed us to have a significant portion of our portfolio in YHOO in-the-money calls. The worst that can happen is the stock drops a bit and you take your remaining capital and roll forward. I have been in this trade for close to a year now and it contributed a significant portion of my 200% return in 2014. I expect much the same this year. YHOO has been underperforming BABA as of late. Look at the chart from the past couple weeks. They are not moving in-sync. YHOO should be around $46 if they were. This presents an arb opportunity and a good entry-point for deep in the money long-dated calls. Going in-the-money and long-dated gives you two ways to protect yourself. In the worst case scenario – you’ll have capital and time to roll-forward and win on another day.