Two risky trades

At a few minutes before closing bell I bought November 60 CSX calls and Oct 20 Intel calls.

It looks like the CSX play will perform well. The tell was recent strong rail traffic reports. Another feature was the extremely heavy volume in both October and November calls that overwhelmed open interest in certain strikes. This a feature that I seek out in my options scans: volume that swamps open interest. I would be looking at other rails, including Norfolk Southern.

While volume was very heavy in Intel calls, it wasn't of the sort that exceeded open interest. So it was really a "gut" feeling kind of trade based on knowing some of the fundamentals. Call it a gamble. We know all about the "expectations" game on Wall Street. Intel had previously guided lower for the quarter and set up a not so unusual scenario of beating lowered expectations. C'mon, isn't it ridiculous that the bears in the stock reasoned that Intel would destroy the market by missing lowered estimates? Intel's stock is in a multi year dead money downtrend for certain, but its managers are not complete idiots that they would allow it to post a miss. Wall Street is onto the non growth stock ways of Intel and reaction to the numbers was muted. We'll see how the options perform tomorrow. They were cheap, implied volatility was fairly low and they are priced purely on intrinsic value.

It's now 3 majors down - with Alcoa, CSX and Intel beating the street. Let's see what JP Morgan pulls out of the bag tomorrow (no position). A good or decent report from JPM might stoke some bullish action out of the market.

I'm sorry that I don't tweet or blog about last minute trades until after they're done. There is just not enough time. Risk in these trades is also high enough that I do not want to accidentally lead anyone to lose money if I am wrong.