Port24 update

Well, I had my AOB and MELA called away from me last Friday in the Port. I am sad at losing MELA as I expect it to gain quite a bit over the next couple months - it started Wednesday with a couple dollar spike. I ended up buying some back and selling the $10 strikes. Again, too early, as it is up over $10 today.

On Wednesday I sold 29 ARNA $6 Sept calls at $0.20. They have announced that the BLOSSOM trial results will come out in late September and I halfway expect these will be called away. If it is still under $6 in mid-Sept I will not be crying as I expect at least a 50% stock move on the results soon thereafter.

Yesterday I bought my MELA back at $9.50 and sold the Sept $10s for $0.45. The FDA will rule on MelaFind by December so these should be good for trading until the November series.

Finally, I also bought 1600 ALTH at $7.99... selling 8 Sept $7.50 calls and the other 8 Sept $10 calls. Allos has an advisory committee meeting on Sept 2 so the price should either be above $10 or back in the $6s.

So the Port now has the following holdings: (# calls sold against holding)
2000 NBIX
1600 ELN
1000 DNDN
2500 SGMO
400 BCRX
1000 MELA (10)
4900 ARNA (29)
200 AMAG
1600 ALTH (16)
Cash = $6,567...
... for a total worth of about $125,000. This is a 19.46 annualized return... still below my target of 24% but well above the market returns over a similar period (S&P and NASDAQ).
Note that I actually do not think either the S&P nor the NASDAQ is a correct index to compare the Port against, as I think of this as an absolute return fund. If I am not positive, I don't care if I beat the market by 100%.

Current favorites:
Look for ALTH to return ~30-50% in the next week.
ARNA is one of the best September covered call plays ever at the $5 strike. 10%+ return for less than a month with a large margin of safety.

Regards,
Trond

Karl Denninger

Market-Ticker.org is one of my daily stops.
One of yesterday's posts, rendered to its core, is that overdraft fees, especially levied AT the ATM -- where the bank can obviously simply compare the amount being taken out versus the account balance and not allow the transaction -- are an intentional and unconscienable outrage.

Today may be a little over the top theatrically, but the outrage is genuine. I strongly urge the 3 or 4 minutes it might take to read it.

http://market-ticker.org/archives/1317-DAMNIT,-STOP-THE-LOOTING-NOW!.html

Regards,
Trond