SSO - Position Update


Written on February 13, 2009 – 8:58 am | by admin

This morning I sold part of my etf position in SSO that I had bought at $21 & $22.  I sold the 7 shares I bought yesterday at the day’s low around $21.  The market wasn’t acting the way I thought it would (rally from the start, it actually looks weak) so I decided I would take my 5+%  and I already put in an order to buy at $21 should it get there again.  Eventually I have the idea of making this a full 100 shares and starting a covered call position.  However, if I keep buying at the bottom and then it rallies 5%, I have to sell.  I have to take a 5% profit in a day.  It would be irresponsible of me if I didn’t.

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SSO - Open Position (Partial)


Written on February 12, 2009 – 3:12 pm | by admin

Three days ago, my order to buy 6 shares of the SSO etf was triggered at $22.  Today, my order to buy 7 shares at $21 was triggered.  I was debating whether or not to sell my 13 shares at the end of the day and lock in a 4+% gain.  Since this reversal today was very impressive, I decided to hold on to them in anticipation of a follow through move.  If tomorrow looks strong, I may put in an order to buy the rest of my 100 and sell a quick Feb $21/$22 call.  I am going to do this because I feel that the low today will at least hold through next week.  We could have a good run to the upside from here.

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SSO - Position Update


Written on February 6, 2009 – 6:15 pm | by admin

Into today’s rally, I sold 2 Feb $26 strikes on my remaining SSO positions.  While this strike would put me at a loss for the position if I get called away, I will take my premium now and hope the market doesn’t get there.  since I don’t trust the rally, I feel the best idea is to get decent premium now and deal with rolling it should the need arise.  But waiting for $0.15 on the $30 strikes would be a waste.

Position 1:
Purchased: 100 @ 33.85
Initial Option Income: $5.30
Feb Option Income: $0.50
Other Option Income: $1.05
Expected Return: -4.98%

Position 2:
Purchased: 100 @ 31.28
Initial Option Income: $3.10
Feb Option Income: $0.50
Other Option Income: $1.05
Expected Return: -3.49%

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SSO - Close Position


Written on February 6, 2009 – 6:10 pm | by admin

I’ve had orders in my Zecco account to buy SSO at levels of $22 and below.  These orders have gotten hit a few times and last weeks swoon, my $22 order got hit.  Today I sold ALL 6 of my shares at $24.  While it was only $12 in profit,  it is a great percentage return.  I have already put my order back in for $22 and another 6 shares.  Should we ever break the 810/820 level on the S&P, I expect a few of my orders to be hit.

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FXI - Open Position


Written on February 6, 2009 – 6:08 pm | by admin

Yesterday I initiated a position in FXI (China ETF).  I have done this as China is showing good relative strength compared to our markets.  While the economic numbers from China are of questionable integrity, their own stimulus package may help take them from the bottom.  This position is way below my normal percent return requirements and I could have just as easily sold the puts but I am more comfortable initiating a position this way.

Buy: 100 @ $27.19 ($0 commission)
Initial Investment: $2719.00
Sold: $24 strike @ $3.50 ( $5 commission)
Net Investment: $2374.00
Expected Return: 0.89% (11.17% annually)

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BAC - Open Position


Written on February 6, 2009 – 6:03 pm | by admin

While I have been trying to stay away from the banks, I decided that I would initiate a position in Bank of America today.  Over the past 2 days, it has plummeted to a low of 3.77 on tremendous volume.  With the news about BAC maybe being “forced” to buy Merrill Lynch and the fact that the government has already put up huge numbers to back the bank, I feel that the chance of them going to zero is small.  This position may go from a small gain into a position that I hold for a few months if government policy starts to turn positive for the banks.

Buy: 200 @ $6.00 ($7 commission)
Initial Investment: $1207.00
Sold: $4 strike @ $2.28 ( $9.51 commission)
Net Investment: $760.51
Expected Return: 3.02% (42.98% annually)

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DRYS - Close Position


Written on January 31, 2009 – 3:21 pm | by admin

Thanks to some adivce from covered callers, I dumped my DRYS position after its 20% fall on Thursday.  I bought my $10 strike back for $1 and sold my shares at $8.865.

Bought 300 DRYS @ $11.95 ($7 commission)
Sold Feb $10s @$2.60 ($10.75 commission)
Bought Feb $10s @$1.00 ($10.75 commission)
Sold 300 DRYS @ $8.865 ($7 commission)

All in all, this resulted in a 15.49% loss or $481.  I’m glad I dumped the position because it fell another 20% or so on Friday and is starting the weekend in the $6.60 area.

I think the biggest point to learn from this transaction is that you can get out of a covered call position even if your calls are already sold.  I have heard some stories from people where they kept their position as the stock fell because the “couldn’t” get out while being short call options against their shares.  If I had held on to my shares, I would be down another ~$400 and crying myself to sleep.  Just beacuse you have sold calls against some shares, don’t feel that you can’t get out of the position should something cause you to not sleep at night.

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SSO - Open Position


Written on January 31, 2009 – 3:15 pm | by admin

As I said in my last SSO post, I had entered orders again at $21 & $22.  On Friday, my $22 got hit and I own 6 shares of SSO again.  I use Zecco for this so the trade is commission free.  I have orders to buy more at $14, $16.50, $18, $19, $20 and $21.  I have had these orders in for about 2 months and its only ever gotten down to $21 before rallying.  I then sell my 10-14 shares for a 6-10% profit and put the orders in again.

I am doing this to try and build a position in SSO to sell a call against but since I don’t trust the market, I am trying to dip my toes in until I feel more confident.

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SSO - Update Position


Written on January 29, 2009 – 1:04 pm | by admin

Into yesterday’s rally, I sold the $27 strike for one of my SSO positions.  If I get called away, I will have a slight loss.  I’m not expecting SSO to get that high but I wanted some premium this month.  Hopefully SSO closed the option period at 26.75.  That would be nice.

Purchased: 100 @ 30.50
Initial Option Income: $1.95
Feb Option Income: $0.45
Other Option Income: $1.00
Expected Return: -2.31%

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DRYS - Open Position


Written on January 29, 2009 – 12:57 pm | by admin

Yesterday I initiated a position in DRYS.  Today I am terrified that I own it.  Stupid.  I’m looking for ideas on this one.

Buy: 300 @ $11.95 ($7 commission)
Initial Investment: $3592.00
Sold: $10 strike @ $2.60 ( $10.75 commission)
Net Investment: $2822.75
Expected Return: 5.42% (not anymore)

Anyone got advice on what to do?

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