Category: Finance

I’ve been reading a new options book and listening to the comments here about hedging.  I put the two together and am trying something new.  I sold an iron condor (defined as both put and call vertical spreads on the same underlying ETF or stock at four different strikes) on EEM this morning with the expectation that the emerging markets ETF will stay range bound for the next six weeks.  While EEM was trading at $41.65 I sold a call vertical …

March was a pretty good month for me.  I increased my exposure close to the right time and was able to ride the rally off the lows to a profitable month while the major indexes lost value.  The smartest move I made was not closing any positions when the market started to look shaky.  My prediction of a 5% correction was close as the dip went a little over 4% before snapping higher again.  I’m not expecting this to be …

I charted the past three months of daily prices for the Dow Jones Industrial Average ($DJIA, $INDU, $DJI) after the index closed at 13,228.39 on Friday, April 27, 2012.

The DJIA hit its 2012 closing high intraday on Friday after nearly three weeks of being in rally mode.  The rally cooled at that point, as is …

Yesterday I mentioned that I’d probably add more exposure today with an index or sector ETF.  After much debate and waiting far too long, I went with a naked put on the Russell 200 index ETF, IWM.  I was really planning to add more SPY or DIA to go with the momentum of the big cap stocks that have less volatility than small caps.  However, the sell off in small caps was bigger than that of the larger stocks and …

My original QCOM May $67.50 naked put fell deep in the money as the stock’s price dipped down to $61.27 yesterday intraday.  Along the way in its recent decline I haven’t thought about closing out my option early.  I’m still bullish on QCOM and fully expect it to recover before long.  The only internal debate I’ve had with QCOM was when to add to my position.  I figured I’d sell a covered call along with a new naked put in …

This S&P 500 ($SPX) chart shows the past six months of daily prices after the index finished the week at 1,378.53  on Friday April 20, 2012.

A couple of weeks ago I questioned if the “Sell in May” crowd had started their annual exodus early.  Since then the market fell a few percentage points, but then …

I only have two options set to expire today, one covered call and one naked put.  Both of them are for small cap ETFs and both are finishing in the money.

One UWM April $35 covered call - I sold this covered call back in December while UWM was trading just a little under the strike and I’m letting it call away my 100 shares of UWM rather than buying rolling out the calls to a higher, …

Last year I had a plan to use LEAPS and other not-quite-so-long dated options to build the foundation of my investing year.  It was great in theory, but I got anxious when I started lagging returns in the first few months of the year.  That made me raise my strikes and increase my risk.  I did so not long before the big 20% correction hit.  The fast and steep correction led to a different anxiety.  I panicked near the bottom …

Close to the end of yesterday’s trading session I started to think it was time for me to leg back in on a few trades.  After all, I was only looking for a 5% dip and the SPX made it 4.6% lower.  That should’ve been close enough for me to act at the time, but I was too patient and missed the big open today.  That didn’t deter me much.  I just ended up selling higher strikes that I would …