Category: Stock Picks

This S&P 500 ($SPX) chart shows the past year of daily prices after the index finished the week at 1,295.22  on Friday, May 18, 2012..

The reason we look at charts is to try to find a pattern in the past that could reflect the direction to come in the future.  We’ve all read the disclaimers …

Bonds are getting interesting these days.  The fears out of Europe are driving yields lower on this side of the ocean, which finance 101 tells us bond prices are rising.  TLT is close to its all time closing high.  I expect it will top out soon and come back to the low 120s quickly and eventually back to the $112-118 area.  I believe that enough to keep my TLT July 127/129 short call spread in place for now even though …

Nine days ago I sold an EEM Iron Condor too close to the money and today I opted to buy it back and cut my losses.   I closed the position for $0.27 after opening it for $0.24.  The loss looks small that way, but commissions ate me up with 20 options in each of the four contracts.  I started off with a single order to close all four contracts, but it didn’t hit for …

I charted the past six months of daily prices for the Dow Jones Industrial Average ($DJIA, $INDU, $DJI, the Dow) after the index closed at 12,820.60 on Friday, May 11, 2012.

I went back six months on this chart so I could point out where the DJIA had its 50/100 day moving average (dma) bullish crossover …

I had an MDY May put that was coming up to its expiration date next Friday.  When I sold the May put, MDY was trading at $180.81.  This afternoon, while MDY was trading at $176.25 I bought to close my MDY May $182 naked put for $6.00 and paid $601.02 including commissions.  That gave me a whopping $8.34 in profit.  The cool part is that MDY fell $4.56 during that time.  So instead of losing …

I’ve been thinking about selling an option spread on DIA (Dow Jones Industrial ETF) since I made my EEM trade last Friday.  When I saw the Dow trail off this morning and then find support I went back in with a limit order above the midpoint of the bid/ask to see if I could catch it on a retest of the lows of the day.  Instead I waited around about four hours and saw it do nothing.  By the final …

I’ve been searching for a new iron condor to trade, but for each ETF that I check I don’t like one side or the other (the puts or the calls).  Instead of trying to force a trade I entered a vertical call spread this morning and left the put side of an iron condor off the table.  I am considering adding more exposure for a bullish equity play, but it doesn’t have to be today.  This morning we saw the …

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 …

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 …