I thought about taking a break from the market while this whole bond yield issue works itself out. I was thinking that I have had a good run and should just sit back and let the dust settle for a while. Why should I risk all of the gains I’ve made when a fast decline can wipe it away so quickly? Even if I sit it out for 2-3 months I could still beat the major indexes with what I’ve done so far this year.
I rarely make rash moves like that without giving it a night to sleep on it. I was pretty sure though after mulling it over on my ride home from work that the worrying just wasn’t worth it. I woke up and watched a little Squawk Box on CNBC while getting dressed and saw the futures were somewhat flat. Panic (for the moment) was starting to drift away. Today and tomorrow bring a lot of information that could move the market in either direction though.
I decided to start looking at each stock I have an interest in to decide which ones, if any, I might dump. I covered ATI yesterday and feel I can wait until Monday to see how this week plays out and will likely write August 105 covered calls to give my likelihood of a profit a better chance.
My AAPL covered call is so far ITM that it will be assigned easily.
My JOYG naked put is so far OTM that it will expire worthless
My RVBD naked puts are so far OTM that they will expire worthless
My MHS naked put is $3.50 OTM and should be worthless in three days, but stranger things have happened. I’m taking my chance and sitting on it for now.
My NYX covered call is far OTM and will require some more analysis later. I think they’ll pull out of their slump, but just don’t know when. I’ll likely sell another covered call, maybe at the August 85 strike next week.
The rest of my options expire in July. With most of my June options expiring worthless I’ll have a solid cash back-up in my account. I’m sitting on the following:
TV – deep ITM now, but possibly finding support – more on this as it moves in the days to come
CHK – close to ATM
MON – close to ATM
WDC – well OTM
ARRS – slightly OTM, but comfortable
AA – slightly OTM and comfortable
All of this written out in front of me tells me to sit tight a little longer. By selling most of my naked puts out-of-the-money I’ve possibly given myself the cushion I need. If I end up dumping any of the above, it might be TV if it doesn’t come back to life soon. That’ll surely be bullish signal for the rest of you, as when I bought back my FWLT February 50 naked put for a $176 loss the first week of January only to see it break above 50 a few weeks before the expiry date of my option and then double to break 100 a couple of weeks ago.
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I like the humor about a stock getting bullish AFTER you had to let it go.
Don’t worry, a healthy dose of caution and portfolio management will serve you well.
I wanted to thank you for the story about ENCY. Thursday is a big day for me as I feel I must decide to let it ride through Friday when the FDA rules on it, or if I could profitably get out of the position. It’ll be interesting for me tonight and I’ll let you know.
At least ol’ Len Dykstra had a bullish sentiment on AMAT, and the up day on Wednesday felt good. I am starting to think a big part of successful investing is Summertime management. Dealing with all of the doubts and drops in the market are key. It is also a good time to plan for the Fall.
Alright, meeting at work to go to
Kadena