I took a $188.51 profit on my August 105 ATI naked put yesterday. I’ve been up and down on it for a while and decided to get out while it was still trading to my side. It only has six trading days left before it expires, but with the movement of yesterday ATI could move either direction by five points before I blink. I checked out the chart and see that ATI is starting to trend down and that made the final decision for me.
I’ve continued to wait on FWLT, but think I’ll accept my losses on it today. I made the right move in not buying my puts back yesterday as FWLT came off its lows and saved me a little. The futures are ugly this morning which could spell another bad day or could mean that we have a bad morning and the buyers come back for the afternoon. My move to buy AET calls was apparently ill-timed as they fell with the majority of other stocks yesterday. I’m glad I didn’t go in for any options more expensive so my loss won’t be so bad, although I’m not giving up hope yet. I have six days remaining before expiration and wouldn’t be surprised with a rally next week in AET. MRO was upgraded yesterday morning which would have been great on any other day, but yesterday notes like this were dismissed. To me, that just makes MRO a greater buying opportunity now and I’ll hold. I expect some more upgrades in the near future.
I got a long email from Kadena last night which sounded a lot like my conscience. His main point was to remember not to sweat the losses. Losses are built into my trading plan because I know they are a reality. I’ve admited during his bull run that my 40% annualized returns didn’t really have a chance of staying and now that the reality has poked its head out, I need to cut my losses and be ready to charge again in the next rally. Basically, I figure the more I save now, the more I can make later when the bull starts to run again. Luckily I have some good tech plays that have added some profit for me. Ironically, as I finished yesterday with a little more than $1500 in paper losses, I had over $300 in paper profit in my IRA.
I started asking for a correction a couple of months ago and deep down I’m glad it’s happening, but would be much happier if it wasn’t so brutally sharp. We can only hope that when the turn comes that it isn’t steep in the up direction so we can have time to jump aboard again.
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90 minutes since I posted and apparently I got out of ATI just in time. The put I bought back is now trading at twice the price. I should have bought an extra one on top of the one I had previously sold. I’m still waiting on FWLT. It’s down today, but not horrible and the call premiums are so high that I think I’ll be able to make more money by staying in it. I also see a potential support line for FWLT and if it holds and this dump ends could mean a good return for me. Before long I’ll have to look back to see where I can get into ATI again.