I took this screen shot of my account holdings this morning pre-market. With the latest jobs numbers, I expect to take another hit today. I’ve lost (on paper) nearly $8,000 this week. I included all of my “purchase prices” in this recap. For short positions those should be called “sale prices”, but TD Ameritrade keeps it all under the same heading.
The losses it looks like I have on some of these aren’t as bad as they appear from the last trade price (yesterday’s close) to where I entered (bought or sold short) the position since I’ve sold naked puts and covered calls on each of my current long positions. I’m not saying I’m doing well, I’m having a horrid week and today will be bad too. I’m saying that out of context the “purchase price” is misleading on the long positions. On the short positions it’s accurate. Too bad I don’t have any naked calls right now. Maybe I’ll sell some today. I’d like to find a time next week, if not this afternoon when the markets decide we’re low enough for now and find some footing. It’s hard to imagine that day being today with reality catching up with the bulls – the bears are in charge still. At least I haven’t sold more than one naked put lately.
Tough week all around. A nice recovery today, especially in the financials.
Alex, stock ownership is excellent hedge in questionable times. As long as the stocks are diversified, don’t go bankrupt (if one does, the others will carry you) and you are willing to hold them for a really long time, then you can rest easy. If, you start to be unhappy holding long stock, and get out with losses, this whole process will be turning against you. i’m avoiding options right now. Bought some more Ford stock, it’s cheap— planning future covered calls.
Kadena, I’m not sure what you are hedging against with stocks, unless you mean diversification itself is hedging. Options represent the same risk reward now as any time (VIX being equal). Buying or selling too many options can be good or bad in any market. Selling/buying options in a trading range, done correctly, would make this the exact right time to be in with options – reducing risk and increasing chances for gains.
I guess it’s time to add more to your long positions.