Dumped FEZ

Europe has been showing signs of weakening for a while and I should’ve reacted quicker.  This morning I capitulated and sold my 200 shares of FEZ for $37.10.  I received $7,418.84 after paying $1.16 in commission.  FEZ was up for the day and I thought I should cut my losses on an up day.  I pulled the trigger when I saw FEZ coming off of its highs.

FEZ bottomed at $37.05 this morning and I got out just before then.  It recovered up to $37.26 and then faltered again later in the day to move below my exit price.  Sometimes I’m part of the herd that exits on the exact wrong day, but I think Europe (and FEZ) have more room to move to the downside before it finds its footing.

My net realized loss is $781.91, including all premiums sold and bought during this series.  I started by selling puts for $422.41, bought the shares for $8,800, sold new puts for $198.42 and closed them for $21.58.  If I hadn’t used options, I would’ve lost $1,316.32 based on the price FEZ was when I started the series of trades.  Losing $781.91 is never fun, but it sure beats losing another $534.41.

If Europe repairs its fundamentals sooner than I expect and I miss getting back in soon enough, I still have other US exposure that’ll rise on the recovery.  I have a couple of option spreads (TLT and YHOO) set to expire this week along with an in-the-money naked put on DIS.  I’ll lose again on TLT assuming nothing drastic happens and should be good with my YHOO put spread too.  DIS looks destined to be assigned and I’m fine with it.  I might add another naked put out-of-the-money and a covered call too, but won’t make that trade until later in the week when I’ve seen what I’m left with and how it trades through the week.