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$25,000 Virtual Portfolio Update – Week 15 – $33,633

What a crazy quarter we’ve been having!

The last major update to our virtual portfolio was back on the March 12th and, although we do send out alert updates on a regular basis and discuss the trade ideas daily in Member Chat, I think it’s about time we start a fresh page but this one will be brief and I urge you to read the original postand the update if you haven’t already to get an idea of what we are trying to learn by following this "hyper-aggressive" virtual portfolio model.  

As promised, it has certainly been a wild ride and our last Alert Update from May 12th left us off with $72,652 worth of closed transaction and a virtual net balance of $34,712.  As is usual around expirations, we reinvested into rolling and improving our remaining positions while cashing out more winners.  

The nature of this strategy is, of course, that the positions that are left open are usually losers but, hopefully, they are losers we are willing to keep working with.  As usual, our worst performing open position is FAS but, also as usual, FAS generates the most weekly cash – even with conservative, 1/2 covers.  Since May 12th, we closed the following:

  • 20 SDS May $20/21 bull call spread at .36, sold for .50 -up $380 
  • 40 FAS May $29 calls sold for .75, bought back at .20 – up $2,200
  • 10 HOV May $3.50 calls sold for .20, expired worthless – up $200 
  • 10 POT May $55 calls sold for $2.70, stopped at .50 – up $2,200
  • 5 AMZN May $205 calls sold for $3.10, expired worthless – up $1,550
  • 10 USO June $39 puts at $1.33, sold for $1.95 – up $620
  • 40 FAS May 27th $29 calls sold for net .35 bought back at .15 – up $800
  • 8 DIA May $127 puts sold for $1.92, bought back at $1.25 (5/6 at 9:48, omitted from last report) – up $536

Once again, we make money on our little FAS cash machines ($3,000), and we spent no money rolling them but we got burned as the June $29s dropped $1 to .75.  It’s a tremendously volatile position and the key is there are 4 weeks to expiration and we are in a position to sell another $9,000 to $12,000 worth of short calls.  At the moment we are naked (not much to lose at this point) and one day, maybe, we will get a win when FAS pops and we are uncovered.  

Until then, it’s like renting our an apartment and putting the rental money back into renovations each month and hoping to one day make a sale.  By avoiding making unfunded rolls – it’s like breaking even on mortgage and taxes while you wait for the value of your property to bounce back.        

Overall, we closed net $8,486 worth of positions this week, running our realized gains up to $81,138 but that unrealized FAS loss hurt us so let’s do the math.  

The following are our remaining open (unrealized) positions:  

  • 80 FAS June $29 calls at net $4.11 ($32,880), now .75 – down $26,880
  • 40 EGLE Sept $3 calls at net. 65 ($1,400), now .18 – down $1,880 
  • 20 HOV Aug $2.50 calls at net $1.25 ($2,500), now .35 – down $1,800
  • 20 C July $46 calls at .66 ($1,320), now .18 – down $960
  • 20 GMCR June $60 puts at net $2.55 ($5,100), now .27 – down $4,830
  • 16 DIA July $127 puts at $7.50 ($12,000) – now $4.15 – down $5,360
  • 4 CCL July $42 calls at $2.15 ($860), now $1.15 – down $400
  • 20 XRT June $55 puts at net $2.53 ($5,640), now $2.85 – up $640
  • 20 XRT June $51 puts sold for net .66 (-$1,220), now .73 – down $100
  • 6 POT Sept $60 calls at $3.15 ($1,890), now $1.45 – down $1,020
  • 7 GMCR June $70 calls sold for net $3.85 (-2,695), now $7.70 – down $2,695
  • 4 AMZN July $215 calls at $5.25 ($2,100), now $2.90 – down $940
  • 20 UUP June $22 calls at .13 ($260), still .13 – even 
  • 10 USO June $39 puts at $1.28 ($1,330), still $1.28 – even  
  • 10 EDZ June $20 calls at $1 ($1,000), still $1 – even 

We have $47,505 of unrealized losses – up almost $10,000 from our last update but mainly the darned FAS longs.  Fortunately, we also took $7,950 in virtual profits and that nets us out at a not too bad $33,633 – still up 34% from the start.  We have a pretty good mix of bullish and bearish positions and we would benefit greatly from a market move in either direction but a flat market is not kind to us and we will have to adjust our strategy towards more premium selling if it keeps up. 

Keep in mind that it’s the rolling and adjustments of the losing ends that are the main thing we are trying to practice.  When trading short-term positions, the hardest thing to do is to fix a move going against you – sometimes it’s worth it and sometimes it’s not but only practice will help you determine which is which!  

For example, technically, that FAS June $28 position is PRICED at .75.  Does that mean it’s WORTH .75 x 8,000 ($6,000)?  Hardly.  Has a week gone by lately when we have not generated $3,000 by selling calls against that position?  So, if we can generate $12,000 in 4 weeks selling front-month calls against the longer FAS calls – doesn’t that mean they are WORTH more than $6,000 to us? 

You have to look at your positions based on more than just their price.  Our DIA puts are protecting us from a worse-than expected drop and we have already cashed $2,968 worth of short puts against it and we originally had 8 May $124 puts in February, which have turned into 16 July $127 puts and our primary insurance, as we have made $8,633 in profits cost a net of $2,392 and it’s a lot easier to sleep after a poor market week like this one knowing they are there!  

Most of our other positions are the bad end of spreads where we’ve already cashed the winners but still (and I must always point this out) 90% of our pain comes from where we BOUGHT premium – it’s the selling of premium that keeps us in the game! 

I know this doesn’t sound well but, if all goes well, FAS will test it’s 200 dma at $26.50 – around where it was in mid-March.  From there it shot up to $32 in less than a month, our plan it to try to get to the July $27s, which are now $2.35 (up $1.60) without taking money out of our pockets.   That means our goal is to sell $12,800 worth of short calls to pay for the roll as well as to hopefully get the roll for less than $1.60.  Overall, the fortunes of the Financials are now tied in with those of the commodity pushers – here’s a great chart to illustrate how that early POMO infusion (Nov-Feb) was used to buy up commodities and now the IBanks are trying to gnaw their legs off to get out of the commodity trap (just like 2008).   

We EXPECT FAS to go lower, we PLAN for FAS to go lower – even though we HOPE it goes higher on Monday.  We don’t have to save up $1.60 and then roll either, we can sell (hopefully) 40 next weekly $28 calls for .60 (now .42) on a move up and there’s $2,400.  The cost of the roll down to the June $28s is currently .40 ($3,200) so we borrow $800 from cash to improve our 80 June calls by $1.  That improves our delta relative to the short caller and puts us in a realistic position to sell $27 weekly calls (now .95) if FAS falls below the $27.50 mark again (and that would be back to a half cover, of course as it fully pays for the roll.  

We’ll see how this plays out as the month draws to a close.  If the market falls violently next week, we’ll lose a bit on FAS but make a bit on GMCR and DIA and then what would happen?  We would cash those out and roll FAS lower and longer because we still like them long – we just don’t know when they will pop.  If the market flies higher and FAS hits $32 – then we wipe out our most of our $26,000 loss there and we have tons of money to put into rolling GMCR and DIA along because, very likely – a huge run-up like that would seem silly to us and we’d want to aggressively short it.  

This is how balancing works, even in an aggressive virtual portfolio. 

 


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  1. Phil

    Please keep this chat for $25KP questions.  

    We still have an open chat with lots of new comments in Friday’s Post.  

    Also, I won’t be here most of Monday.  I’ll have a post up in the Morning but will not be available until late afternoon.  Sorry on what could be a crazy day but it was unavoidable.  

  2. amatta

    Phil I have posted some questions on the Income portfolio (BTW Part 3 has not been included in the Porfolio Tab)… 
    Thanks 

  3. craigzooka

    Phil, in the following paragraph you say puts when you clearly mean calls(at least clearly to me :)

    “For example, technically, that FAS June $28 position is PRICED at .75.  Does that mean it’s WORTH .75 x 8,000 ($6,000)?  Hardly.  Has a week gone by lately when we have not generated $3,000 by selling puts against that position?  So, if we can generate $12,000 in 4 weeks selling front-month calls against the longer FAS calls – doesn’t that mean they are WORTH more than $6,000 to us? ”

  4. Phil

    Thanks Craig! 

  5. willsons

     PHIL    XRT position is June 55 & June 53???  

  6. amatta

    Phil,
    FYI and so that other members are aware of a potential risk…Apparently somebody gained access to PSW’s email server or database, as I received the following message with an attachment (which I imagine is a virus of some kind)… 

    From: newsletter@stockworldweekly.com
    Date: May 22, 2011 2:23:38 PM EDT
    To: 
    Subject: Stock World Weekly:May 22, 2011: No Easy Way Out
     
    This Weeks Stock World Weekly Newsletter
    MONDAY MARKET MADNESS
    TUESDAY – TESTING OUR REFERENCE LEVELS (AS PREDICTED!)
    WHICH WAY WEDNESDAY – PROBABLY DOWN
    THURSDAY THOUGHT – DON’T TAX OIL COMPANIES – NATIONALIZE THEM!
    FRIDAY – IT’S THE END OF THE WORLD AS WE KNOW IT
     
    View Newsletter »
     
     
    Thank you for subscribing to Stock World Weekly.

     

  7. Phil

    LOL Amatta – That’s not a virus, that’s our weekly newsletter!  It’s getting set up on it’s own site to keep the masses from clogging up the main site.  All current Members get it included with their Membership but new people can just sign up for the weekly newsletter.  

  8. Phil

    XRT/Wilsons – Actually, we did play to roll to the June $51 puts on 5/18 and the price held the next day, then Lori said she missed the roll on Thursday, but she didn’t really have the same play with just 5 June $53 puts and at that point I suggested a fix to roll, DD and go naked (which I hope she did because that worked perfectly).  Then you asked again that afternoon and I think I got mixed up and then called for an adjustment (again) on Friday to the June $53s as I forgot we did it when they were a lot cheaper to roll already.  

    The problem with people asking me questions on the same positions over and over again is that I end up with a choice of being obnoxious and saying "stop asking me" or just giving you what, in my opinion, is the best adjustment at that time.  That’s always going to change from day to day but, as a rule of thumb – it is fairly urgent that you have NO front-month open positions by the Wednesday of expiration unless you are either supremely  confident that they will expire where you want them to or, perhaps, if you are so screwed on Wednesday that it can’t get much worse by Friday!  

    In the grand scheme of things, walking away with $2 out of $2.85 back on XRT will beat the total loss we were facing a week ago so the spread isn’t terrible even at $55/$51 but you can improve the spread you do have by rolling the $53 puts down one strike for .45 or less (same as our Mattress plays) or, you could just roll to the Sept $53/49 bear put spread at $1.45 (about even) and that’s a $4 spread but longer term or you can wait for the July and Aug contracts to come up and see about rolling the long puts.  Don’t forget though, XRT has been crazy and QE3 isn’t dead yet so we’re just lucky not to have a big loser here so far.  

  9. willsons

    Thanks for the clarification.  Sorry to have caused any confusion.  I have June 55 and am half covered with June53 and half covered June 52′s .   I will see what Monday brings and roll the 53′s   Thanks for all  you do for us!

  10. Phil

    Oh you didn’t cause it – it’s very confusing because a lot of people ask and it’s right to ask – everyone has their own windows to work with but for me, it just ends up being a dozen of the same question sometimes and, especially on an expiration week when the markets are swinging and we’re super busy – I get a little frustrated and sometimes lose track.  

    Nasty open to the futures, by the way, US indices down about 0.35% at 6:09.  Dollar at 75.88, which is $81.75 Yen, $1.413 to the Euro and $1.622 to the pound and the EU does not look too bouncy at the moment. 

    Silver hugging the $35 line should be a good directional indicator.  Gold is $1,511, copper $4.08 (gap down from $4.11), oil is $99.55, gasoline $2.95 and nat gas also gapped down from $4.266 to $4.235.  

    The Nikkei is down at the 9,500 line – bad news if they fail that. 

    Again the BOJ has a golden opportunity to get the Dollar back over 82 Yen to calm the fears of exporters – will they do it?  

  11. Phil

    Submitted on 2011/05/23 at 7:29 am

    In the $25KP, we expected a cheap roll down on our 80 FAS June $29 calls and this is it so let’s go for the June $27 calls for +.50 ($4,000) if possible and, failing that, the June $28 calls at +.30.  Obviously, if you can do one for .25 and then another for .25 – that’s fine too.  It’s 25 days to expiration and our next move after this would be to sell calls and roll back to July to buy more time.  

    XRT is fine if you are in the $55/51 spread but if you have a $55/53 spread as some do, first of all realize that it’s a damn site better than the wipeout we were worried about and 2nd of all, if you can roll the $53 putter to the $52 putter for .50 – that makes a $3 spread for $3.35, which is better than a $2 spread for $2.85.  Alternately, you can play for the bounce by rolling the June $55 puts you own at about $3.20 and roll them to the Sept $53 puts about even, which buys loads of time to deal with the short puts.  

    EDZ is going to be a huge winner – ALWAYS sell into the initial excitement.

    USO June $39 puts, as I said, also take the money and run if oil is back over $97.50 (with a trailing stop of .25 or less below that line). 

    UUP June $22 calls we can hang onto as this should bring us close to $22 and they were just .13 ($260) so kind of boring to take a quick profit.  

    So that’s the $25KP but keep in mind the purpose of the $25KP is to learn how to adjust and how to take profits so this applies to lots of things!  Don’t forget – all it takes is some strong statement of support from the EU that they will not allow Greece or Portugal to restructure or default and that they will absolutely work with the IMF to assure the countries are able to borrow at reasonable rates through 2013 and we could be all "fixed" again – even if it is, as usual, all talk and no action.

    XLF gets very interesting at $15.50.  Selling the June $15 puts for .50 (if possible) is so nice that it’s good for 20 in the Income Portfolio and 5 in the $25KP.

    Submitted on 2011/05/23 at 2:39 pm 

    Also – I certainly hope everyone AT LEAST rolled FAS to the $28s – that’s a critical roll in the $25KP.  

    Good morning!  

    Quick summary of this morning’s post – DON’T BUY!  Take the money and run on the DIA longs and there’s no need to short, other than oil, which was a gift at $99.50 and if that line doesn’t work we can short at $100.  USO June $39 puts are $1.30 AGAIN so let’s buy 10 AGAIN for the $25KP and see if we can’t make another quarter or so!  

    Dollar goes below 76 and TBT goes above 34 – that is no good for Fed and Treasury, is it?  Now a weak dollar boosts our borrowing costs and if that puts our Government back to supporting the Dollar to keep rates down – how screwed would the Dollar bears be?  Lots of crossing interests in the currency and rate markets!  

    WFR/Rain – I love those guys!  Hardly worth waiting when we can sell 10 Jan $10 puts for $1.45 so let’s do 10 in the Income Porfolio for a nice start.  In the $25KP, IF the June $10 puts hit .50, THEN we want to sell 10.  

    Wow, oil popped again!  I guess this is just the shenanigans into the NYMEX close at 2:35 but very surprising to see them leap back over $99.  Let’s watch those June $39 puts for game on again at $1.20 – 10 in the $25KP.  

    FAS (corrected)/$25KP – Much as I hate to cap gains.  We need to cover 1/2 by selling 40 WEEKLY $26 calls for ..70 – just in case tomorrow sucks.  

     

    GMCR/$25KP, Scott – They were different as we got burned on earnings and they never pulled back.  Sometimes you just take a loss – we have to see how the markets hold up in general but it may just not be worth putting more money into them – not with our limited resources.  

    Submitted on 2011/05/25 at 11:45 am

    Now the USO $39 puts are .95 and now it’s time to buy 20 for the $25KP with a stop at .80.  

    Submitted on 2011/05/25 at 12:22 pm

    USO/Lunar – It was the DD.  I’m trying to follow the rule in the $25KP of only entering a trade AFTER one of our regular picks goes the wrong way and is worth a DD or a roll. 

    FAS/$25KP, Morx & Amatta  - NOW I like doing a 1/2 cover on FAS with 40 weekly $26 calls at .75 (again) this is not to full cover – if you have yesterday’s covers (same calls at .70), they just stay.  

    SDS June $21/22 bull call spread at .27 – 20 in the $25KP

    Submitted on 2011/05/26 at 12:30 pm

    Now I’m liking oil long off the $100 line (very tight stops).  As long as the Dollar is below 75.75, they have a good chance for a stick into the NYMEX close at 2:30.  

    Done with USO June $39 puts, now .98 in $25KP or wherever else by the way!  

    $25KP – FAS NEXT WEEK June $27 calls can be sold for .60 – let’s sell 40 of those and put a stop on the 40 THIS WEEK $26 calls at $1.10 (now $1.01).   

    FAS/$25KP, Morx – See above, it’s like a roll but you double cover and stop out the bottom half if it goes the wrong way on us.   Since we sold them for .75, if we buy back at $1.10, that’s down .35 and then we sell for .60 so it’s net .25 that we collected against 40 short next week $27s at worst (unless it gaps up past our stop).  

  12. Phil

    $25,000 Portfolio – Month 4 (16 weeks) 

    Last week we left off $81,138 (net of closed transactions) in our virtual portfolio and we made closed the following:

    • 10 EDZ June $20 calls at $1, sold for $1.75 – up $750
    • 10 USO June $39 puts at $1.28, sold for $1.85 – up $570
    • 20 UUP June $22 calls at .13 ($260), sold for .19 – up $120
    • 10 USO June $39 puts at $1.25, sold for $1.50 – up $250
    • 10 USO June $39 puts at $1.20, sold for $1.25 – up $50
    • 40 FAS May Weekly $26 calls at .70, sold for .40 – up $1,200
    • 20 USO June $39 puts at .95, sold for $1 – up $100

    It was oil week this week with 4 trades on the same strike.  Hey, when something is working…

    We closed net $3,040 worth of positions this week, running our realized gains up to $84,178 and our whole goal remains to close down the open positions, one by one with as little loss as possible.  Keep this in mind – if we can close our remaining positions without taking a loss (very doubtful), we end up with over $84,000!  

    The following are our remaining open (unrealized) positions:   

    • 80 FAS June $27 calls at net $4.66 ($37,280), now $1.05 – down $28,880 
    • 40 FAS May Weekly $26 calls, sold for .75 ($3,000), now .86 – down $440 – stop at $1.10 but, othewise, we just buy them back at day’s end or .75 or less if possible.
    • 40 FAS June Weekly $27 calls, sold for .60 ($2,400), now .47 – up $520
    • 40 EGLE Sept $3 calls at net. 65 ($1,400), now .15 – down $2,000 – rolling 20 to Sept $2.50 calls for .25, selling 20 June $2.50 calls for .30
    • 20 HOV Aug $2.50 calls at net $1.25 ($2,500), now .35 – down $1,800 – worth a DD for $700 more.
    • 20 C July $46 calls at .66 ($1,320), now .11 – down $1,100
    • 20 GMCR June $60 puts at net $2.55 ($5,100), now .06 – down $4,980 – rolling to July $70 puts ($1) for + .95, selling 10 June $80 puts for $2 to pay for it.
    • 16 DIA July $127 puts at $7.50 ($12,000) – now $4.75 – down $4,400
    • 4 CCL July $42 calls at $2.15 ($860), now .50 – down $660
    • 20 XRT June $55 puts at net $2.53 ($5,640), now $2.10 – down $860
    • 20 XRT June $51 puts sold for net .66 (-$1,220), now .31 – up $700 – lets buy these back and go naked for the weekend
    • 6 POT Sept $60 calls at $3.15 ($1,890), now $2.15 – down $600 – let’s kill these, I think $55 is a top.
    • 7 GMCR June $70 calls sold for net $3.85 (-2,695), now $13.40 – down $6,685
    • 4 AMZN July $215 calls sold for $5.25 ($2,100), now $1.70 – down $1,420
    • 20 SDS June $21/22 bull call spreads at .27 ($540), now .23 – down $80

    We have $52,685 of unrealized losses – way up from last week, mainly due to GMCR.  We’re not bullish enough on the overall markets to roll them yet but we can look ahead and see that we can roll them to 10 July $80 calls, now $6.60, where we’d be essentially rolling the loss, not the whole amount.  

    It’s a net balance of $31,493, down $2,100 for the week but we improved 8,000 units of FAS by $1 so let’s hope it’s money in the bank and not money down the toilet!  We have some aggressive moves above but, on the whole, there’s no position there I don’t think we can work with.

    Have a great weekend,

    - Phil

     

  13. Phil

    For $25KP, 20 USO June $39 puts at .80 – weekend hold.  

    Submitted on 2011/05/27 at 1:05 pm

    EDZ/Tusca – I think it’s good weekend protection, just like it was Monday with a quick win.  Now we have a reload and you are right, let’s call that 10 EDZ June $17 calls at $1.55 in the $25KP.  

    Submitted on 2011/05/31 at 9:48 am

    USO puts are somewhat safer but our June $39 puts fell to .50 and I like the DD here rather than the roll so 40 in the $25KP for an average of .65 and 1/2 back out at .65 with a goal of holding 20.  

  14. Phil

     Submitted on 2011/06/01 at 10:07 am

    I still like the SQQQ play from yesterday (outlined in the morning post) and I still like those USO June $39 puts, now .55 but that does not mean I still don’t think we should get 1/2 out even at .65 in the $25KP to get back to 20 puts.  

    Submitted on 2011/06/01 at 1:53 pm 


    FAS/$25KP, Scott – Damn, I was confused, forgot we were full covered!  Yes, let’s take the money and run on the weekly $26 calls, buying them back for .65 (up .10) and also buy back the weekly $27 calls for .20 (up .40) as that’s up .25 per long, which is enough mooney to roll them to the July $27 calls so let’s do that as well.  

    Submitted on 2011/06/01 at 2:19 pm

    FAS/$25KP, Daveo – Yes, we are putting in .45 ($3,600) but buying a month of additional sales – well worth it. 

    $25KP Adjustments:

    • All done with USO June $39 puts at .85.  
    • Done with XRT June $55 puts at $2.65. 
    • Selling 16 DIA $123 puts for $1.77

  15. Phil

    It looks like USO June $40 puts are the way to go now.  They are currently $1.19 and a move to $101 should drop them to $1.10 or less so I think the plan should be to buy 10 at $1.19 and another 10 at $1 in the $25KP if we are lucky enough to get a pop to short into.  Otherwise, it’s too dangerous a play ahead of inventories.   

    XLF June $15 puts hit only .21 on that dip – we are still looking to sell 10 for .50 in the $25KP and 20 for .50 in the Income Portfolio but that’s not going to happen so let’s see if we can get that for the July $15 puts, now .36.  


    FAS/$25KP, DC – Nope, we rolled back to July $27s so, if anything, I would take advantage of a sell-off to roll down the the July $26s first and THEN I would consider a sale but the roll is still over .35 so no point and we’re better of waiting until we are SURE things are breaking down.  Why is XLF down today?  Because Moody’s but BAC, C and WFC under review.  That doesn’t mean they will be downgraded, just that they need to be reviewed in light of new regs.  So, are they likely to go down 1% again tomorrow or likely to bounce back once this panic washes over the investors (traders, really) who act before they think based on squiggly lines on a chart because they haven’t done enough due diligence on their positions to have faith in the VALUE of the stocks they invest in?  

    Same as yesterday except we started at $101.50 so $98.50 is good for an exit on oil and that’s $1.70 on the USO June $40 puts and that’s a nice gain too so all done in the $25KP and the futures for now!  

    FAS/$25KP, Lol – May as well sell 40 (1/2 cover) TOMORROW $26 calls for .32 ($1,280).  

    Yes we will be rolling our FAS calls down to the July $26 calls for .35 or less in the $25KP.  We lucked out with our caller almost sure to expire worthless so let’s re-invest the cash.  

    Submitted on 2011/06/03 at 9:36 am

    In the $25KP, we want to roll all 80 FAS July $27 calls to the July $26 calls for .35 or less.  

    Taking gains/Terra – Of course, I thought that went without saying but yes – ALL short-term short positions should be cashed out unless they are needed for a hedge to protect your longs – that goes for the $25KP too!  We can always get new ones but you TAKE THE MONEY AND RUN – especially when the VIX bumps up to 18.50 and we’re testing the bottom of our range.  

    Well so much for 74.75 holding.  Oil $100.40 already on that move so now a good short at $100.50 and we’ll get them eventually!   Gives us another shot at the USO June $40 puts for $1.10 – 10 in the $25KP for a weekend hold unless we make .25 or better today, then we’ll just take it.  

    What a rockin’ pump job on oil  Hit $100.40 at the close and a nice chance to re-enter the USO June $40 puts at $1.15 with a DD at .85 for a weekend hold.  10 in the $25KP – AGAIN!  

  16. Phil

    $25,000 Portfolio – Month 4 (17 weeks) 

    Last week we left off $84,178 (net of closed transactions) in our virtual portfolio and we made closed the following:

    • 40 FAS May Weekly $26 calls, sold for .75, bought back at $1.10 – down $1,400
    • 40 FAS June Weekly $27 calls, sold for .60, bought back at .20  – up $1,600
    • 20 XRT June $51 puts sold for net .66, bought back at .60 – up $120
    • 6 POT Sept $60 calls at $3.15, sold for $3 – down $90
    • 20 USO June $39 puts at .65, sold for .85 – up $400
    • 20 XRT June $55 puts at net $2.53, sold for $2.65 – up $240
    • 10 USO June $40 puts at $1.19, sold for $1.70 – up $510
    • 40 FAS June Weekly $26 calls, sold for .32, bought back at .05  – up $1,080
    • 10 USO June $40 puts at $1.10, sold for $1.60 – up $500
    • 10 EDZ June $17 calls at $1.55, out at $1.55 – even
    • 10 USO June $40 puts at $1.10, sold for $1.35 – up $250

    It was oil week again this week with 4 trades on the same strike.  Hey, when something is working…

    We closed net $3,390 worth of positions this week (the FAS loss killed us!), running our realized gains up to $87,568 and our whole goal remains to close down the open positions, one by one with as little loss as possible.  Keep this in mind – if we can close our remaining positions without taking a loss (very doubtful), we end up with over $87,000!  

    The following are our remaining open (unrealized) positions:   

     

    • 80 FAS July $26 calls at net $5.46 ($43,680), now $1.35 – down $32,880  
    • 20 EGLE Sept $3 calls at net. 65 ($1,300), now .20 – down $900 
    • 20 EGLE Sept $2.50 calls at net .90 ($1,800), now .50 – down $800 
    • 20 EGLE June $2.50 calls sold for .30 (-$600), now .25 – up $100
    • 40 HOV Aug $2.50 calls at net .80 ($3,200), now .30 – down $2,000
    • 20 C July $46 calls at .66 ($1,320), now .05 – down $1,220
    • 20 GMCR July $70 puts at net $3.50 ($7,000), now $1.70 – down $3,600
    • 10 GMCR June $80 puts sold for $2 (-$2,000), now $2.90 – down $900
    • 16 DIA July $127 puts at $7.50 ($12,000) – now $6.50 – down $1,600
    • 16 DIA June $123 puts sold for $1.77 – now $2.60 – down $1,328
    • 4 CCL July $42 calls at $2.15 ($860), now .20 – down $780
    • 7 GMCR June $70 calls sold for net $3.85 (-2,695), now $9.70 – down $4,095
    • 4 AMZN July $215 calls at $5.25 ($2,100), now .66 – down $1,836
    • 20 SDS June $21/22 bull call spreads at .27 ($540), now .42 – up $300
    • 10 USO June $40 puts at $1.15 ($1,150), now $1.15 – even

    We have $51,539 of unrealized losses – a small improvement from last week (and hanging tough on GMCR was a big help!).  Fortunately, we also had our sales too so we’ve now got a net balance of $36,029, up $4,536 for the week AND we improved our 8,000 units of FAS all the way to the July $26s – a massive position improvement, even though they are still killing us…

    Our goal was to be at $50,000 by July (our first double) so we’re a little behind schedule but I’m still thinking we can hit our $100,000 goal by the year’s end if we catch a break.  Just FAS going up and GMCR going down would make a huge difference but, as we did this week – we can make our own luck while we wait.  

    Think of the FAS situation as if we bought a 1Br condo and we rented it out.  The condo lost money but we used the rent money to trade it in for a 2Br condo and rented that out.  That condo went down in value too so we took the rent money and upgraded to a 3Br condo and that too lost money but we rented it out for more money and we moved into a home which, of course, lost money.  At least we collected more rents on the home but this week we had to spend money on repairs – hoping to make it look really nice for the next renter.  

    It’s tedious but, if we keep at it, hopefully we’ll eventually end up with a mansion, right when the housing market turns around and our original little condo investment will be worth a lot of money!  Keep in mind we would be THRILLED to just get $2.50 back on FAS and those July $26 calls were $3 on the 31st.  Until then – we rent.

    Have a great weekend,

    - Phil

  17. Phil

     

    Will XLF hold $15?  This is tragic…Don’t forget our plan was to sell those July $15 puts at .50 – so we finally hit that for the $25KP (10) and the Income Portfolio (20).  

    By the way, in the $25KP, the July $27s are now .77 and the July $26s are $1.07 which is a .30 spread so DO NOT tell me there was no way to make that roll for .35 or less…  PATIENCE!!!  

    Submitted on 2011/06/06 at 10:53 am

    Oil fails $99 – Greed is good!  Tight stops in the $25KP at that $99 line now for the USO puts (now $1.45) so still $1.40 for the stop and a .10 trailing if we get past $1.50. 

    FUN TIME – Gotta play IWM to hold $80, right?  The June $79 calls are $2.07 and our goal would be to sell the June $80 calls for the same to make a free $1 spread and a tight stop at $1.95 means we risk .13 to make $1 so let’s go 10 in the $25KP.  

    Let’s also take the loss and buy back to 16 short DIA June $123 puts for $2.40 in the $25KP – so I’m pretty bearish!  

    Submitted on 2011/06/07 at 9:48 am

    Screw this, let’s sell 40 FAS this week $24 calls for .75 in the $25KP and roll our July $26 calls to the July $25 calls for .40 so it will cost us .05 x 80 ($400) to roll the whole set down $1.  

    Nice pop to $101 on oil already, that is, of course, a short with tight stops on the line.  Going to be a wild ride into inventories so best to stay away if you are not a super-nimble day trader.  Those USO July $38 puts are down to .85 and now you know why I favored them yesterday as this pop only cost them a dime.  NOW I like them for 10 in the $25KP too!  

    GMCR/$25KP – We have the following:  

     

    • 20 GMCR July $70 puts at net $3.50 ($7,000), now $2.05 – down $2,900
    • 10 GMCR June $80 puts sold for $2 (-$2,000), now $4.50 – down $2,500
    • 7 GMCR June $70 calls sold for net $3.85 (-2,695), now $6.90 – down $2,135

     

    The 10 June $80 puts can be rolled to 20 $75 puts (now $1.65) for net $1,100 and that puts them into 100% premium.  The 7 short June $70 calls can be rolled up to 14 short $75 calls at $3.10 for $490 and those would be about 50% premium and they CAN’T both finish in the money so it has a great chance of success in cutting down what we owe considerably.  

    Submitted on 2011/06/09 at 11:03 am

    Damn, money from HUD witheld from WFC, JPM, BAC…  In $25KP, let’s sell 40 FAS June $24 calls for .65 and put a stop on the weekly $24s we already sold at .30 (now .23

    FAS in the $25KP, looks like a home run on the weekly $24s (now .05 with a .10 stop) so let’s take out the Next week (June) $24 calls for .35 (up .25) and hold the July $25 calls naked over the weekend.  If things get worse, we’ll end up selling lower calls and rolling down yet again but hopefully we get a bounce at some point!  

    Oh, I did not mention it but, of course, let’s take money and run on oil if they come back over $99.25 now and .25 trailing stops from here on down (goes for $25KP too).  Congrats to all the shorts!  

    Submitted on 2011/06/10 at 12:21 pm

    DIA/Etrad – Actually, I think we should call it a day on the DIA puts in the $25KP – let’s sell all 16 July $127 puts at $7.80 as we’re glad to free up the cash now that we’re out about even and thinking this is a short-term bottom at least.  

    $25KP – let’s roll FAS July $25 calls to July $24 calls for .31 ($2,480). 

  18. Phil

    $25,000 Portfolio – Month 4 (18 weeks) 

    Last week we left off with $87,568 (net of closed transactions) in our virtual portfolio and we closed the following:

    • 10 USO June $40 puts at $1.15, out at $1.50 – up $350
    • 10 IWM June $79 calls at $2.07, out at $1.95 – down $120
    • 16 DIA June $123 puts sold for $1.77, out at $2.40 – down $1,008
    • 40 FAS weekly $24 calls  sold for .75, expired worthless, up $3,000
    • 10 USO July $38 puts at .85, out at $1.05 – up $200
    • 40 FAS June $24 calls sold for .65, out at .35 – up $1,200
    • 16 DIA July $127 puts at $7.50, out at $7.80 – up $480

    We closed net $4,102 worth of positions this week, running our realized gains up to $91,670 and our whole goal remains to close down the open positions, one by one with as little loss as possible.  Keep this in mind – if we can close our remaining positions without taking a loss (very doubtful), we end up with over $90,000!  

    I do realize it’s frustrating that we keep plowing our money back into the FAS calls, we spent $8,480 rolling the July calls from the $27s to the $24s in the past two weeks but keep in mind we also netted $8,280 in sales in the past two weeks and we still have 4 weeks of sales left so, if FAS ever stops going down – we might gain some ground and, if not – we can keep making even swaps like this until FAS is at $1 and CAN’T go down any farther.   Some day the madness will end (one would hope..).  

    The following are our remaining open (unrealized) positions:   

    • 80 FAS July $24 calls at net $6.17 ($49,360), now $1.32 – down $38,800  
    • 20 EGLE Sept $3 calls at net. 65 ($1,300), now .15 – down $1,000 
    • 20 EGLE Sept $2.50 calls at net .90 ($1,800), now .25 – down $1,300 
    • 20 EGLE June $2.50 calls sold for .30 (-$600), now .05 – up $400
    • 40 HOV Aug $2.50 calls at net .80 ($3,200), now .10 – down $2,800
    • 20 C July $46 calls at .66 ($1,320), now .05 – down $1,220
    • 20 GMCR July $70 puts at net $3.50 ($7,000), now $2.35 – down $2,200
    • 20 GMCR June $75 puts sold for net .45  (-$900), now $2.22 – down $2,640
    • 4 CCL July $42 calls at $2.15 ($860), now .20 – down $780
    • 14 GMCR June $75 calls sold for net .805 (-2,205), now $1.27 – down $427
    • 4 AMZN July $215 calls at $5.25 ($2,100), now .35 – down $1,960
    • 20 SDS June $21/22 bull call spreads at .27 ($540), now .78 – up $1,080

    We have $51,674 of unrealized losses – about the same as last week and that’s a HUGE victory because we managed to close out $4,102 of winners.  That brings our net up to a nice $39,996 so we’re about at the point where we can go back to cash and rebuild if we don’t get the bounce we want next week (as we flipped bullish by taking off our DIA puts and leaving FAS naked).  

    The whole key to hitting our first half goal of $50K by July now rests on those FAS calls.  We have worked and worked and worked to get ourselves into a position where we have 8,000 FAS July $24 options that were worth $4 10 days ago.  Obviously, we would be TRILLED to take a $2.17 loss ($17,360) and close them out.

    If not, we certainly hope to squeeze another $12,000 in sales out of them anyway, hopefully before we are forced to put more money into another roll!  

    Have a great weekend,

    - Phil 

  19. Phil

    USO July $39 calls at $1.10 – 10 in the $25KP.

    Out of SDS June $21/22 bull call spread at .81 in $25KP.  

    Quiet this morning – everyone must be selling Dow puts!  

    Looking good so far with oil on the way to our $98.50 target.  After that – I do not know what it will do.  Of course we have to get through $98 first and that’s about $38.65 on USO.  Those July $39 calls are slow movers at $1.20 but I guess we should now set a stop out even at $1.10 – just in case we don’t make it over the line – that goes for the $25KP.  

    Also in the $25KP, those FAS calls shot up to .85 but that’s a lot since FAS is at $24.50 so we’ll sit tight for now and see what we have to roll to on Thursday.  

    Submitted on 2011/06/14 at 1:03 pm


    USO/Yodi – Those things are a rip-off is my thoughts.  USO is up .75 today and the July $39s are only $1.35 (up .25).  With the Dollar so low it’s a big risk holding these overnight but it’s only 10 in the $25KP so I’m inclined to go for it unless we do stop out and $1.25 would suck but that is a good stop.  

    MS/ZZ – Everyone arbing the new regulations.  Notice I am staying away from specific financials EXCEPT: 

    $25KP – Let’s take the money and run on the USO July $39s at $1.35 – looking too weak at $99 ($39 USO).  Certainly we can just go back in later.  

    $25KP – Let’s buy back the FAS June $24 callers for .33.

    Submitted on 2011/06/15 at 11:12 am 


    FAS/$25KP, Asaenz – Yes, good idea.  We should drop the buyback stop to .25 with a nickel trailing but out by the day’s end anyway.  


    Wow, those oil guys are good, aren’t they?  Almost $100 already…  Oil topped out at $99.95 and the USO $39 puts bottomed out at .28 (so far).  So that’s 2x at .40 avg and don’t forget the idea is to stop out 1/2 at .40 to get back to 1x at the lower basis (if possible).  

    Based on the 167K left on the NYMEX and the 460M in the next three months (where they have to roll), I’d say they have to dump about 25Mbd for the next 5 days out of July so there should still be a sell-off to come and now I like 10 USO July $38 puts at .80 in the $25KP.  

    Taking $1 and running on July $38 puts in $25KP.  25% in an hour is good money, even if it is "only" $200….

    If you don’t learn to take profits, you’re not likely to have many winners!   

    FAS/$25KP, Asaenz – Yes, now the stop should be .20 but we are out at the end of the day as it’s not worth an overnight risk.  

    Dollar touching 76 here so USO FRIDAY $38 calls at .60 are now interesting, 10 in the $25KP.

    FAS/Savi – $25KP currently has 80 FAS July $24s (now $1.02) 1/2 covered with the June $24s, now .14 with a stop at .19 and out at the end of the day no matter what.  

    Wow, this oil plunge is insane.  Down almost $4 in one day and one massive continuous swing from that BS move up before.  This has got to be putting some funds belly up!  

    USO Friday $38s are down to .34 so let’s bite the bullet and DD in the $25KP, just another $340 tossed in to see if we get lucky tomorrow.  

    USO/$25KP, Asaenz – Well we have 20 $38 calls at net .47 and they are are now at .25 so down $440 and the Delta is .35 and USO is down $1.55 for the day at $37.56 so we need .22 which is about a .66 move so a 1/3 recovery of about $1 back to $96.50 maybe in oil or USO $38.20.  Tomorrow, we will lose 1/2 the premium and the delat will likely drop and we’ll need more like $38.35 to get .47 back and the next day, we’ll need $38.42.  So, you can quit now and take a $440 loss or figure that USO fell $1.55  today to $37.60 and might get 1/2 back tomorrow and get you even.  

    No point to not buying back the FAS June $24 calls at .14 in the $25KP now as they are not likely to go below .10 and they may go higher on us.  

     

  20. Phil

    Submitted on 2011/06/17 at 10:04 am

    Wow, leading indicators UP 0.8% from down 0.4% – that’s very surprising!  That should pop the Dow over 12,050 so we’ll see what kind of legs it has but then the Dollar over 75.50 again should put the brakes on it and then the DIA TODAY $121 puts at .75 become interesting (with the Dollar over 75.50).  Let’s call that 10 in the $25KP with a stop at .60.  

    Submitted on 2011/06/17 at 10:58 am

    FAS/$25KP, DC – At this point we should really sell 40 Next Week $24 calls for .70 ($2,800) as it would be dumb to blow the opportunity.  Stop on 1/2 at .85.

    Oh no!  I forgot about the $25KP play from this morning ($121 puts at .75).  Those are $1.30 now and I REALLY hope, after hitting $1.45 earlier, that nobody is still in them at $1.30 but, if you are – DON’T FORGET TO GET OUT!!!  

    Submitted on 2011/06/21 at 9:47 am

    RIMM weekly $25 calls at $1.90 – 10 in the $25KP

    $25KP, Trying to decide if we are being greedy on RIMM but I think at least we should see if we get to $25.50.  $25 calls now $2.45 so up nicely and a stop at $2.30 locks in a 20% gain on the day ($400) so let’s do that but, hopefully, we won’t need them and we’ll set a .25 trailing stop at $27.75.  

    Giving RIMM one more chance to beat $27.50 then we kill it at $2.50 or better in the $25KP.  Right now (11.05). 

    Submitted on 2011/06/21 at 12:52 pm

    UUP July $21 calls at .43 were .74 last week.  10 in the $25KP and we’ll DD if they go lower.

    Wow, that $15 line on XLF is like a magnet!  

    Don’t forget that today should be the last day for the July NYMEX contracts.  Most likely the move heads up from here so we have the 15 USO Oct $40 calls at $1.85 ($2,775) covered with 20 July $38 calls at $1.06 ($2,120) in the $25KP and the Oct $40s are still $1.50 ($2,250) and the July $38s are .65 ($1,300) for a net $295 profit but let’s take a chance on a bounce tomorrow and take out the July $38 calls at .65, which leaves us in the Oct $40 calls for net $1,955 ($1.30) and we’ll stop out even if they head down on us.  

    Submitted on 2011/06/22 at 10:44 am


    FAS/$25KP, Lapper – Our plan was to stop out 20 of the calls at .85 so now we have just 20 short weekly $24 calls and I see no reason to take those off.  I think the pricing is silly as it was nowhere near this high yesterday when XLF was higher ($15.12) but what can you do?  I suppose there’s anticipation of a Fed rally but I’m very concerned that’s misplaced.  

    In $25KP, let’s sell 20 FAS weekly $25 calls for .27 ($540).  That leaves us covered with 20 $25 calls and 20 $24 calls against 80 July $24 calls.  

    Submitted on 2011/06/22 at 1:59 pm

    In $25KP, let’s sell 20 FAS weekly $25 calls for .27 ($540).  That leaves us covered with 20 $25 calls and 20 $24 calls against 80 July $24 calls.  

  21. Phil

     Submitted on 2011/06/22 at 1:59 pm

    $25KP Let’s kill the USO Oct $40 calls at $1.70 – done with that trade.

    Submitted on 2011/06/23 at 9:59 am

    QLD is an ultra-long on the Nasdaq and I like the July $77/81 bull call spread for $2.40 on the $4 spread, you can stop out at $2 so risking .40 to make $2.60 is a nice way to go.  Let’s do 10 of those in the $25KP but if the Nas fails to hold 2,625, keep your finger on that sell trigger!

    We HAVE to take advantage of this to buy back FAS weekly calls.  In the FAS Money trade, we sold the $23 calls, now .35, in the $25KP, we sold the $23 and $24 calls but we can leave the $24 calls (now .09) and just take out the 20 $23 calls.  Also in the $25KP – I know you guys hate this but now is the time to spend $1.25 and roll to the Aug $23s.  

    Here’s a trick on that, you can buy the Aug $23s (if you have the cash) for $2.15 and set a stop on the July $24s (now .92) if XLF fails to hold $14.75 (probably .89) – hopefully we can sell them for more than $1, remind me to watch it later.   

    $25KP – holding the July calls, buying 100 FAZ tomorrow $50/51 bull call spreads at .55, stop at .40 (risk $1,500) that are in the money with FAZ at $51 now

    Submitted on 2011/06/23 at 10:51 am

    BXP finally getting weak, July $100 puts just $1.45 are a nice bearish play with a stop at $1.20 – 10 in the $25KP.

    Let’s kill the FAZ cover in $25KP – I don’t feel good about it.  Hopefully can get .50 back.  

  22. Phil

    $25,000 Portfolio – Week 20 

    Last update we left off with $91,670 (net of closed transactions) in our virtual portfolio and we closed the following:

    • 20 SDS June $21/22 bull call spreads at .27, out at .81 – up $1,080
    • 14 GMCR June $75 calls sold for net .805 (-2,205), out at $1.80 – down $1,393
    • 10 USO July $39 calls at $1.10, out at $1.35 – up $250 
    • 40 FAS June $24 calls, sold for .85, out at .14 – up $2,840
    • 10 USO July $38 puts at .80, out at $1 – up $200
    • 30 USO June $38 calls at .39, expired worthless – down $1,170
    • 20 GMCR June $75 puts sold for net .45, expired worthless – up $900
    • 15 USO Oct $40 calls at $1.85, out at $1.70 – down $225
    • 20 USO July $38 calls sold for $1.06, out at .65 – up $820 
    • 10 DIA June $121 puts at .75, out at $1.30 – up $550
    • 20 FAS June 24th $24 calls at .70, out at .85 – down $300
    • 10 RIMM June 24th $25 calls at $1.90, out at $2.50 – up $600
    • 10 UUP July $21 calls at .43, out at .63 – up $200
    • 100 FAZ July $50/51 bull call spread at .55, out at .48 – down $700
    • 10 BXP July $100 puts at $1.45, out at $1.20 – down $250

    Wow – busy, busy!  We closed net $3,402 worth of positions this week, running our realized gains up to $95,072 and our goal remains to close down the open positions, one by one with as little loss as possible.    

    We spent about $10,000 improving our FAS position to August $23 – hopefully not a crazy investment but, if we are going to finally get a payoff – it should come next week as they pump us up into the end of the quarter.  We’re essentially naked and I hope tomorrow’s action gives us good reason to stay that way over the weekend.     

    The following are our remaining open (unrealized) positions:   

    • 80 FAS August $23 calls at net $7.24 ($57,920), now $2.35 – down $39,120
    • 20 EGLE Sept $3 calls at net. 65 ($1,300), now .10 – down $1,100 
    • 20 EGLE Sept $2.50 calls at net .90 ($1,800), now .25 – down $1,300 
    • 20 EGLE June $2.50 calls sold for .30 (-$600), now .05 – up $400
    • 40 HOV Aug $2.50 calls at net .80 ($3,200), now .10 – down $2,800
    • 20 C July $46 calls at .66 ($1,320), now .05 – down $1,220
    • 20 GMCR July $70 puts at net $3.50 ($7,000), now .30 – down $6,400
    • 4 CCL July $42 calls at $2.15 ($860), now .05 – down $840
    • 4 AMZN July $215 calls at $5.25 ($2,100), now .35 – down $1,960
    • 20 FAS June 24th $25 calls sold for .27 ($540), now .02 – up $500 
    • 20 FAS June 24th $24 calls at .70 ($1,400), now .13 – up $1,140
    • 10 QLD July $77/81 bull call spread at $2.40, now $3 – up $600 

    We have $49,100 of unrealized losses – that’s down $2,500 from last time and that’s great because we upped our net cash considerably and that brings our net up to a nice $45,972 so we’re right back on schedule as long as we don’t get a nasty surprise on our FAS play.    

    The whole key to hitting our first half goal of $50K by July now rests on those FAS calls.  We have worked and worked and worked to get ourselves into a position where we have 8,000 FAS August $23 options that were worth $3.20 last week.  We just need to make $5,000 more and we can get back to cash and focus on our goal of doubling up $50,000 to hit our $100,000 goal for the 2nd half of 2011!  

    Have a great weekend,

    - Phil  

  23. Phil

    Submitted on 2011/06/23 at 1:32 pm
    Let’s sell those UUP July $21 calls in the $25KP at .63 before we blow a nice gain.   

    Submitted on 2011/06/24 at 9:35 am

    Unfortunately, we’d better cover FAS in the $25KP and FAS Money with the next week $23 calls, now .95 – selling 40 in the $25KP and all 10 in the FAS Money.  Also, we can roll the short FAS weekly $24 puts, now .80, to the next weekly $24 puts at $1.20, so picking up another $1.35 for the week.  

    Submitted on 2011/06/24 at 10:16 am

    FAS Next week $23 calls already fell to .70 so ALL OUT in the $25KP AND the FAS Money if you don’t mind day trading.  If XLF can’t hold $14.75 we can sell something else but making 20% in an hour is good!  

    Submitted on 2011/06/24 at 11:42 am

    I still like those QQQ today $55s at .04.  If the Nas goes back to flat today, those calls should be about .30 so I like buying $400 worth in the $25KP (100 contracts) with half out at .08.  

    Submitted on 2011/06/24 at 2:52 pm
    FAS/Yodi – In the $25KP, yes, we can risk waiting.   In the FAS Money trade, it’s a poor practice.  But I still want to wait until the close to cover.  The $24 calls are .28 and we sold the $24 puts for $1.20 (now $1.50) but we already pocketed a quarter profit on the morning call sale so no biggie if we sell the $24 calls for another .28 but I STILL THINK WE GO HIGHER.  

    Submitted on 2011/06/24 at 3:53 pm  

    FAS/Palotay – Yes, we have to sell FAS Money covers and it’s going to have to be the next week $24 calls for .28.  In the $25KP, I’d rather give it the weekend as 40x .28 is only $1K anyway.  

  24. Phil

    Wow, 75.80 on the Dollar and oil back over $91.  Gold still $1,499 for you /YG players.  IWM bull call spread and QLD spread looking very exciting and NO, I do not want to cover FAS in the $25KP!  

    FAS Money/StJ – If XLF breaks $15, an aggressive trader would want to kill 1/2 of the short $24 calls and I guess the $23 calls too (if you didn’t listen to me and sold those).  

    FAS/$25KP, Lol – I don’t remember calling a cover on $25KP and, if I did, I was wrong and we should be naked.  We covered in FAS Money (officially with the $24 calls) because it’s meant to be conservative(ish) and it wasn’t worth taking a chance.  Actually, it was worth it but it was bad practice as it was 50/50 and I was going with my gut, which is not something you can teach so the proper move is to sell your premium, not play hero.   In the $25KP, the whole point is to take risks (you don’t make 300% in a year playing it safe) so it’s an entirely different situation.   

    FAS/Yodi – As I said above, If we sold $24 calls, we should buy them back (now .35) but I could have sworn I said they were not worth selling in the $25KP to generate just $1,200 or whatever it was.  

    FAS/Yodi – We’re naked in the $25KP (80 Aug $23 calls) and we sold the $24 puts and calls in the FAS Money trade after profiting .30 on a previous sale that we cashed the same day so we sold almost net $2 this week at the $24 line so I wish we had done the same in the $25KP but we couldn’t sell 80 puts, could we? 

    Watch that Dollar – if they can press it back under 75.55, then oil pops $92 and the Dow pops 12,100 in the futures (12,170) and the S&P makes 1,290 in the futuers (1,295) and we’re off to the races again.  NYSE still not over 8,1120 and that is a MUST or they drag us down.  

    FAS/Ross – I’d cash out if we’re over $3.  We’ll see this week but if we’re over $50K, that’s first half goal in the $25KP and I’m going to be inclined to cash out over the weekend.  


    FAS/$25KP, DC – The Aug $23s are $2.90 at the moment and I think we may get a pop this afternoon (and into Friday for that matter).  If we get ugly, then I may reconsider but I want to be in a position to cash out on a run-up so I don’t want to mess around with a short call.  I mean, have a little perspective – FAS is up almost $1 from yesterday morning – if it drops back a bit – so what?  Pull your chart back from the 1-minute view and we’re still on a very nice upward path.  What was the Big News today – Greece is fixed.  Who does that directly benefit?   The banks and insurance companies like AFL, who panicked out of EU debt last week and spooked the XLF lower.  Now that seems silly so maybe our entire drop from $25 was silly and now we’ll head back over.  $26.50 is the declining 50 dma and that would be a great spot to sell if we get that kind of move.  

    FAS/Yodi – I’m talking about the $25KP, where we have 80 Aug $23 calls.  I intend to cash that Portfolio out this week and start with a fresh $50,000 in July.  On the FAS Money trade, we have long puts and calls and we sell weekly puts and calls for income.  It doesn’t matter on that one which way FAS goes as long as we collect our premium.  My trade was to short the $24 puts and calls – I have nothing to do with $23s and I said over and over last week I thought they were a bad idea and, if that didn’t get the message across, maybe our naked stance in the $25KP might have been a hint or perhaps my saying on Monday that it was a mistake to have FAS covered.   So, what do you have and what is your basis and tomorrow, hopefully, there will be a roll where you can fix it.  

    $25KP/JC – No, we’re at goal and I said it in the last update.  If I can get us to $50K cash, that’s mission accomplished for the first half and we can start fresh in Q2 going for another double in the 2nd half – hopefully without all the drama of the FAS play.  That will give more small players a chance to play along as we’ll try to stick to a series of targeted trades.  

    I think USO is about done here ($37.50) and we can use that line to stop out the Friday $38 puts at .75 – 20 in the $25KP with a stop at .60.  

    Also in the $25KP, I’d rather take the money and run on all 80 Aug $23 FAS calls at $3.20 ($25,600).

    .95 on the USO $38 puts in $25KP – DO NOT come whining to me if you blow it!  If you sell 1/2 here and set a .85 stop on the rest, you lock in a .15 gain so that’s the play (sell 10 at .95, stop on 10 at .85).  

    Fed just gave banks a huge break with higher than expected swipe fee caps at .21!   Great for V, MA, COF.  COF slowest mover, July $52.50 calls at .95, 10 in $25KP

    COF ran into some real hardcore selling at the $52 line so let’s put a stop on them at .85 and try to take $1.20 off the table in the $25KP.  

      


    V now up 15.5%, MA up 10%, COF limping along – let’s take $1.05 and be happy in $25KP. 

    Welcome back Troy!  As we expect a downturn, we don’t have any current Buy List but there is an Income Portfolio under the Portfolio Tab and we’ll be starting the $25KP with a fresh $50K of cash next week so that should be fun into earnings.  

    Now it’s the first day of the month and USUALLY we get a nice inflow of fund money.  If we don’t get it – I can’t see what’s going to support the market.  Perhaps they are waiting on the June ISM numbers but we have no reason to think they’ll be good (below 50 is contraction, 52 expected) and, if we do get contraction, oil will fall off a cliff.   

    I’m sending this out now to make sure BEARISH is clear – let’s kill our long positions in the $25KP as well as the Income Portfolio (the short puts) and get cashy and safe(ish) over the weekend.  I still love our disaster hedges and they are about the same price as yesterday but hold off on selling offsets if you can as you’re likely to get a better price for short puts if you wait.  

    Submitted on 2011/07/01 at 10:38 am

    FAS TODAY $27 puts at .60 have just .05 premium, stop at .50 – 20 in $25KP.

  25. arbolito

    Hi Phil: I’ve been gone for a long time, but I m back. I have been trying to follow the 25k portfolio and my congrats to you, also I’ve loved your political comments and insights. Now that you have finished the 1st semester, wil you come out with all new positions on the 25K (now 50K) or is it intelligent to try to get into the still open 25k positions below your cost?

  26. arbolito

    Just read your last comment. Start with a fresh cash start next week. I’llwait fot that one thanks.

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