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White Christmas Portfolio – Month 2

What a first month we had!  

Oddly enough, when I was last on BNN (I’ll be on again this afternoon), we were just about to start our newest virtual portfolio after closing down this year’s virtual $25,000 Portfolio early as we were way past goal, over $130,000 on the 20th (up 420%).  As that portfolio went so well, we decided to play a "White Christmas Portfolio" – as I explained on TV on Oct 24th, which aimed to practice making the same kind of small, aggressive trades, with the aim of turning $15,000 on October 24th into $25,000 by Christmas (66%).

In fact, I gave out our first trade idea, GNW, which was $6.30 during my BNN interview, now $6.47 (up 3%).  We discussed the Jan $5/7.50 bull call spread for $1.10, which is now $1.40 and that’s up 27% but, more importantly, your gain playing the option INSTEAD of the stock is .30, vs .17 – that’s almost 100% better gain with NO MORE RISK than buying the stock while requiring less than 20% of the cash commitment (and no margin on just the bullish spread).  

Of course, our actual WCP trade idea had another component deemed too confusing for TV – we also sold the short Dec $6 puts for .85 as an offset, which lowered the cash cost of the trade to .35 and those puts are now .20, up another .65 on their own and the net of the entire trade has gone from .35 to $1.20, which is a 242% gain on net.  Of course, none of that matters – what matters is that you put a net of $350 into the trade (10 contracts) plus about $600 in margin on the short puts on October 24th and you can cash that trade out today (we elected to cover it on Friday) for $1,200 and that is clearly 242% more cash than you started with on October 24th – the margin requirement is gone, but the cash remains!  

With that kind of success on our first trade, it’s not too surprising that the whole portfolio has been doing well.  We left off last Wednesday with a balance of $35,540 – far better than we expected to do, obviously, in our first month (up 137%) so we decided it was prudent to get back to cash as we were "too bullish".  

stock photo : Risk Analysis Concept Word Cloud as BackgroundFortunately, fate intervened as that was my 2am comment and, by the time the market opened at 9:30 – fate intervened and Europe was "fixed" again and the market gapped up about 2.5% at the open and my comment to Members was:  

By the way, for WCP players – Despite the fact that I regretted not taking money and running yesterday on bull side, now that we have jumped 3%, I don’t feel the same way as we can now reverse all of today’s gains and still be fine so I’m more inclined to ride out the week than I was before all this nonsense started – it’s a buffer we did not expect and, since we’re playing with double bonus money – I think it’s worth a little risk.  

We did follow through with that plan (see comment section at the end of prior post for each portfolio move) and cashed our our ridiculously successful bull side on Friday, leaving ourselves bearish over the weekend – just in case we had a huge drop, but with plenty of cash on the sidelines – just in case we didn’t!  

We closed the following positions on Friday:  

  • 12 DXD Dec $17 calls, sold for net $1.35, out at .25 – up $1,320
  • 5 TNA Dec $35/40 bull call spreads at $2.25, out at $4 – up $875
  • 10 TLT Dec 2nd $121/119 bear put spreads at .75, expired at $2 – up $1,250
  • 10 FAS 12/2 $51/52 bull call spreads at .60, expired at $1 – up $400
  • 20 DIA Dec $116 puts at $1.14 – out at $1, down $280
Going 4 for 5 in a week is always a good thing!  That adds a virtual $3,565 to our cash pile, bringing our realized gains up to $35,325.  Of course it don’t mean a thing if our unrealized positions are losers but we added 2 bullish bets, on DIA and GLL to protect our very bullish FAS position that has too much premium to close as well as what we hope will be a slam dunk on our GNW position.   
 
Our remaining open positions are:
  • 10 GNW Jan $5 calls at net $1.34 ($1,340), now $1.70 – up $360
  • 10 GNW Dec $6 puts sold for .85 (-$850), now .20 – up $650
  • 10 GNW Jan $6 calls sold for $1.15 ($1,150), now .95 – up $200
  • 5 SCO Dec $37 puts sold for net $1.90 (-$1,900), now $1.60 – up $150
  • 5 FAS Dec $48/55 bull call spread at $3 ($1,500), now $5.80 – up $1,400 
  • 5 FAS Dec $40 puts sold for $2.40 (-$1,200), now .35 – up $1,025
  • 10 GLL Dec $16 calls at .65 ($650), now .70 – up $50
  • 10 TZA Dec $33 calls at $1 ($1,000), now $1.15 – up $150

Wow, 8 for 8 on open positions 2 weeks in a row!  That’s pretty amazing as we’re purposely betting in opposite directions to hedge our portfolio…  Still, it won’t last as the market is making a big move this morning and that will ding the bear bets but our FAS spread is good for another $775 if it expires in the money (FAS is now $62.82 and we’re very confident in the financials with all the free money being given to them) while the GNW spread (also a financial) can yield another $660 if that stock just holds $6 through January expirations.

For now, our open positions have unrealized gains of $3,950 for a net total of $39,310 – not at all bad for week 5 (up 162%).  We don’t have a goal anymore, other than not blowing it between now and Christmas!  Please don’t forget, if following this bonus portfolio has been good to you this holiday season – please take a moment to do something good for someone else:

Reach more New Yorkers with a matching gift!

Thanks!  We’ll be looking to add bullish bets as we already have good downside protection from SCO and TZA – gold will hopefully calm down regardless of the market move up.  I’m sure by the afternoon, I’ll have a new trade idea for the good folks at BNN and I have promised not to call for any more public beheadings this week (but no promises as we move into the end of the year and I make my 2012 Market Forecasts).  
 
Have yourself a merry little Christmas, 
 
- Phil
 
 

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  1. Phil

    Submitted on 2011/12/05 at 10:01 am

    In the WCP, I’m worried about the SCO $37 puts, which are back to $1.90 and I would sell the $36 puts ($1.35) and roll the $37 puts to the Jan $38 puts ($4.50) for $2.60 for net $1.25 but we’re not keeping the portfolio that long so more likely we’ll kill it if oil pops $102.50.  

    FAS is in fine shape but, as $6.50, there’s no point in keeping the Dec $48/55 bull call spread open so let’s get out there.  Same goes for the short $40 puts at .20 or less.  

    10 TZA Dec $33 calls (.75) can be rolled down to the $31 calls for .25 in the WCP as well.  Probably our last bearish play before we start taking bull bets over Dow 12,170 (if it holds).  

     

    Submitted on 2011/12/06 at 9:43 am

    Oil (/CL) coming back to $101 and we only want to short there (again).  Gold bottomed out at $1,715, now $1,720 and that’s goaaaaaaaaaaaaal on our GLL Dec $16s at $1.05 (up 60%) and we’re done in the WCP!  

    I don’t see us breaking over today, or this week for that matter, without more stimulus.  I do think we get the stimulus and then I think we rally hard into XMas but, maybe next week they trash the market to sell TBills so CASHY AND CAUTIOUS remains the plan!  

    Submitted on 2011/12/07 at 10:16 am

    Oil is still my favorite short next to EDZ and we can play a bad inventory report (10:30) with the weekly $38 puts at .15 – 20 in the WCP for a fun $300 play.  Of course, shorting the futures (/CL) below the $101 line (there now) is always a good play. 

     

    Submitted on 2011/12/07 at 10:32 am

    Oh, down goes Russell, down goes Russell!!!   If it doesn’t stick, we’ll have to ditch the TZA Dec $31 calls in the WCP, now a nice $1.35 (up 35%) so let’s call it a stop at $1.25 and a .15 trail above as we’re just glad to get out better than even at this point.  

    Submitted on 2011/12/07 at 10:42 am

    Oil flew down to $99.84 in a massive drop!  Yeeeeeee-haw!  $38 puts at .28 already.  This is very bad sign for the overall markets and now it makes sense to pick up some DIA Dec $117 puts at .90 in case we start cascading out of control.  Let’s cash the USO puts in the WCP (up $260) and risk that with a stop at .75 on 10 of the DIA puts.  

    Europe is closing at the lows – down about 1.25% and at day’s lows – not sure why we’re holding up so far but we are so best to take a quick nickel loss on the DIA puts in the WCP (sorry) and wait for a better entry.  

    Dollar back down to 78.57 so we’re "safe" for the moment above our lines although we should consider that the dollar fell and the markets did not improve – they simply stopped falling so, on the whole, they are still very weak.  

    So, game on for Dec $31 calls, now .97 – 5 in the WCP with the intent to DD if it goes the other way on us so this is a keeper (unless there is some seriously good news).  

    Submitted on 2011/12/07 at 3:34 pm

    Speaking of which, those TZA $31s in the WCP are still .88,  too soon to DD but I’d like to roll to the $29s for .40 if possible (now .44). 

    Also, in case those don’t work, 10 FAS next week $66/67 bull call spreads at .60 ($600) will make $400 if FAS just holds $68 (now $68.10).

     

     

     

     

  2. Phil

    Good morning! 

    Dollar up huge on ECB money-printing as well as fears that it isn’t enough.  Could all be "fixed" again tomorrow so we’ll have to see.  

    TZA $29 calls popped to $1.70, so a winner there in the WCP and we’re done.   

    XLF TOMORROW $12 calls at $1.02 – 20 in WCP with a stop at .90.  

    Submitted on 2011/12/08 at 1:06 pm

    And there goes the Dollar – have to give up now and just see where things settle – out of WCP longs too!  

    Oh NOW we start going up.  XLF still good in WCP (20 $12 calls still .93) but I’d rather stay cashy otherwise. 

    WCP:  10 TNA Dec $41/43 bull call spread at $1.10, selling 5 JPM $32 puts for .90 for net .65 on the spreads.

    WCP:  20 XLF next week (Dec) $13 calls for .28

    WCP Open Items Update

    • 10 GNW Jan $5 calls at net $1.34 ($1,340)
    • 10 GNW Dec $6 puts sold for .85 (-$850)
    • 10 GNW Jan $6 calls sold for $1.15 ($1,150)
    • 5 SCO Dec $37 puts sold for net $1.90 (-$1,900)
    • 10 FAS Dec $66/67 bull call spreads at .60 ($600) 
    • 20 XLF 12/9 $12 calls at $1.02 ($1,020) 

    GNW is at $6.50 so good enough to keep. SCO should expire worthless but a stop at $1 (now .50) is prudent.  FAS is iffy but no biggie and we can risk it next week so our big gamble is just the XLFs for tomorrow but let’s take $1.12 or better and run EOD if it’s there.  

    WCP – Oops, and the TNA and XLF plays above! 

    Submitted on 2011/12/08 at 3:48 pm

    XLF/WCP, Mr M – Actually I called an audible to keep those (now .88) – I just REALLY feel we get a strong move up tomorrow.  

    Submitted on 2011/12/09 at 10:04 am

    Good morning!  

    Nice play again off the Dow (/YM) futures at 12,000 but, as you can tell from the above post, I’m a bit skeptical.

    When in doubt, sell half and, in this case, I want to get back to more cash by the day’s end in the White Christmas Portfolio as the WCP is too bullish and I’m just not in the mood to risk it so we’re not going to be too brave if the "rally" stops or even slows down:  

    So we are thrilled to stop out of the XLF $12 calls, now $1.05,  GNW can stay, SCO will expire worthless (most likely), I want to sell the FAS Dec $66 calls now ($3.40) and leave the $67 calls open and cover them with a Jan $67/72 bull call spread at $2 (cover first, stop out later) – so we’re taking at least net $1.35 off the table, which is more than we could have gained on the spread – and covering the possibility of a move up with the longer spread. 

    The TNA Dec $41/43 spread with the short JPM puts I like for a bullish hold over the weekend and we can keep the XLF Dec $13 calls as that was a fun bet (now .32) but if they hit .40 or better – we’ll take 1/2 and run into the weekend.

    That leaves us a bit bullish and we’ll pick up a leveraged bear play later – just something fun for if the market collapses into the TBill auctions on Tuesday and Wednesday (although we may also get QE3 on Tuesday’s Fed meeting).  If I were the Fed, I’d extend the meeting a day to panic the markets, get all the notes sold (30-year auction is Wednesday at 1pm) and THEN announce QE3 and rip the bears’ faces off again.  

    We’re probably OK as long as the Dollar is below 78.80 (now 78.75) so we’ll watch that closely but without taking 735 back on the RUT (now 725) any move is meaningless.  

    Submitted on 2011/12/09 at 1:13 pm

    So far, I’m perfectly happy with our exits.  Dow has been the outperformer this week by a point so RUT is playing catch-up today (up 2.4%) but I think the Dow is the best short for a Black Monday.  DXD Jan $15 calls are $1.25 and the FCX Jan $33.25 puts can be sold for $1.15 for net .10 on the the long play.  TOS is showing me $3,300 in margin on the sale of 10 so I like this spread (10 and 10) for the WCP as nice weekend protection.  If all goes well, we have a good expectation of getting out with a very small loss and, if all goes badly, DXD was $18.50 3 weeks ago!  

    Submitted on 2011/12/09 at 2:05 pm

    FCX/WCP, Kallen – I’m not getting an error but it won’t fill either.  FCX Feb $33 puts are trading at $1.25 so let’s call that an official switch as the new offset to the DXD calls.  

     

    XLF/WCP, Crussell – Yep, taking a flyer that Asia and Europe love the solution next week.  They topped out at .37 and I would have loved to have been able to get out but it just wasn’t meant to be.  

    Submitted on 2011/12/12 at 10:50 am

    Time to play the bounce with Dow testing 12,000 for the brave!  Dow futures (/YM) are 11,944 and over 11,950 is a good line to play with tight stops.  DIA $121 calls at .92 were double that on Friday so 10 of those in the WCP with the intention to DD (probably) if we test 50 points lower but then sell other calls and roll back if we fail to hold 11,950 on the regular Dow (11,900 in futures).  

    Submitted on 2011/12/12 at 11:25 am

    XLF/WCP, Crussell – Well, as I said on Friday, it would have been great to get out then.  Now .12, down from .28 with XLF at $12.76 I think little harm can be done waiting for the Fed tomorrow.  If they go down to .05, I’d DD ahead of the Fed as .05 doesn’t matter much but we dropped .35 in a day so we can certainly gain .70 in 2 different days and get back to our goal.  

    FAS Dec $60/61 bull call spread at .55, 10 in the WCP. 

    Submitted on 2011/12/12 at 12:11 pm

    Speaking of lucky, the DIA $121 puts are now .68 so we double down here to have 20 at net .80 and we’ll have to make a new decision if they fail to hold .50 but, otherwise, we can live with the $600 loss in the WCP. 

     

  3. Phil

    Submitted on 2011/12/12 at 3:16 pm
    WCP moves:  

    GNW solid at $6.39
    SCO just have to hope for collaspe
    FAS $67 short calls just .70 which is BRILLIANT since we pulled the $66 calls at $3.40 off the .60 spread!  Since XLF can pop 10% and send FAS to $78, let’s buy those calls back and be done with that spread.  We do have the Jan $67/72 bull call spread that we left to cover them but let’s wait on the Fed before we give up on Financials as that spread is bonus profit anyway.  
    New FAS (Dec $60/61) is fine, of course.  
    TNA holding up so far and JPM is fine.  
    DXD Jan $15 calls are $1.50 but we need the balance so we keep them.  Offsetting FCX puts down but not out. 

    DIA $121 calls still .65 but we have 20 so that’s what I’m most nervous about but let’s see if we get a pop into the close. 
     
    Submitted on 2011/12/12 at 3:58 pm

    Pop/Kallen – Just the DIA $121 calls at .80 in the WCP, we don’t need to be more long so let’s ditch them even!  

     
     
    Submitted on 2011/12/13 at 1:09 am
    Down more/Rpme – We’re not down more because there is a strong, underlying expectation of QE3 in 14 hours that is supporting the market.  Things will turn pretty ugly if we don’t get it.  Notice all the negative news this morning and that couldn’t keep us down – that’s the normal shenanigans when the Banksters want to chase retailers away from their positions, which is why I wanted to go long in the afternoon (and we’re still pretty bullish in the WCP, playing for the Fed).  But, as noted above, China is failing and we did expect them to be NEXT so it’s pretty hard to get enthusiastic unless the Fed is going to come up with another $500Bn or more tomorrow to get us through the next Q.  
     
    Submitted on 2011/12/13 at 9:47 am
    Don’t look at the DIA $121 calls – it will make you cry as we bailed at .80 yesterday in the WCP but the rest of our picks are bullish so we’re good for now but we’ll see about picking up a new short position as this morning rally tops out – perhaps the SQQQ spread from Friday, which is getting cheap again.  
    Woops, oil just went ballistic so let’s add 10 GLD Dedc $164 calls to the WCP at .90.  GLD was $170 last week so good potential if Ben goes easy and $1,660 should put in a good floor, below which we’ll stop out if the Fed disappoints. 
    Submitted on 2011/12/13 at 10:18 am
     
    DIA/NF – We dumped at the close in WCP but yes, Rule #2 kicks in here if you still have them.  
    Good discipline Rustle – If this is a real rally, we have a few months to add more bullish positions (starting with those bottom 5 banks!).  
    XLF/DC – I believe we decided to wait on the Fed – unless, of course, we get .35 or better ahead of it.  Were those for the WCP?  I don’t have them in there…
     
    Submitted on 2011/12/13 at 10:42 am
    DXD/Morx – In the WCP, yes because we are bullish otherwise and that’s our protection against a Fed failure.  Had we had a big down morning, I would have been happy to take the money and run but now they have become a hedge.  
    Let’s get out of GLD in WCP at .70 – maybe back in later but not worth risking big loss.  
     
    Submitted on 2011/12/13 at 2:12 pm

    DIA 12/31 $117 puts at .90 are my go-to put if the Fed disappoints.  If 12,100 fails then 10 of those in WCP with stops at .60.  

     
     
    Submitted on 2011/12/13 at 2:14 pm

    Fed Statement has no new program – Make it 20 of those puts in WCP!  

     
     
    Submitted on 2011/12/13 at 2:45 pm

    $1.20 is plenty for the DIA puts in the WCP (+30% in 20 minutes).  Let’s dump them and then see if we’re going to bounce off 12,000 or not.  

     
     
    Submitted on 2011/12/13 at 2:50 pm
    .  

    Next DIA puts on deck are the 12/31 $116 puts at $1 and we’ll grab 10 for the WCP if the Dow fails to hold 12,000 but oil is holding $99.86 at the moment and the RUT is holding 725 and the S&P is holding 1,230 and the Nas is right on 2,600 so we’re either pausing for the next leg down and we pick up down volume into the close or maybe this isn’t much of a surprise and we just have a little more consolidation at our lows.  

    Submitted on 2011/12/13 at 2:55 pm

    Now TLT Dec $119 calls can be sold for $1.15 and the $120 puts can be bought for $1.45 for net .30 on the spread and that’s worth risking 5 in the WCP.  

    Submitted on 2011/12/13 at 3:13 pm

    Damn, 81.02 – now back in DIA puts until the Dollar calms down.  12/31 $116 puts still a dollar so 10 in WCP and we’ll buy 10 $115 puts if they get to $1 (now .80) and then put tight stops on the $116s.  

    Submitted on 2011/12/13 at 3:21 pm
    FAS/WCP, Scott – But the $60 calls are still $1.98 and our goal is to get $1 for them.  As soon as we’re confident the $61s aren’t coming back, we can pull the calls and leave the $61s short naked.  That’s why I love these spreads. 

    Down goes 12,000!!!  81.02 – now we have 2 stop lines on the DIA puts!  

    Submitted on 2011/12/13 at 3:36 pm

    So now it’s 10 DIA 12/31 $116 puts AND 10 DIA 12/31 $115 puts, both at $1 in the WCP.  The $116 puts are $1.30 and a stop on those at $1.20 and a stop on the $115 puts, still $1.02 at .90 but we’re willing to hold both overnight to balance out the WCP.  

    Submitted on 2011/12/13 at 5:09 pm
    DIA puts in WCP all  stopped out – I hope for good reason!  Dow closed back at 11,954.94 – very cute!  

    Submitted on 2011/12/14 at 10:02 am
    As an upside poke, I like the XLF Dec (Friday) $12s at .55, 20 in the WCP for fun but at .40 they stop being fun and we’ll give up.  

    Submitted on 2011/12/14 at 11:03 am
    FAS/WCP, Enni – Yes, the idea was to pull the $60 calls (now $1.40) at the point where we no longer feel that the $61s are going to go back in the money.  That point will come this afternoon and hopefully before they fall below $1.  If you can’t leave it naked, you can pick up the Jan $70s for $3 to cover with the intention (assuming the $61s expire worthless) of selling the Jan $65s (now $4.50) and rolling down to something like the $60s (now $6.50) so you take that $1 back off the table and the new roll cost you net .50 (the $1.50 you pull off the $60s and the $1 in your pocket less the .50 of the $3 you spend on the new calls). 

    Submitted on 2011/12/14 at 12:20 pm
    TNA Dec $40/41 bull call spread is .40 – 10 in WCP.  
    Submitted on 2011/12/14 at 12:50 pm
    TNA/WCP, Winning – No, I’m going to pull the $40s (now $1.55) if we don’t get over our bounce levels (715 on RUT).

    Submitted on 2011/12/14 at 1:08 pm
    WCP Moves (let me know if I’m missing something as I’m doing this on the fly):  

     GNW still good at $6.23
    SCO good for the full gain now on short puts.  
    FAS Jan $67/72 bull call spread is still $1.20 so no problem and $67 not too far away.   This spread gives us cover should we decide to pull the new $60 calls and leave the naked short $61s.
    New FAS (Dec $60/61 at .55) is fine, of course.  
    10 TNA Dec $41/43 bull call spread at $1.10 –  Let’s buy back the $43s for .40 and roll to a better spread in the afternoon if things don’t improve.  The $41s are currently $1.  
    5 short JPM Jan $32 puts for .90, now $2.20 – ouch!  
    WCP:  40 XLF Dec $13 calls at net .16 - 20 more added at .04 today but probably a waste of $80
    TNA $40/41 at .40 –  brand new.  
    DXD Jan $15 calls are $1.60 - Let’s take that and run. 
    Offsetting FCX puts down but not out.  
    Now TLT Dec $119 calls sold for $1.15, now 2.10.
    TLT $120 puts at $1.45, now .55 - lets DD on the $120 puts for 10 at $1 average. 
    XLF Dec (Friday) $12s at .55 – now .68 - out by the close, hoping for .80 at least.  

    Submitted on 2011/12/14 at 4:14 pm
    FAS/WCP, Morx – Oh yes, we wanted to get out by the close so we’re cashing the Dec $60 calls at $1.15.  I kind of doubt XLF retakes $13 now.   Same goes for the XLF $12s, out at .60, not worth holding overnight (and we’ll probably regret it like we did selling the DIA calls last week).  

  4. Phil

    Submitted on 2011/12/15 at 11:33 am 

    TLT/WCP, Neet – Let’s see, we sold the $119 calls for $1.15 and they are now $2.10 and we bought the $120 puts for net $1 and they are now .25 – so not good at all there.  We can roll the short calls but the puts are going to be toast if we don’t get a good move but, as the trade was net .45ish, we can roll to the next week $120/119 bear put spread at .32 for +.07 so that will be our move if we fail to break the morning high on the next run up.  Feel free to remind me.  

  5. Phil

    WCP Update:  

    Expiration day already – time sure flies!  

    What a crazy 10 days it’s been since the last update of our aggressive virtual portfolio.  It’s been a lot of up and down but, on the whole, we’re down less than 100 Dow points from where we were on 12/5 and just a bit over where we were last options expiration day on 11/18 (11,800).  No, it’s not fixed – just the most amazing coincidence you ever saw!  Again…

    Of course, our cynical motto at PSW is "We don’t care IF the game is fixed, as long as we can figure out HOW the game is fixed and place our bets accordingly."  Let’s see how that went over the past 9 sessions.  We left off on the morning of the 5th with a net of $39,310 – up a ridiculous 162% in just over a month and our goal coming into the home stretch was pretty much not to blow it.  

    We closed the following positions:

    • 5 FAS Dec $48/55 bull call spread at $3, out at $6.50 – up $1,750
    • 10 GLL Dec $16 calls at .65, out at $1.05 – up $400
    • 10 TZA Dec $31 calls at net $1.25 ($1,250), out at $1.25 – even
    • 20 USO 12/9 $38 puts at .15, out at .28 – up $260
    • 10 DIA Dec $117 puts at .90, out at .85 – down $50  
    • 10 TZA Dec $29 calls at net $1.37, out at $1.70 – up $330
    • 20 XLF 12/9 $12 calls at $1.02, out at $1.05 – up $60
    • 10 FAS $66 calls at .60 (spread), out at $3.40 – up $2,800
    • 10 FAS Dec 67 calls sold for net $0 (spread), out at .70 – down $700
    • 20 DIA Dec $121 calls at net .80, out at .80 – even 
    • 10 GLD Dec $164 calls at .90, out at .70 – down $200
    • 20 DIA 12/31 $117 puts at .90, out at $1.20 – up $600
    • 10 DIA 12/31 $116 puts at $1, out at $1.20 – up $200
    • 10 DIA 12/31 $115 puts at $1, out at $1 – even 
    • 20 XLF Dec $12 calls at .55, out at .60 – up $100
    • 10 DXD Jan $15 calls at $1.25, out at $1.60 – up $350
    • 10 FAS $60 calls at .55 (spread), out at $1.15 – up $600
    • 40 XLF Dec $13 calls at net .16, out at .05 – down $360

    Busy, busy in this choppy market.  Don’t get too excited, these were just the winners we pulled off the table but it’s a very nice $6,140 on our closed positions brings our realized virtual gains up to $41,465 – not bad as $25,000 was our Christmas goal.  
     
    Last week we were an amazing 8 for 8 on our open positions though and that added net $3,950 – we’re certainly not replicating that this week as our strategy in the choppy market was to make a lot of bets and see which ones worked – what’s left are the dregs, as well as some of our winners that we’re riding through  expiration. 
     
    Our remaining open positions are:
    • 10 GNW Jan $5 calls at net $1.34 ($1,340), now $1.50 – up $160
    • 10 GNW Dec $6 puts sold for .85 (-$850), now .45 – up $400
    • 10 GNW Jan $6 calls sold for $1.15 ($1,150), now .70 – up $450
    • 5 SCO Dec $37 puts sold for net $1.90 (-$1,900), now .05 – up $1,850
    • 5 FAS Dec $40 puts sold for $2.40 (-$1,200), now .05 – up $1,150
    • 10 TNA Dec $41 calls at net $1.50 ($1,500), now .80 – down $350
    • 5 JPM Dec $32 puts sold for .90 ($900), now .45 – up $225
    • 10 FAS Jan $67/72 bull call spread at $2 ($2,000), now $1.20 – down $800
    • 10 FCX Feb $33 puts sold for $1.25, now $1.75 – down $500
    • 10 FAS Dec $61 calls sold at net $0 (spread), now .33 – down $330 
    • 5 TLT Dec $119 calls sold for $1.15 ($575), now $2 – down $425 
    • 10 TLT 12/25 $120/119 bear put spread at net $1.07 ($1,070), now .45 – down $620
    • 10 TNA Dec $40/41 bull call spreads at .40 ($400), now .65 – up $250

    Up net $1,460 is not as bad as I thought.  That’s surprising but I guess the poor performance of our last few plays gave me the impression that it was going worse.  Now I’m much more inclined to cash out than I would have been if we had losses to work out of as we have a net total of $42,925 and that’s up almost 200% in 6 weeks – you don’t push that kind of luck (and don’t think gains like that are anything else but luck!).  

    Please don’t forget to share your own good fortune with others this Holiday Season!  We’re over our goal at the Food Bank but we’re still getting matching donations (and many thanks to all who contributed) so please – if you put off doing something and if you are able – please take 90 seconds to click on the link below and give someone you don’t know a Merry Christmas – thanks!  

    Reach more New Yorkers with a matching gift!

    I highly recommend reading through the comments (above this comment – or attached to our last White Christmas Portfolio Update if you are looking at this in your EMail) as it’s a great way to review all our moves in a crazy choppy market.  
     
    We’re in, we’re out – we’re all over the place but mostly – we take quick losses and quick profits and MOST IMPORTANTLY – WE ALWAYS GO FOR BALANCE!!!
     "Lesson not just karate only. Lesson for whole life. Whole life have a balance. Everything be better. Understand?  Better learn balance. Balance is key. Balance good, karate good. Everything good. Balance bad, better pack up, go home."
    We’ll keep on trading through Christmas, of course but I’m going skiing for a couple of days the next week so I’m certainly looking to get to cash next week and we’ll be done – looking to start a fresh $25,000 Portfolio Next year.
     
    Now is the time to focus on our friends and family and share some of our good fortune – that’s balance too!
     
    All the best, 
     
    - Phil
     
  6. Phil

    Submitted on 2011/12/16 at 10:13 am

    Today is a quad witching day with pretty much everything expiring.  Index options expire around 11 so a lot of posturing and a lot of violent moves throughout the day.  These are generally bad days to trade but we do have our WCP positions to clean up (see update) and my very quick review is:  

    • GNW – Fine
    • SCO – Expiring worthless
    • FAS short $40s – expiring worthless
    • TNA $41 calls – Oh my god I can’t believe we got out even at $1.50!  
    • JPM – HOPEFULLY expiring worthless ($32 puts).  If not, rolling to whatever is the same next week ($31s currently .30) 
    • FAS Jan $67/72 bull spread – We’ll see on Monday
    • FCX Feb $33 puts – Monday
    • FAS Dec $61 short calls – should expire worthless, now .30 so stop at .50.  
    • TLT Dec $119 short calls – Now 5 at $2.47, we can roll to 10 short next week $121 calls at $1.40 each for a small credit
    • TLT 12/25 $120/119 bear put spread – I’m for spending .90 to roll up to the $122 puts (the $120s) and buy back the $119 puts for .30.  
    • TNA Dec $40/41 bull call spread – Should give us our $1 and, if TNA falls and the $40 puts go below $1.50, let’s cash those and leave the open short $41s – hopefully that won’t happen. 

    There, that wasn’t so bad.  Europe is flat overall and I expected us to do the same but, so far, we’re up almost a point with RUT and Transports leading us.  Volume was very good, as expected on options EOQ but that was the morning – we’ll see how we do as the EU moves into their weekend.  

    Don’t forget – 2 Fed Bears with Evans put off until 4:15 so he can slam the weekend mood!   Dudley is a huge dove but he’s at a hearing, not making a speech.  

    Dollar back over – that was fast!  TLT zoomed up at the same time so head fake – oil falling below $94 now.  

    10 QQQ TODAY $56 puts at .57 in WCP have very little premium, stop at .45.  

    QQQ puts hit .85 and pure greed not to stop at .80 in WCP (2,570+ on Nas).  Should be a .10 trailing stop once we clear .90

    TNA/NF – Something about counting chickens springs to mind…  I see .95 now for the spread and I’m in favor of taking that in the WCP (TNA $40/41 bull spread).  

    QQQ/WCP – The $56 puts are now $1.05 and I don’t expect more than $1.15 so I’d say let’s take this and run, we can always buy $55 puts (now .16) if they fail to hold $55.  

    Submitted on 2011/12/16 at 12:33 pm

    QQQ TODAY $55 puts at .22 so 20 in WCP risks losing $240 if we stop at a dime.  

    I’m not feeling it on the new Qs and they are still .22 and we don’t need them in the WCP so let’s just pay the trade fees and get out.  

    Submitted on 2011/12/16 at 3:29 pm

    JPM short $32 puts in WCP are now .15 with JPM at $31.93 but we’re weak with a half hour left so not worth waiting to close.   Other than that – all went as planned – very nice!  

    FAS/WCP, NF – We were going to see on Monday.  The Jan $67s are still $1.90 and the $72s are $1 and the original spread was $2 so, if we’re giving up, we can pull the $67s and get $1.90 back and then hope the $72s expire worthless and we lose net .10 on the deal.  BUT, with FAS at $56.64, it only takes a 28% move in FAS to get to $72, which is a 9% move in XLF to $13.20 so the question is – are you confident enough that XLF will not retake $13.20 in the next 30 days to risk short FAS $72 calls?  Since $13.20 was the top of the top in December – the answer is "pretty sure" but I’d rather risk only getting $1.50 off the table to be VERY sure and, since we only get net .90 back if we kill the whole trade – waiting is the winning play at the moment. 

    Submitted on 2011/12/20 at 1:31 pm

    DIA 12/31 $118 puts at .63, 10 in the WCP to lock in some gains. 

    DIA/WCP, Jerconn – Yes, they are now our hedge as we have 3 longs against it.  Also, they are 2 weeks out so attractive to roll and hold for weekend, even if they don’t work out this week.  

    Final WCP Moves:  

    • TLT – We’re not likely to do better than $3.60 for the $123 puts so let’s get those off the table.  $122 puts are $2.60 if you didn’t take the last roll.  Short $121 calls now .30 so a stop at .50 and that’s a nice trade.  
    • FAS – Jan $67s now $2.80 and worth pulling and we’ll yank the $72s if we can get away clean (now $1.45) for $1 or less.  
    • GNW – Let’s shut it down as we weren’t intending to keep this portfolio open through Jan.  The  $5/6 spread is .70 and the short puts already expired worthless so net .70 back off the net .66 credit is up $1.36 on the trade – not too shabby.  

    Unless I’m mistaken (and please tell me if I am) that leaves us with just the DIA Friday $118 puts, now .64 but I still like those so let’s see how the day goes.  

    And that’s how fast we flip from 100% bullish (yesterday) to 100% bearish while taking all the cash off the table!  

    I’m pretty sure that’s over $45,000 – I’ll write it up tomorrow – congrats to all the players!  

    Submitted on 2011/12/21 at 2:23 pm

    GNW/WCP, Hernas – We rolled that at some point but no biggie as the $7.50s are down to .06 and you can pull that set for net $1.07.  

    FCX/WCP, Hernas – Ah, I did miss those, thanks!   The Feb $33 puts are now $1.25 and that’s what we sold them for.  I have faith in that short play but our goal was to shut down by XMas and yesterday’s rally gave us the opportunity we’re taking advantage of today since it looks tired and not worth risking.  Frankly, I don’t even remember what the FCX puts were offsetting but whatever it was, we cashed out the other legs with a profit so no big deal getting out of these even and not worrying about them.  

    Submitted on 2011/12/21 at 4:03 pm

    I’m torn on our DIA puts in the WCP, now .46.  I WANT to DD but it’s not worth it if we pop tomorrow but I super-doubt that will happen so I think leave them and see how the morning looks.  If we do get a big dip – we’ll just make less. 

    Submitted on 2011/12/22 at 10:21 am

    USO Next week $38 puts at .48 – 20 in the WCP.  

    That reminds me, we had 10 DIA 12/31 $118 puts at .60 in the WCP and they are now  .30 and can be rolled up to the $120 puts (now .70) for .40 and doubled down for 20 DIA 12/31 $120 puts at net .85.

    USO/WCP, Yodi –  They topped out at .52, not too sexy.  I think we can do better.  

    Submitted on 2011/12/23 at 9:52 am

    The Dollar is at 80.30 and TLT is heading down so we’re back to panic mode again.  The VIX is still flat at 21.16 and you can play the volatility by selling the next week VXX $34 puts for $1.12 and buying the Jan $32/35 bull call spread for $1.30 for net .08 on the $3 spread.  Let’s do 5 of those in the WCP over the weekend!  

    Submitted on 2011/12/23 at 1:15 pm

    USO/WCP, Lunar, Crussell – Yes, it was our intention to hold over weekend but no change in size.  

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