[Weekend Summary]
Dear Members,
Well, as they say, you can't go broke makin' a profit. That's what I did in the Amazon Jan'05 puts (ZQNMW). I made 11.5% profit before commission in just three days. I could kick myself, though. I set my stop a little too tight and was stopped out yesterday before today's big move.
The Dec 70 puts (UHBXN) are doing great. I was able to move my stop over $2 today so I now have an order to sell the puts contingent on the stock price exceeding $63.97. There is already a nice profit in the position and I will try to protect it using stops contingent on the price of the stock. Some brokers accept contingent orders, and I really like them.
I closed out the losing side of my Safeway (SWY) Dec 25 straddle once I had a bigger profit on the winning side (puts in this case) than I had loss on the losing side (calls in this case). I still am long the Dec 25 puts (SWYXE) and have my sell stop contingent on the stock exceeding $22.40. The puts have some nice unrealized profit at this point and that profit is greater than the loss I took on the call side. This is one of the neat things about a straddle. Movement in the stock, either up or down can produce a profit. So can a move in implied volatility.
I also opened a calendar spread on CREE this week. I bought the Dec 20 calls for $2.75 and simultaneously sold the August 20 calls for $1.55. I am in the position for a net debit of only $1.20. Generally, I expect to exit the whole position no later than August expiration, but in this case, I may opt to sell the Sept calls if we reach Aug expiration and the Aug 20's aren't in the money. In fact, I could conceivably sell the Oct and Nov calls after each expiration. I'll just watch and let the stock guide my decision.
A good week for me in terms of profit. My plays have been weighted toward the bear side and at the moment, I don't see any turn to the bull side.
Hope you have a terrific weekend. We're off to Telluride, CO for some golf and fishing. I'm looking forward to hunting for some more good trades next week.
Good Trading,
Bill
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