[Weekend Summary]
Dear Members,
This past week proved to be profitable again. I closed my United Health Dec 70 Put (UHBXN) trade for a 49.23% gain before commissions in ONLY A WEEK!
I had closed the Call leg of my Safeway Dec 25 straddle last week as the stock began to move farther down, thus limiting the loss to $1.25 per share on that leg and letting the profit run on the Put leg. This past week, I closed my Dec 25 Put (SWYXE) leg for a handsome $2.30 per share profit before commissions. Overall, before commissions, the straddle returned a 29.57% profit in a little less than 5 weeks.
I am still in the Bull Put Spread on Open Text (OTEX), short the Aug 25 Puts (QFTTE) and long the Auf 22.50 Puts (QFTTX). No adjustment has been necessary and at the moment the stock is continuing to cooperate by remaining in its uptrend.
I am also still in the calendar spread on CREE. I am long the Dec 20 calls (CQRLD) and short the Aug 20 calls (CQRHD). The stock has moved up fairly fast so the Dec calls are quite profitable while the Aug calls are losing. I am watching this position carefully and am prepared to roll out the Aug 20 calls to Sept 20's or maybe even Sept 25's depending on option prices next week.
The DOW 30, SP-500 and NASDAQ Composite all bounced last week and volatilities on the VIX, VXO and VXN all turned down. These are bullish signs, but the upturns in the indices were not accompanied by increasing volume so I remain wary about the market direction. We are now in the much publicized 'summer doldrums' for the market and August is often a down month. We have a "credible" terrorist threat outstanding which will keep the market edgy. I intend to remain cautious and expect my plays to be close to delta neutral or, if directional, I will keep fairly tight stops.
Last week in Telluride was wonderful. Free gondola, fantastic golf course, too much good food, and neat hiking. This week, in addition to looking for trades, I'll be getting ready to give a two day trading seminar in Denver next weekend.
Have a great week and good trading.
Sincerely,
Bill
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