[Weekend Summary]
Dear Member:
The market behavior today was enough to cause some concern (at least short term) for the bulls. I exited my Jun 70 call position on Cardinal Health (CAH) for a 60 cent profit, but that wasn't enough to save the overall straddle (I closed the put leg some time back) from a loss. As I've said before, I hate losses, but must expect them fairly often on straddles. The beauty is that they are limited and when a straddle hits, it can really provide large profits.
Diamond Offshore (DO) turned down sharply today and that could bode well from my remaining leg, the Apr 75 puts. You'll recall, I already guaranteed a profit for my initial spread when I closed the short 80 put leg for a strong profit. Now, I am only trying to add to it if the Apr 75 puts I kept can increase in value.
Altria (MO) dropped today and that gave me the opportunity to adjust my iron condor. I originally opened the position for a $1.75 credit. That position consisted of 4 legs -- short the Apr 75 calls and short the Apr 70 puts, long the Apr 80 calls and long the Apr 65 puts. After MO fell through support, I bought back the April 70 puts and kept the other three legs. If MO continues to drop, my remaining 65 puts should gain in value and I can sell them to add to profit. So far, it doesn't look like I have to do anything with the call side of the condor.
Morgan Stanley (MS) has made a nice upside run that gave steadily increasing value to the call side of my Jul 60 straddle. The stock turned over today so I may be looking at an adjustment next week.
Nothing much to do with the Micron (MU) and SPY spreads except leave them alone for now.
You may have noted that Burlington Resources (BR) no longer exists and is now part of Conoco Phillips (COP) so my straddle is now dependent on COP price and volatility. After a nice run up, it, too, turned over today and may result in an adjustment for me next week.
The tech sector ETF, XLK, took a hit today, but is still well above the trend line. Not much to say for the Biotech Hldrs (BBH) except that I will be looking for ways to reduce risk next week.
Hope you have a fine weekend.
Bill
|
