[Weekend Summary]
Dear Member:
Though they tried, the markets never recovered from Monday's downdraft. The Dow was down for the week on pretty high volume but, interestingly, bounced back on Friday from its low to lose only 27 points for the day. There definitely are some warning signs in that the indices were down for the week and that was accompanied by increasing volatilities as measured by VIX and VXO. We may just be seeing some tax loss selling, but that is yet to be established. I am definitely operating under the caution light for bullish plays.
This week proved to be busy and productive. I sold my position in XLK for an 8.4% gain. I also closed out my 135 LEAPS calls on SPY for a 5% gain in three weeks. I hung on to my 140 LEAPS calls on SPY and created a spread by and selling the 155 calls for $7.30. As you are probably aware by now, that had the effect of bringing in some income and reducing my risk in the underlying long position.
Citigroup (C) moved around a bit this week and so did I. I closed my short 55 call position for a $.20 gain and a 10.8% return on that leg and, later in the week, sold the $50 LEAPS calls for $3.20. I still own the Jan '08 $45 LEAPS calls.
I also opened a bearish call spread on the "Diamonds" (DIA) by selling the Dec 123 calls and buying the 124 calls for a net credit before commissions of $0.25. If the "Diamonds" stay below 123 until expiration, this play will result in a 33% return on risk. These calls expire in two weeks.
I also opened a naked put position on Northfield (NFLD) by selling the December 10 puts for $0.80. The stock is still trading above $15 and is three strikes away from the $10 strike I sold.
Sirius Satellite (SIRI) is still bouncing around so I am happy with my spread.
I am just waiting to rollout my Biotech Hlders (BBH).
I'll be traveling on Monday and so don't look for any trades then. Have a great weekend.
Bill
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