[Weekend Summary]
Dear Member:
It was an exciting record breaking week for the Dow 30 Industrials. The Nasdaq and SP-500 also moved fairly well though without the same fanfare though the broader SP-500 did dip a bit Friday. The markets were a bit more subdued today on GDP news that wasn't as good as had been expected and some indication that inflation may be on the move. I received an interesting email from one of my brokers today announcing that margin requirements were being increased. Though I avoid margin, it was interesting because it indicates to me that that brokerage, at least, is increasing its protection against increasing volatility and may be forecasting a downturn. May often does see a drop in the averages following the excitement of the major portion of the earnings season.
This week, I sold some May 45 puts against my Sept 44 long put position. Today, I bought them back for a nice three day gain of 38% on that short term leg. I will watch for the next opportunity to repeat the process (though not necessarily with the May 45s).
I entered a bearish call credit spread today on Sandisk Corp (SNDK)where I sold the May 45 calls and bought the May 47.50s with 21 days to expiration. That play promises a 35% return in three weeks if the stock stays below $45 at expiration and I don't adjust in the meantime.
Sirius Satellite Radio (SIRI) finally showed a little life over the past 3 days and now may present the opportunity I've been looking for to sell some calls against my Jan '09 2.50 LEAPS calls.
The spreads on SPY, Citigroup (C) and McGraw-Hill (MHP) are doing their thing and are just fine for now.
Thanks for subscribing,
Bill
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