[Weekend Summary]
Dear Member:
I'm back from Traders Expo and it was a great experience. Thanks to those of you who came up and introduced yourselves after my talk and thanks for buying "Trade Your Way to Wealth." Someone commented on the book Amazon that I am to trading what Warren Buffett is to investing. That's awfully kind, but way, way over the top! Honest, I don't know the writer and I didn't send him a check. A couple of things I heard reinforced knowledge I already had, but is worth repeating. One of the speakers noted that even very good traders rarely do better than 50% winning trades and most of a traders profits are made in 3% of the trades. Those statistics really bring home the need to cut losses and let profits run, don't they.
The markets made a pretty significant bounce back in the last half hour today, but I think that may just have been short covering before the weekend. Personally, I am not convinced that the bear has headed for hibernation just yet.
I did take some action in Option Trader this week by selling some short term calls against my long term positions in both the Blackstone Group (BX) and SPY. In each case I brought in some cash and sold time value only. If the stock prices jump, I'll have to close the short term short legs, maybe even at a loss, but the longer term long legs often make up for that anyway.
So far the iron condor on Lehman Brothers (LEH) continues to do well with nothing for me to do but await March expiration. Of course, if the stock falls below $50 I may have to make an adjustment, but the bear call side of the spread looks safe right now.
The Sirius Satellite Radio (SIRI) spread may offer the chance to profit on the short leg pretty soon, but no matter what, there is a whole lot of time left on that one.
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