FEBRUARY 11, 2009
2009 – 12
It seems that the latest bailout plan stinks. At least that is how the market is voting. As soon as it became clear that there was no plan yet, down we went.
I’m surprised it wasn’t worse. The market had hung its hat on the bad bank idea and that seems unlikely to happen, at least in the near term. Maybe another 1000 points down on the DOW will convince them to do something.
Model Portfolio stopped out of the DIA FEB 85 straddle yesterday at $605. $575 for put and $30 for call. Final profit was $12600.00. Can’t complain about that. Looking to purchase puts for MAR DIA straddle to lock in profits.
April soybean 1000 straddle trade working out well so far. Sold for 118, closed yesterday at 107.75 and looks like it will be down again today. May soybeans floating around $10.00 per bushel and volatility dropping back down. Squeeze in the stops to 885 and 1115. Expiry March 27th.
All other positions remain the same.
NEW TRADE:
As you can imagine, volatility spiked a bit yesterday with the 380 point drop. Now that you are out of the FEB DIA position, time to roll to new position in April, taking advantage of that volatility spike. You already have a March position. I am recommending that you switch from using the DIA options to using options on the SPY. SPY tracks the S&P 500 index as opposed to the DIA that tracks the DOW. SPY options are even more liquid than DIA. The volatility is slightly higher now in the SPY than DIA so option prices are a bit better. Sell 25 each SPY APRIL 85 calls and puts. Should net approx $1075 per straddle. Currently $1065-1085. Exit stops at $72 and $98 on SPY.
Options Guy
Editor
Surviving The Game
No comments:
Post a Comment