SURVIVING THE GAME
FEBRUARY 19, 2009
2009 – 15

Model portfolio stopped out on SPY and AAUK yesterday. Hold short calls, stops as indicated in position summary. Already out on AA. Close to being out of XIU and CAT. Only SU has some breathing space. As a group they are showing a small loss of $1539 or less than ½% of portfolio since positions instigated between Jan. 15th and Feb. 6th. Not bad considering the markets are down 10%+ in the same time period. If market continues down, this will actually turn into a profitable set of trades despite being completely wrong on direction. The gain on the short calls will become greater than the loss on the long stocks.

The risk to the portfolio continues to decline. It is currently in the 8-10% range, down from 14% a week ago. As losses are incurred, pare back your risk until things level out or start to return in your favor.

OPEN POSITIONS:

Hold Encana butterfly.

Short DIA JUN & SEP calls. Hold, stops as indicated. Gains on these as markets decline softening losses on other positions.

USO – actually up today..unbelievable! Hold positions.

XIU, SU, CAT – still in, hold, stops as indicated. May be out of XIU and CAT today by the look of things. Markets down in overnight due to poor earnings reports after close yesterday.

SPY straddles – roll APR down as shown in new trades. Hold others.

NEW TRADES:

Roll the SPY APR $85 straddle down to $80. Buy back the 25 $85 puts, sell 25 each of the $80 calls and puts. Place exit stop on short $85 calls at $250 each.

Place orders to purchase the Encana $60 calls at $40 each to close and to purchase the XIU $14 calls at $25.00 each to close.

Options Guy
Editor
Surviving The Game
optionsguy@shaw.ca