SURVIVING THE GAME
MARCH 27, 2009
2009 – 23

Farewell my friends. This will be the last newsletter in this format. After seeking legal council, it has been determined that I should not continue to publish the newsletter in this format. It is in violation of too many securities laws to make me feel comfortable. To make a long story short I cannot recommend specific trades, especially if I am myself trading that security. It is much safer for me to sell the newsletter to subscribers than to give it away and I do not feel it is ready to put out as a pay subscription newsletter. And I should really be a registered representative if I am going to council people on investments. So, given that I do put my money where my mouth is and actually trade what I recommend and I am not a registered representative, I have to change how I do things. This is the last newsletter you will receive by email. I have created a blog. optionsguynewsletter.blogspot.com. All the newsletters have been posted there and I will continue to add new posts. From this point on I must be intentionally vague with what I say. I cannot say buy this here or sell that at this price. I will continue to try and pass on my thoughts and steer you in the right direction.

COMMENTARY:

Markets continue to push higher. Every point higher makes me more nervous. I concede we were way too oversold and a bounce was due but this rally is too much, too fast. I still believe we are simply establishing a new trading range and will pull back soon. I am anxious to start getting long on a decent pullback with stops to exit if we break to new lows.

FILLS:

SPY APR $74 Straddle. Bought back $74 calls for $845 each on Monday as market spiked up.

SPY MAY $75 Straddle. Bought back May $75 call for $840. Sold 25 MAY $82 straddles for $960. Sold 25 May $89 calls for $195 each.

CDN$ - Sold 10 each APR 8150 straddles for 186 pts each on Tuesday.

OPEN POSITIONS:

USO – Closed today at $32.02. Place order to sell the long APR $35 calls at $75.00 each. This will close out APR position. Still have JULY and JAN 2010 positions. Hold. Actually showing profit in July position right now. Exit if position deteriorates to 50% loss from original entry point.

SU – Hold. Exit only if position falls back to break even. This is what I like to call a “ drawer trade “. Just stick it in the drawer until options expire next January. If SU is anywhere above $20.00 you pocket maximum profit of $6.30 per share or 46% return if purchased shares with cash. As described when trade was initiated, your return could be over 1300% if you purchased the shares on margin.

SPY APR $74 straddle. Closed short $74 calls when SPY hit $82.00. Still short $74 puts. Exit stop at $100 or buy back for $25 or less.

SPY MAY $75 straddle. Closed short $75 calls. Still short $75 puts. Sold $82 straddles for $960 each. Sold $89 calls for $195 each. Now have short $82 straddle and short $75 put/$89 call strangle. Hold. Exit stops if SPY hits $74 or $90. Exit 75/89 strangle if combined value of options exceeds $500

CDN$ - SHORT TERM TRADE. Initiated on the 24th. Options expire on April 3rd. Sold 8150 straddle for 186. Exit stops if CDN$ hits 7950 or 8350 before Friday the 3rd. Collected $18600 in option premium. Risking approx $3000 or less than 1% of portfolio.

URANIUMS – up about 11% from entry point. Hold. The real test will come if markets pull back, do the uranium stocks hold gains or fall back with general market. OR, can they continue to push higher if general market stalls and moves sideways. Remember, this is a long-term trade.

NEW TRADES:

There will be no new specific trade recommendations.

In closing I would like to say it has been quite enjoyable sharing my trades with you. I know most of you are not following the recommendations but it is still exciting to think that someone may be listening. I leave this format proud of the results of the last 6 months. The portfolio is up almost 30% while markets are down about 25% over the same time period. I have completely missed this rally of the last 2 weeks but I also missed it on the downside. I will always argue that it is easy to make money trading; it is just easier to lose it. Preservation of capital and risk management is the key to successful long-term gains. I will continue to share my thoughts through the blog but unfortunately I cannot make specific recommendations. I am allowed to make comments such as “ I think it is a good time to sell option straddles “, I just can’t tell you the exact ones to sell.

As always I am available to anyone wishing to discuss any of the trades I have mentioned or to just yak about trading, strategies, etc. You can reach me by email or call me.

Good luck with your future trading.

Options Guy
Editor ( retired )
Surviving The Game
optionsguy@shaw.ca
optionsguynewsletter.blogspot.com