SURVIVING THE GAME

MAY 18, 2009

2009 - 30

MARKET COMMENTARY:

Decline continues to set in. Futures down again in Sunday evening session. S&P 500 nearing 875. As mentioned, lightening up on long positions was a good idea. The question is...how far will we pull back? I suspect we have a bit to go, probably down to 800 on S&P 500. You can lighten up a bit more if desired and get in lower.

TRADES:

I closed my USO July positions on the big spike up on Tuesday. Sold the JULY $35 calls at $150 each. Net a small loss of $1080 on that position. Still have USO JAN 2010 positions.

Sold an SPY straddle. Can't say which one but it is below current market levels of $88 on SPY. Netted $845 per straddle. Did 25 straddles for portfolio. Risking +/-1.5% of portfolio for potential 7% gain

OPEN POSITIONS:

Still in USO, SU, JULY OIL straddle, GAS and uraniums. Hold.

Options Guy
Editor
Surviving The Game
optionsguy@shaw.ca

SURVIVING THE GAME

MAY 11, 2009

2009 - 29

MARKETS:

It appears the correction is at hand. Most indicators I watch are pointing to a significant pullback. My guess is back to 800 on S&P 500. I think Toronto will hold up better. Base metals and other commodities are rebounding nicely. If your a short term trader you may want to lighten up a bit on your longs and re-enter at lower prices.

URANIUMS:

Yahoo. Hold tight. They appear to have sucessfully separated themselves from the pack. If they are able to hold up during this pullback it bodes well for a continued rally. I am surprised at the speed of the rebound but I'll take what I can get. I'm ready to add the second allotment if we rally high enough.

TRADES:

Still in USO, SU and July crude straddle. USO starting to come to life. SU is doing really well. Oil straddle flat. Long Natural Gas using the GAS in Toronto. Moving up nicely.

No new trades lately. Just waiting to re-enter some SPY straddles. Probably around the $83 level. Volatility dropped off during rally so I'll wait to get a better price as we decline and volatility increases.

With that I'll see you later

Options Guy
optionsguy@shaw.ca

SURVIVING THE GAME

MAY 4, 2009

2009 - 28

HOW TO BE WRONG AND STILL COME OUT AHEAD !!!

The beauty of options is that you can be wrong...dead wrong and still come out smelling like roses. I have to admit, I sure called it wrong on this rally. I almost missed the whole thing except for my uraniums and SU position. The beauty is, I still made money being wrong.

I closed some positions this morning after the housing numbers so now I can fill you in on the trades.

On Mar. 16th I sold the MAY $75 straddle on the SPY for $980 each. On Mar 25th as we rallied I bought back the $75 calls for $840 each. I then sold the $82 straddle for $960 and sold some $89 calls for $195 each to balance the short $75 puts. So I had a short straddle at $82 and a short strangle at $75 and $89. Today as we rallied I bought them all back. I paid $10 for the $75 puts, $35 for the $82 puts, $710 for the $82 calls and $185 for the $89 calls. All told I sold the set of options for $2135 and bought them back for $1780, making $355 per option or $8875 for the portfolio. Not bad considering I was dead wrong.

On Apr 23rd I sold the SPY June $84 straddle for $955. Bought it back today for $920 even though we have rallied 50 points on the S&P or $5.00 on SPY. How is this possible? Two reasons. First, time has gone by, 11 days to be exact. That erodes the value of the options. Second, volatility has fallen from about 43% to 35%. That also erodes the value of the options. So, even though I was wrong again...I still made money, not much but a total of $875 for portfolio.

On Apr 6th I sold the Crude Oil June $52 straddle for $8900. I bought it back on Apr 23rd for $6650 and sold the June $50 straddle for $6000. Today I bought back the $50 straddle for $5100. Total is net gain of $3150 per straddle x 5 straddles is $15750 profit in one month !!!

OPEN POSITIONS:

Still short the July $52 straddle. Sold at $8900 each. Closed today at $8800.

Stil lhold the long SU/short Jan $20 call position. SU closed at $28.36 and option closed at $960. Open profit of $5060 on that position.

Still have USO July and Jan 2010 option positions. Hold

Uraniums.....up 72.51% on basket since March 16th. What can I say. Preparing to purchase second $16000 worth if we get to 100% gain. Hold.

I can only imagine all of you holding the uraniums are over the moon happy. I am happy for you as well. I hope they hold and don't give back these great gains of the last 6 weeks.

SUMMARY:

To sum it up..I blew it. I completely missed this rally. The upside is that on March 10th, the beginning of the rally I was up 6% for the year. Today after closing the SPY and Crude positions I am up 20.5% for 2009 and up 43% since October last year. I cannot complain. This shows how powerful options can be. Able to make money even being completely wrong on the market direction.

This rally still creeps me out but I am obviously wrong. Still waiting for a big pullback to get long. I will be selling more straddles on SPY soon.

I will keep you posted of any new trades as they come along.

Options Guy
optionsguy@shaw.ca