Saturday, March 20, 2010

Option activities for March 2010

***Disclaimer***

Options involve risk and are not suitable for all investors.  Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options (the "ODD").  Copies of the ODD are available from your broker, by calling 1-888-OPTIONS, or from The Options Clearing Corporation, One North Wacker Drive, Suite 500, Chicago, Illinois 60606.  Any strategies discussed, including examples using actual securities and price data, are strictly for illustrative and educational purposes.  In order to simplify the computations, commissions, fees, and margin interest and taxes have not bee in included in the examples used in this presentation.  These costs will impact the outcome of all stock and options transactions and must be considered prior to entering into any transactions.  Investors should consult their tax advisor about any potential tax consequences.  No statement within this presentation should be construed as a recommendation to buy or sell a security or to provide investment advice.

Summary of option activities for March 2010:

-- started with 5 contracts each of 500/480 1:3 and 495/475 1:3;  I bought some 450 strike put tails and turned them into 500/480/450 1:3:1 and 495/475/450 (closed it after market moves away from desired direction)
-- added 5 more contracts of 495/475 1:3 (closed it after market moves away from desired direction)
-- added 10 contracts of 495/485 1:3 (closed it after market moves away from desired direction)
-- added 15 contracts of 505/510/460 1:3:2 BWB (held it till expiration on 19th of March)
-- added 11 contracts of 510/505/470 1:3:2 BWB (held it till expiration on 19th of March)
-- roll out my GS covered calls from March 170 strike to July 180 strike for a $3.62 credit per contract
-- scratch my GS ratio spread 145/135 1:3 for even-money when I realized that GS took rocket fuel for lunch;  as a result, I completely dropped my idea of making a collar.
-- took profit on the C short strangle and opened a new short strangle on C only to realize that C was with GS at the rocket fuel lunch.  Therefore, I promptly sold the C $3 strike put for a profit and got ready to roll out my C $4 strike put to $5.
-  total profit for ratio spread, BWB and others is about $5,300

I should put up my thoughts about the above in my next post as I think that it deserves a post on its own.


-- dream

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