(for details pls visit www.OptionPundit.net)
This was a very hectic week and was a mixed bag of results for me personally. As I mentioned earlier that my new objective now is to generate about 6% per month consistently. Till Thursday close I was way above that for the past week, but y’day drop took away few percentage point gains. OPN capital closed +4.2% up for the week.
1-2-3, as simple as it was (pun intended), Dow dropped by nearly 1%, S&P and Nasdaq about 2% each and Russell 2000 (RUT) dropped nearly 3% during the week. This month (Aug expiration) saw my first loss on RUT where I closed it for 15.6% loss. I think I took the right decision as volatility would have crushed my adjustments. It dropped 28.54 points within a day yesterday, wow! I currently have Google trade below water as well (-2.6%). Despite these two losses, OPN Aug’07 portfolio is still up +11%.
So far I enjoyed beautiful returns from my income trades for Aug, but now I am at a crossroad and I need to make several adjustments next week if markets didn’t show any signs of strength. I would like to benefit from sell-off if it happens, but also protect if it goes up.
Due to packed schedule I also missed MA earnings, AHM and BSC’s beautiful fall from grace. Those who have been reading OP for quite sometime, know how OP readers and I benefited from New Century’s and Lend’s fall. I lost in Enron and Worldcom long time back, and they taught be good lessons on how bankrupts behave and since then “Bankruptcy play” are my favourite directional play.
Volatility is high and so is the premium and hence wider ranges to play, what more to ask ! It’s a good market for option traders, enjoy it.
Profitable trading, OP
Leave a Reply