Friday, January 01, 2010

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Thursday, December 31, 2009

Due for a downswing -- a put credit spread on SDS

I think we are overdue for a couple of down days.   Sold 20 Jan SDS 35 puts at 1.17 and bought 20 Jan SDS 34 puts at .62, for a net credit of .55.  SDS was at around 34.5 at the time.   I tried initially at .56, which split the spread, but it didn't fill after around 15 minutes, so I bumped the credit down a penny.  Then it filled within a couple of minutes.

Wednesday, December 30, 2009

Taking some profits in Oil

From a chart standpoint USO is up around a 38.80 resistance point.  I wouldn't be surprised to see a traceback--although the fundamentals for oil could easily override this.  Since I only had about 0.33 of time value left on my Jan 37 calls with more than two weeks before expiration I closed out that covered call position, hoping to buy back in at a cheaper point.   I did a net credit order at 36.66, about half the spread.   USO sold at 38.99,  the calls at 2.32.  My net profit on this position was 1.00 per share.

click to enlarge graph