CHRISTMAS PROMOTION
LTOptions at a 33% discount during the Year End Holidays.
Tell me More

BookingAlpha Option Trading Advisory

Sunday, June 3, 2012

Weekend Portfolio Analysis (06-03-2012)

Well, May 2012 is in the past now. This week I decided to close the June 125/127 Bull Put Spread in what was a good decision, given that the markets sold off strong after that closing the week with a -3.1% loss for the S&P 500. I held on to the plan outlined on Sunday and got good results.

There remain two positions open in the portfolio right now. One of them is the SPY 137/139 Bear Call Spread which feels really comfortable now, and will very likely be left to expire worthless 12 days from now. With SPY sitting at 128.18, and so much uncertainty and fear in the markets, this position is virtually a full winner.

The other position that remains open is the IWM 72/20 Bull Put Spread. With IWM currently sitting at 73.82 this one might need an adjustment. If we keep having an "organized" downtrend, we would still be safe by June 15. But that is, if we follow the lower end of the downtrend channel in an "organized manner" given that the breakeven in this position is at 71.72.

(Click on image to enlarge)

 So, this position might indeed be threatened in the next 12 days but at the same time I'm not in such a terrible shape.

Taking a look at the SPX index, and the oscillators:

(Click on image to enlarge)

 Stochastics are not in oversold territory yet, and the McClellan oscillator still shows more room for downside movements. So, the low on Friday might very well not be the lowest point we will see.

Portfolio Beta-weighted:

(Click on image to enlarge)

Profitability with SPX above 1246.20 on June 15. That's not bad, but not something you can bet on.

Plan for the week

As for the SPY 137/139 Bear Call Spread, I won't touch that. My plan is to let it expire worthless
IWM 72/74 Bull Put spread, I will adjust this one if IWM hits 72.20. If that happens this week, then I will probably adjust the position using June options. Most likely 70/68 for which a credit of 0.30 can currently be obtained. Now, if the markets don't look oversold at that point, then I will have to roll over using July options. And in that case the 67/65 Put spread is currently worth a credit of 0.36. That would be a good candidate. If on the contrary IWM starts to move up, I won't close anything. I'd like to take this position as close to expiration as possible and give it a chance to be a winner.

On the other hand, it is the beginning of June, and this week we will be 46 to 42 days away from July expiration. So, it is the time to start opening positions on the July portfolio. The SPY 118/116 Credit Put spread is a good candidate as I write, that yields a credit of 0.32. Not bad for that distance. With a high VIX, PUT premiums are juicy and that will allow me to position my trades well out of the money for July.

Trade smart, and have a nice week.

Check out Demo-Record

Go to the bottom of this page in order to see the Legal Stuff

No comments:

Post a Comment