RIMM – Adjustment # 2 (Feb 10)

As indicated via Twitter, bought back the two call spreads @ 2.65 debit each.

Earlier position: +2 60p/-2 65p/-2 65c/+2 70c
Adjustment: +2 65c/-2 70c
Net position: +2 60p/-2 65p

Net credit = $130
Max risk = $870

I would like to add that I usually don’t make an adjustment like this that leaves me with a directional bias and less credit to work with. But given the recent sell-off, I am willing to give it a shot. On the daily chart, RIMM looks nice and bullish. Even if I go wrong with it in the next two weeks, the realized net profits in FAZ and TLT positions will help reduce the pain.

Trade History:

15-Jan: SOLD -2 VERTICAL RIMM 100 FEB 10 65/60 PUT @1.50, RIMM MARK 66.22, RIMM IMPL VOL 38.69%
19-Jan: SOLD -2 VERTICAL RIMM 100 FEB 10 65/70 CALL @1.80, RIMM MARK 65.31, RIMM IMPL VOL 37.55%
05-Feb: BOT +2 VERTICAL RIMM 100 FEB 10 65/70 CALL @2.65, RIMM MARK 67.73, RIMM IMPL VOL 43.14%

Quick Position Review – Feb 10

Out of the 3 positions for February 2010, two positions on FAZ and TLT have been closed at this point and the third one continues on…

Here is a quick summary:

(1) FAZ trade was closed with $120 net profit a few days back.

(2) TLT trade was practically closed today (still left with two long far OTM options) with $100 net profit.

(3) RIMM:

Net position: +2 60p/-2 65p/-2 65c/+2 70c

Net credit = $660
Max risk = $340

As can be seen in the risk graph below, this position is currently showing a small $2 loss. With 14 trading days left in February expiration, anything is possible so I am keeping my fingers crossed.

Cheers Vik

TLT – Adjustment # 2 (Feb 10)

As indicated via Twitter earlier, I decided to buy back the short options (90 straddle) @ 1.7 debit.

Earlier position: +1 85P/-90P/-1 90C/+95C
Adjustment: +1 95P/+1 95C
Net position: +1 85P/+95C

After this adjustment, the position is practically closed with $100 net profit. I am now left with a couple of long OTM options which will most likely expire worthless at Feb expiration. In any case, I will provide a final summary when that happens.

Trade History:

22-Jan: SOLD -1 VERTICAL TLT 100 FEB 10 90/95 CALL @2.20, TLT MARK 92.19, TLT IMPL VOL 11.71%
27-Jan: SOLD -1 VERTICAL TLT 100 FEB 10 90/85 PUT @.50, TLT MARK 91.59, TLT IMPL VOL 11.97%
03-Feb: BOT +1 STRADDLE TLT 100 FEB 10 90 CALL/PUT @1.70, TLT MARK 90.37, TLT IMPL VOL 12.14%

TLT – Adjustment # 1 (Feb 10)

Sold 85/90 put spread @ 0.5 to collect some credit and net into an iron fly.

Earlier position: -1 90C/+ 95C
Adjustment: +1 85P/-90P
Net position: +1 85P/-90P/-1 90C/+95C

Net credit = $270 = Max reward
Max risk = $230 = Max risk

Trade History:

22-Jan: SOLD -1 VERTICAL TLT 100 FEB 10 90/95 CALL @2.20, TLT MARK 92.19, TLT IMPL VOL 11.71%
27-Jan: SOLD -1 VERTICAL TLT 100 FEB 10 90/85 PUT @.50, TLT MARK 91.59, TLT IMPL VOL 11.97%

TLT – Trade # 3 – Feb 10

As indicated via Twitter, I opened a new position for Feb 10 by selling one (-90c/+95c) call spread @ 2.2 credit.

Max risk = $280 (if TLT is above 95 at Feb expiration)
Max reward = $220 (if TLT is below 90 at Feb expiration)

I will attach risk graph if & when the net position becomes a bit more complex.

Trade History:

22-Jan: SOLD -1 VERTICAL TLT 100 FEB 10 90/95 CALL @2.20, TLT MARK 92.19, TLT IMPL VOL 11.71%

FAZ – Adjustment # 1 and Final Summary (Feb 10)

With FAZ shooting 9% higher today, I bought back the two 12/17 put spreads @ 0.55 debit and closed the position. This adjustment (indicated via Twitter earlier) resulted in $120 net profit.

Final Trade History:

19-Jan: SOLD -2 VERTICAL FAZ 100 FEB 10 17/12 PUT @1.15, FAZ MARK 16.88, FAZ IMPL VOL 60.26%
22-Jan: BOT +2 VERTICAL FAZ 100 FEB 10 17/12 PUT @.55, FAZ MARK 19.33, FAZ IMPL VOL 78.39%

Cheers Vik

FAZ – Trade # 2 – Feb 10

As indicated via Twitter, I opened a new position today on FAZ.

Sold two 17/12 put spreads @ 1.15 credit each.

Max reward = $230

Max risk = $770

I will post the risk graph later if/when the net position becomes more complex.

Trade History:

19-Jan: SOLD -2 VERTICAL FAZ 100 FEB 10 17/12 PUT @1.15, FAZ MARK 16.88, FAZ IMPL VOL 60.26%

Cheers Vik

RIMM – Adjustment # 1 (Feb 10)

With S&P 500 going towards another multi-month high (without RIMM’s participation in the rally), I got a bit skeptical about keeping a bullish position in RIMM. Due to this, I have hedged the deltas by selling two 65/70 call verticals (at 1.8 credit each) to net into an iron fly position.

Earlier position: +2 60p/-2 65p
Adjustment: -2 65c/+2 70c
Net position: +2 60p/-2 65p/-2 65c/+2 70c

Net credit = $660
Max risk = $340

The current risk graph is attached below.

Trade History:

15-Jan: SOLD -2 VERTICAL RIMM 100 FEB 10 65/60 PUT @1.50, RIMM MARK 66.22, RIMM IMPL VOL 38.69%
19-Jan: SOLD -2 VERTICAL RIMM 100 FEB 10 65/70 CALL @1.80, RIMM MARK 65.31, RIMM IMPL VOL 37.55%

Cheers Vik

RIMM – Trade # 1 – Feb 10

As tweeted during market hours on Friday, I opened a new position on RIMM for February 10.

Sold two put spreads (+2 60p/-2 65p) @ 1.5 credit each.

Max profit = $300

Max risk = $700

As these are simple short put spreads, I am not posting the risk graph at this stage. I will post it if/when I make any adjustments.

Trade History:

15-Jan: SOLD -2 VERTICAL RIMM 100 FEB 10 65/60 PUT @1.50, RIMM MARK 66.22, RIMM IMPL VOL 38.69%

Cheers  Vik

Monthly Summary (Jan 10)

Well, I wasn’t very active during January and I had just one position that was open for this blog. This single position on USO worked out reasonably well and early on, I was able to adjust it in a way that there was no upside risk. From that point, I just ended up holding my position as USO never looked down during the entire month.

Final Summary:

USO: Net profit = $106

Net profit for the month = $106

Using last month’s figure, the closing balance for January turns out to be $11,743. Since inception of this blog, this figure implies a return of 17.43% in 9 months which is reasonably good from my perspective. I have updated the “Monthly Summary” page with final numbers. Please note that this return does not include commission costs.

One last thing… This blog has been alive for 9 expiration months and I am hoping to continue posting here for another 3 months. After that, I am seriously considering taking up trading on a larger scale in my personal trading account so it is unlikely that I will have time to keep this blog active. I hope I am not disappointing anyone with this decision.

Cheers Vik