D I S C L A I M E R
Investing involves risk that each investor must assess individually. We are not licensed under securities laws and do not provide investment advice. Please read the full legal notice and disclaimer.
Friday, September 14, 2007
Trade Log - Sept. 14 2007
We made two trades yesterday at near market open:
The first trade was in CTSH. CTSH is a stock we both have been watching for quite a while now. This is a strong company that has been beaten down with the recent market dip. Our feeling is that CTSH should increase in price over the long term.
The trade consists of us selling an October CTSH put option contract at an $80 strike and covering that position by buying a longer-term January CTSH put option at $75. We earned an up-front credit on this spread, and our earnings should increase with the price of the underlying as long as it remains below the short strike price plus the cost of the short option, which is about $90.
The second trade was in SPY. We like to trade SPY because it is very liquid, it behaves the way the market behaves as a whole, and it offers options at dollar increments, which is very convenient for us. In general we expect SPY to trend upward gradually, with occasional corrections. Our strategy is to leg into positions on both sides of SPY that allow us to earn premium each month while framing the underlying. I'll talk more about this in a different post.
The trade consists of us selling an October SPY call option contract at a $153 strike and covering it with by buying an October SPY call option contract at a $155 strike. We earned an up-front credit on this spread, and so long as SPY remains below $153 until October expiration we should do alright with this spread.
- BUY DIAGONAL CTSH JAN 08/OCT 07 75/80 PUT
- SELL VERTICAL SPY OCT 07 153/155 CALL
The first trade was in CTSH. CTSH is a stock we both have been watching for quite a while now. This is a strong company that has been beaten down with the recent market dip. Our feeling is that CTSH should increase in price over the long term.
The trade consists of us selling an October CTSH put option contract at an $80 strike and covering that position by buying a longer-term January CTSH put option at $75. We earned an up-front credit on this spread, and our earnings should increase with the price of the underlying as long as it remains below the short strike price plus the cost of the short option, which is about $90.
The second trade was in SPY. We like to trade SPY because it is very liquid, it behaves the way the market behaves as a whole, and it offers options at dollar increments, which is very convenient for us. In general we expect SPY to trend upward gradually, with occasional corrections. Our strategy is to leg into positions on both sides of SPY that allow us to earn premium each month while framing the underlying. I'll talk more about this in a different post.
The trade consists of us selling an October SPY call option contract at a $153 strike and covering it with by buying an October SPY call option contract at a $155 strike. We earned an up-front credit on this spread, and so long as SPY remains below $153 until October expiration we should do alright with this spread.
Wednesday, September 12, 2007
Legal Notices and Disclaimer
SR Investment Group LLC is a private investment firm structured to participate in many different types of investments. As a matter of practice SR Investment Group focuses primarily on investing in stocks, equity indices, and stock and equity options.
SR Investment Group invests only on behalf of the owners of the company, and does not accept customers nor does it make investments on behalf of any other person or group.
The owners of SR Investment Group are not licensed under securities laws to address any particular investment situation. No communication or publication by SR Investment Group should be considered personalized investment advice. The owners, publishers, and agents of SR Investment Group are not liable for any losses or profits, nor for any damages, monetary or otherwise, that may result from the application of information published by SR Investment Group.
There are inherent risks involved in the stock market and these risks should be considered prior to any decision. Individual traders must do their own due diligence in analyzing any investment opportunity to determine if it represents a suitable opportunity.
In particular, options involve significant risk and are not suitable for all investors. You can lose money trading stock and options. All investors who deal with options should read and understand the publication "Characteristics and Risks of Standardized Options." A copy of this publication can be obtained by clicking on this link.
SR Investment Group LLC does not promise, guarantee, or imply, verbally or in writing, that any application of any of our published information, whether in print or displayed on our website, will necessarily result in a profit. Past performance is not indicative of future results.
SR Investment Group LLC is the copyright owner of all text and graphics contained on this website. Copying, publishing or redistributing any material in any way without the written consent of SR Investment Group LLC is strictly prohibited.
SR Investment Group invests only on behalf of the owners of the company, and does not accept customers nor does it make investments on behalf of any other person or group.
The owners of SR Investment Group are not licensed under securities laws to address any particular investment situation. No communication or publication by SR Investment Group should be considered personalized investment advice. The owners, publishers, and agents of SR Investment Group are not liable for any losses or profits, nor for any damages, monetary or otherwise, that may result from the application of information published by SR Investment Group.
There are inherent risks involved in the stock market and these risks should be considered prior to any decision. Individual traders must do their own due diligence in analyzing any investment opportunity to determine if it represents a suitable opportunity.
In particular, options involve significant risk and are not suitable for all investors. You can lose money trading stock and options. All investors who deal with options should read and understand the publication "Characteristics and Risks of Standardized Options." A copy of this publication can be obtained by clicking on this link.
SR Investment Group LLC does not promise, guarantee, or imply, verbally or in writing, that any application of any of our published information, whether in print or displayed on our website, will necessarily result in a profit. Past performance is not indicative of future results.
SR Investment Group LLC is the copyright owner of all text and graphics contained on this website. Copying, publishing or redistributing any material in any way without the written consent of SR Investment Group LLC is strictly prohibited.
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