Matt's Trade Log - 8/29/08

What a lousy week it's been. So much churn in the market has really taken a toll on my position that as of Wednesday looked like I would be posting a pretty solid gain for August. Instead, unless there is a massive rally on Tuesday, it looks like we'll be showing a net loss for August.

Today's trades:

• Sell 2 SPY OCT08 120/125 vertical put spread
• Sell 5 RIG OCT08 115/120 vertical put spread
• Sell 5 AAPL OCT08 155/160 vertical put spread

With the market continuing down it seemed a good time to leg in on the low side of some possible iron condor positions for October. There's simply too little time left in September options to make a reasonable return selling premium there anymore. Each of these trades was structured looking at charts and identifying apparent support points, and trying to sell the spreads at or outside the support points. Hopefully support will remain strong enough for these positions as we move toward October.

Matt's Trade Log - 8/28/08

Today's only trade: Sell 1 XLF SEP08 23 put.

I originally bought this put for $2.35 and sold it today for $2.19. I sold today because I got a sell signal on XLF.
I think the mistake I made here was accidentally buying the SEP08 put instead of one farther out. Even though XLF hasn't moved too much, the time decay of this option was so high this close to expiration that I lost $.16. If I was going to add the purchase of the put I should have purchased one with more time in the trade.

Oh well, live & learn. That's the cost of tuition in the investing world.

Matt's Trade Log - 8/26/08

Did just one trade today:

• Sell 3 SPY SEP08 123/124 vertical put spread

SPY is just kind of going horizontally now, so I added to this position. Time for selling September premium is getting pretty short though so it is doubtful I will do anymore with SPY in September. I'm at a point where I need to put a bit more of my money to work - I'm just a bit unsure as to where to put it currently.

Matt's Trade Log - 8/21/08

Today was a busy day, as it appeared to be a good day to enter some new positions. I did four trades:

• Buy 200 SLV
• Sell 2 GME SEP08 35/40 vertical put spread
• Sell 2 USO SEP08 91/93 vertical put spread
• Sell 1 GOOG SEP08 510/520 vertical call spread

Should have bought the SLV yesterday I think, but today's price in my opinion was still a good buy for the long term. I bought today at $13.66.

The trade for GME was an adjustment more than anything. GME fell for some reason on a strong earnings report today and fell to a support line of about $40. Selling the 35/40 adjusted a previous 40/45 put spread to be 35/45 with a breakeven near the apparent support. This spread was sold for $1.37.

I sold the USO spread based on the turn of the price of oil. All of my other oil-related stocks are also going up, but USO appeared to have the most room to run and hence the most safety in the trade. The USO spread was sold for $.65.

GOOG appears to have taken a turn at a downward-sloping resistance line. I sold the call spread at $2.35 to hopefully profit from the downturn.

Matt's Trade Log - 8/20/08

One trade today: Sell 5 SPY SEP08 123/124 vertical put spread. SPY seems to have found some support at around $127. The longer-term support line looks to be at around the 123-124 range. Selling the 123/124 vertical put spread for $.30 gives us a probably of 70% on the trade and puts us in a reasonable position compared to the longer-term support line.

I thought about buying more SLV today but decided to wait. $13 seems awfully low given the low supply of silver available and the high demand for silver. Maybe tomorrow.

Matt's Trade Log - 8/19/08

Four trades today:

• Buy 50 SLV
• Buy 2 RIMM OCT08 125/130 strangle
• Sell 2 UA SEP08 30/40 vertical call spread
• Sell 3 AAPL SEP08 185/190 vertical call spread

SLV finally appeared to have bounced off of a resistance line at about $12-$13. I picked up 50 new shares of SLV at $13, giving me a total of 200 shares.

The RIMM trade was in anticipation of increasing volatility as RIMM's earnings approach in late September. Given the historical performance of RIMM compared to recent performance, their history of strong earnings, a new threat from AAPL and the iPhone 3G, and uncertainty surrounding their general viability as well as the Blackberry Bold, it seems likely that volatility will increase in this position as earnings nears. The plan is to try to sell this strangle back with just a few days before earnings and try to reap a profit from the increased volatility. This trade cost $19.93.
One potential problem with this RIMM strategy, I just realized, is that the options are near-term enough that time decay may eat into the increase in volatility considerably. The next time I try this strategy, I should buy options that are much further out, so time decay doesn't erode so much of the gain I might get from increased volatility.

With UA, I saw a downturn signal that would have been cause to sell if I was long UA. I sold this vertical call spread to try to profit from the downturn. I wanted a breakeven of at least 35, but the 35/40 call spread was too inexpensive to be worthwhile, and the 30/35 too risky. The 30/40 seemed to give a good balance between risk and reward for me. I sold it for $3, which essentially amounts to a 70% probability of success.
One risk here is that $32 was in fact the new support for UA. If so, it is just pulling back a bit before a big run-up. I'll need to watch it to see if it gathers steam and heads upward from $32. If not, we're likely to see it fall back down to $25 again, at which point it would probably be time to buy in again.

AAPL seemed to have hit a resistance line at about $180 for the past several days, so I took the opportunity to sell another call spread at that level, basically doubling down a position I took some time ago. I sold this spread for $1.40, which is a little low for a 5-wide spread, but not too bad.

Matt's Trade Log - 8/18/08

Three trades today:

• Sell 1 RIG SEP08/JAN10 145 calendar call spread
  
• Buy 1 XLF SEP08 23 put
• Sell 2 XLF SEP08 22/24 vertical call spread

The RIG trade was to exit a bad position. 145 had been a previous support line, but recent activity has me wondering whether RIG will be coming back up any time soon. Where support is for RIG at this point is anyone's guess. These calls were really hurting my overall theta. I wouldn't enter into these trades today, so I figured it was time to exit these positions and wait for RIG to turn. That calendar was originally purchased for a total of $46.26, and sold today for $17.35. Ouch.
I entered two bearish positions on XLF, a financial ETF, which essentially means I'm shorting the financial sector. However, buying the SEP08 put was a mistake, I can see that already. I should have bought a put with more time in it. For now I'll hold on and see if it can work itself out OK over the next few days.

Hopefully, what I learned from RIG is that I was too much in love with that stock for my own good. I kept thinking that it couldn't go down, while it continued downward farther and farther. I should have cut my losses around the first part of July, when I initially received a sell signal, at about $150 mark, instead of today at $125.

Matt's Trade Log - 8/13/08

Entered into two positions for RIG today:

• Buy 2 NOV08 120 call
• Sell 1 SEP08 120/125 vertical put spread

Got a buy signal for RIG today so I went in. Today was a good day for RIG. The plan is to hold the put spread for about a month. For the calls, I plan to keep them until I get a sell signal, although I might keep one to sell diagonals against for a couple of months.

Matt's Trade Log - 8/12/08

Three trades today:

• Sell 4 AOB JAN10 5 call
• Buy 1 ISRG AUG08 260/270 vertical put spread
• Buy 1 FSLR AUG08 280/290 vertical call spread

AOB ended up a loser this time. I bought when I got a buy signal and sold at the sell signal, but ended up buying the call at $5.60 and selling for $4.40. This is a good argument to sell premium instead of buying (or at least to do it in addition to buying), but selling premium on AOB is hard because the price is so low. AOB might be good to stay out of for now, or maybe a different strategy is required.

The trades for ISRG and FSLR were to exit positions. It seemed wise to secure gains in both in case of the possible, however unlikely, wild move in either before expiration. The ISRG spread was initially sold for $3.50 and bought back for $.09 securing a profit of $3.41. The FSLR spread was initially sold for $3.15 and bought back for $.30 securing a profit of $2.85. Not bad for either.

Matt's Trade Log - 8/11/08

Three trades today:

• Sell 1 GOOG SEP08 460/480 vertical put spread
• Buy 1 BIDU AUG08 300/310 vertical put spread
• Buy 1 FSLR AUG08 240/250 vertical put spread

I'm entering a position on GOOG as they seemed to be turning today. Resistance for GOOG appears to be fairly strong at about 470.

I exited positions on BIDU and FSLR as we are nearing expiration. My rules tell me that I should have exited those positions last week, as they were still out of the money last week and we were within ten days of expiration. In hindsight I should have done this, as I ended up not doing too well on each. In the case of BIDU, I sold the spread initially for $2.95 and bought it back today for $4.19, taking a $1.24 loss. In the case of FSLR, I sold the spread initially for $3.25 and bought it back today for $3.20 for a slight $.05 gain, which was surely wiped out by commissions. Of course, in both cases I also have vertical call spreads on the high side which may make each position an overall winner.


Good advice I read today, from Red Option - I generally shouldn't be staying in a position that I wouldn't buy into today. I don't intend to take that advice wholesale, but it is a good thing to think about. I may reevaluate some of my positions and adjust soon.

Matt's Trade Log - 8/8/08

Two trades today:

• Buy 2 UA AUG08 22.5/25 put spread
• Sell 2 GME SEP08 40/45 put spread

The first trade was to exit my final UA position as UA continues its upward trend. These options are expiring next week and were nearly worthless so there was no point in holding on for a tiny amount of additional premium, especially when thinkorswim doesn't charge commissions for five-cent trades. The UA trade was initially sold for $.55 and bought back for $.05 making a nice $.50 profit.

The second trade is to enter a new position for GME. GME seems to be bouncing off of a pretty firm resistance line at about $40. I sold this spread for $2.25. We'll watch how it does and see if we're right about the resistance line.

Matt's Trade Log - 8/7/08

Two trades today:

• Buy 1 RIG AUG08 155 CALL
• Sell 5 SPY SEP08 131/132 vertical call spread

The first trade was exiting a position - buying back a call that I sold covered by a RIG LEAP. That call was sold a couple of weeks ago for $2.65, and bought back today for $.05.

The second trade was entering a new position - selling a vertical call spread on SPY. SPY looked this morning to be trading near resistance that has been pretty solid for some time. The only concern is that trading also seems to be consolidating near resistance which could be a precursor to a push through the resistance line. We'll have to watch and see.

Matt's Trade Log - 8/6/08

Bought back 2 AAPL AUG08 155/160 vertical put spread. This spread was sold for $2 and bought back today for $1.37, nice. AAPL ended up going a bit higher later in the day and I could probably have bought it back for less, but with just over a week until expiration, and where yesterday AAPL was just below $160, it seemed a good idea to close this out for a profit today with the AAPL mark at around $163-$164.

Matt's Trade Log - 8/5/08

Sold 3 JAN09 UA 20 calls with UA at about 34. 34 appears to be a resistance line (previous support) and from that point the stock trended downward somewhat. The calls were purchased on 7/18 at 10.50 and sold today at 14 for a nice profit.

Matt's Trade Log - 8/4/08

Two small trades today so far:

FSLR - Short 2 SEP 250/260 vertical put spread
RIG - Short 3 SEP 125/130 vertical put spread

Both stocks appear to be trading at or near support lines. The RIG trade entails a lot of risk at this time because earnings are coming up on Wednesday. RIG earnings tend to do well so maybe the trade will play out alright. In either case, selling premium today allows us to take advantage of high volatility in RIG due to the upcoming earnings.

Matt's Positions as of August 1

Disclaimer

Without disclosing amounts I'm going to list positions I'm in as of the start of each month. At least I'm going to try. Then I'll see how that plays out in terms of a return on a per-month basis.

AAPL:
Short 2 AUG 155/160 vertical put spread
Short 3 SEP 145/150 vertical put spread
Long 2 JAN10 150 LEAP
I'm generally bullish on AAPL, although I need to do a better job of trading the near-term fluctuations.

AEMD:
Long 5000 shares
AEMD is my swing-for-the-fences play.

AOB:
Long 4 JAN10 5 LEAP
Got a buy indicator on AOB. Plan is to start selling spreads on the fluctuations.

BIDU:
Short 1 AUG 300/310 vertical put spread
Short 1 SEP 380/390 vertical call spread

FSLR:
Long 1 AUG 240/250/280/290 iron condor

ISRG:
Short 1 AUG 260/270 vertical put spread
Long 1 JAN09 250 LEAP

RIG:
Short 1 AUG 155 call
Short 2 SEP 125/130 vertical put spread
Long 1 SEP 145 call
Long 1 JAN10 145 LEAP
The long SEP 145 call is the remainder of a straddle I did at 145. RIG then moved down significantly, and I sold the 145 put for nearly the whole sum of the cost of the straddle. I'm planning to hold the 145 call through earnings. RIG tends to kill on earnings.

SLV:
Long 150 shares

UA:
Short 2 AUG 22.5/25 vertical put spread
Long JAN09 20 LEAP

I'm also in iron condors in DIA and SPY that are autotraded by Red Option. Out of respect to Red Option I won't disclose those positions.