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.