Matt's Trade Log - 9/18/08

Finally, a positive day. It wasn't much, but it was something.

• Buy 5 AAPL OCT08 155/160 vertical put spread
• Buy 2 UA APR09 25 call
• Sell 2 SPY OCT08 110/112 vertical put spread
• Sell 2 RIG OCT08 100/110 vertical put spread

I exited the AAPL trade today. AAPL is continuing to trend downward. My theory is, when the market tanks, the best companies get hit the hardest because those positions are the easiest for institutions to liquidate in order to hedge their other positions. Whether I'm right or not I don't know, but with AAPL down around 130 the odds of it coming up high enough to make that trade profitable were slim. I decided to exit that trade before I lost more money on it. I sold that spread for $1.45 originally and bought it back for $4.75. Ouch.

However, the rest seem like pretty decent trades. Of course, time will tell. The RIG 100/110 seems riskiest, but $92 is the 52-week low for RIG, and it was only below $100 almost a year ago for just a few weeks. 100 seems like a pretty strong support line, both from a technical analysis standpoint and an emotional standpoint.

With the VIX at over 37 today before settling down a bit, I simply couldn't help selling some SPY premium. It's hard to believe it, but I was actually able to sell this 110/112 spread for $.60 even being as far out of the money as it is - SPY closed at $121 today.

Lastly, UA seems to be on an upward trend, so I bought two $25 UA call contracts. UA's options were trading at below valuation and so buying options instead of selling premium seemed the smart thing to do on an upward trend like we had today.